A Strangely Muted Response to Apple

 | Jan 26, 2012 | 6:54 AM EST
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I am not quite sure if the back-to-back combination of Apple (AAPL) and the Fed got 'em giddy enough. I'll go with this: We're closer than we were a few days ago. Let's call it 75% or 80%.

Given the out-of-this-world earnings by a company whose cash hoard could single handedly cover Greece's debts, I was shocked at the less-than-enthusiastic response. There was excitement but, as we all know, we've seen earnings get market commentators effusive before, and they did not sound effusive to me.

Still, I would note that, when we start hearing comparisons such as these, it reminds me of those Internet bubble days, when we kept hearing that Yahoo's (YHOO) market capitalization was equal to the gross domestic product of Finland. It also brings to mind the late 1980s, when we'd hear how the land under the Imperial Palace in Tokyo was worth more than all of Los Angeles, or some such nonsense.

In any case, while folks happily bought stocks after the Fed announcement, there seemed to be more griping over Ben Bernanke's plan to keep rates low till 2014 than there was back-slapping. I heard a great deal of folks question his motives. In fact, one ask whether he had political motives! The one question I would have liked to hear someone ask was, "Why 2014?" Is it because your term as Fed President ends in January 2014 and you have stated you will not seek another appointment? Was the date pulled out of thin air, or was it coincidence?

In the meantime, the higher highs continue in the Nasdaq high-low indicator, as do the higher highs in the McClellan Summation Index. Breadth continues to make higher highs, as well. The Dow Jones Utility Index, meanwhile, bounced right off that uptrend line. The Dow Jones Transportation index has continued riding its uptrend line, as well (having bounced right off 5200 two days ago), as has the Dow.

Yet here we are, one month into this rally, and the number of stocks making new highs on the NYSE is at 143. Heck, a week ago we saw 179, not to mention more than 200 in the final days of December. We seem to get group rotation with no follow-through -- notice the KBW Bank Index still has yet to make a higher high since JPMorgan Chase (JPM) reported earnings nearly two weeks ago.

In the past several weeks I have noted two different charts with channels. The first was that of the euro, which ended up never coming down to tag the lower channel line before it launched itself up through the upper channel. (Remember, it was a chart in a downtrend, so it was a downward-trending channel.) Then we looked at a similar channel in natural gas. In that case, there was a quick drop from the channel, followed by a recapture and a zoom upward.

Now we find an uptrending channel in the Financial Select Sector SPDR (XLF). Failure to tag the top of the channel at $14.50, and a break of $14 on the downside, would simply be the inverse of what we saw when the euro and nat gas broke upward from their respective channels. These narrow channel lines have really been in force lately.

XLF -- Daily

I have not discussed gold in quite some time -- and, since it crossed over its downtrend line, I was asked to review it. I can measure a short-term target near $1,750 per ounce, and we can see there is resistance all the way up to $1,800. It is difficult for me to get excited over gold after a $50 move in one day, but I wouldn't be bearish on it, either. I figure it will work its way higher over time toward that measured target .

Gold -- Daily


Overbought/Oversold Oscillator -- NYSE

Overbought/Oversold Oscillator -- Nasdaq

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