I'll be the first to say it today: Anyone who claims to have extra insight on Apple (AAPL) is playing you.
Every firm on and off Wall Street has an analyst dedicated to Apple. They are poring through Thursday's earnings report twice over. I think they need to find the good in the report and push it down investors' throats because Apple is one of the few pieces of the market foundation that's offering hope.
Headlines likely will focus on a net income beat, or earnings-per-share beat. Some may want to talk about record iPhone sales, which, admittedly, is impressive, especially after the recent Qualcomm (QCOM) report.
I'm struggling with the fact that quarterly revenue was down 3% year over year and EPS would have been down as well had it not been for the insane amount of stock repurchased over the past year. Apple bought back $90 billion of its stock last quarter alone. Management did set revenue expectations for the current quarter well above current market estimates, so that should be seen as a positive.
Did Apple do enough to save the market? I don't think so, but it looks like it did enough to save itself
Apple likely will be our guide. If the stock goes green to red, using last night's after-hours action as the green, then the only position I'd consider into the afternoon or even over the weekend is some limited short exposure or put action on pretty much the index of your choice.
I likely would look at a mix of the SPDR S&P 500 ETF (SPY) and the iShares Russell 2000 ETF (IWM) or possibly use the Invesco QQQ Trust (QQQ) rather than the SPY.
My inkling would be to use the SPY if it is under the 50-day exponential moving average (EMA). It closed right on the 50-day EMA yesterday. A break could send us down to the 200-day EMA, currently around $399, before we find any stability.
Any close under the 200-day EMA for the SPY could get ugly. Bad things happen under the 200-day moving average. I'm not calling for a crash, but it's fair to say crashes don't happen from a position of strength; they occur in weakness. Trading below the 50-day and 200-day EMA is a position of weakness.
If Apple can close the week strong, it should carry the QQQ back above short-term EMAs. While I'm not looking long for a quick flip, if I move in that direction, my eyes will be focused on QQQ or AAPL itself. The relatively strong price action is too important to ignore. This still isn't a market to buy weakness or call bottoms, so if you want to be long, keep a focus on these or stocks reacting well to their own earnings report.
