Is it be careful what you wish for, or is it immunization or is it knowledge some have that others don't?
I am talking about how to approach stocks during the biggest week of earnings where almost a third of the S&P 500 reports.
Specifically, if a stock runs is that good or bad and what's the value of a selloff ahead of earnings?
I have always been of the opinion that I don't want a stock to run ahead of earnings, or ahead of any big event no matter what.
Apple's (AAPL) stock has run into earnings and there could not be a worse setup given that there are so many Apple bulls and therefore there's no one to convert.
Sure, it was an easier call, 50, 40 or even 30 points ago where there were plenty of bears to be turned into bulls. But now I just see a lot of camp followers who can use this quarter to downgrade, flee, do whatever they want, based on the fact that there's plenty of time before there is a phone iteration that is worth getting in front of. These are people who regard the service revenue stream as a nuisance to forecast at best, a distraction at worst, because their models dictate their thinking that models are not going to be changed by service revenue or revenue from AirPods or Watches either.
So, if Apple isn't up a lot that gives some room for upgrades and price target bumps. Sure, it did trade to $233 but that was before the China disappointment and while we hear that China is better, it is a stock of fear for the moment.
Consider it a little like the stock of Disney (DIS) . We all pretty much presumed that Avengers: Endgame would break records, so when it breaks records, it is reasonable that the stock goes up, unless it is already up. That's precisely what happened here and the stock should have opened down and stayed down instead of that rookie run.
I will have more on this topic later today.