Apple to Release Earnings... What do I expect?

What do expect when Apple reports today? I do believe their stock will go down either way.

Piper Jaffray analyst Gene Munster has made an interesting observation related to Apple's past outlooks. In the last eight quarters, Munster says Apple has guided its earnings per share or EPS 9% below the consensus estimate and sales 4% below, on average. Apple then tops the original EPS estimates by 27% and sales estimates by 4%.

So, analysts have a different ballpark. The consensus earnings estimate for the fourth quarter is $1.11/per share, on $8.05 billion in revenues. In the year-ago period, Apple reported EPS of $1.01, on revenues of $6.22 billion.

Analysts are also expecting Apple to say it sold 2.7 million Macs, 10.5 million iPods and about 4 million iPhones during the fourth quarter. In the third quarter, the company sold 717,000 iPhones, 2.5 million Macs and 11.01 million iPods.

The gross margins will be an important point of investor focus. In July, Apple rattled investors by guiding its fourth-quarter gross margin down 330 basis points sequentially to 31.5% from 34.8%, citing new low-margin products. During the quarter, Apple revamped its iPod line of portable media players and launched the iPod touch, a lighter and lower-priced version.

Apple's Q1 guidance will also be on the radar. Some analysts believe that Apple should stop issuing ultra conservative guidance that does not truly reflect the company's potential performance. Street expects the company to report $1.65 in EPS on $10.57 billion in revenue for the first quarter.

Wow on the Dow...

Up 932 pts on Monday. Down 733 today. Wow, talk about a roller coaster!

This is very interesting. These days are getting crazy.

So what do I expect for tomorrow? I'm not entirely sure, but I do believe we'll have at least a slight rally. Why? Well today was a bad day on The Street because of worries of a "prolonged recession." While this may be possible to be happen, this news came in and we didn't break through Friday's lows. Today the QQQQ's closed bottomed and closed at around 30. Friday's low was 29.38, though the final close was 30.58. On the Dow the close was higher than the Friday close which was 82. Today's Dow close 84 vs 82 on Friday.

CIT

Check this stock out, it could be getting ready to go through the roof.

Intel Jumps

Intel's profit has jumped. Is this a selling opportunity? Watch this stock.

Predictions for Tomorrow, Wednesday Oct 15

Tomorrow is the 15th of October. The week so far has seen incredible moves. The Dow is hovering just above 9000. This week so far we're up quite a bit from where we started with a jump start of 932 pts on Monday. Today we saw another jump which ended up settling down. Current R is at around 9700. My expectation for today was that it would hit 10,000 which did not happen. I felt that we were just down too far and that a pull back would be delayed. However, there was a pull-back.

Tomorrow I expect to see a slight rise around 200 pts and then a fall and then a rise again in the afternoon.

Market Insight

Some more market insights from Investors Business Daily.

In a bull market, "Railroad Equipment, machinery, and other capital goods industruies are late movers in a business or stock market cycle.

Another bit of insight:

In bear markets, stocks usually open strong and close weak. In bull markets, they tend to open weak and close strong. The general market averages need to be studied closely every day since reverses in trends can begin on any given day.

Based on this information, the market that we're currently in is undecided in weather it's a bull market or a bear market since stocks alternate quite a bit. Some days they will open strong (i.e. Friday, Oct. 3rd) but closed very weak (bearish), but on Wednesday it opend weak and closed strong. Given these factors, it's difficult to predict the direction that the market will move next, but I would say that we're probably getting very close to the bottom of the current bearish market. However, I wouldn't say we're there exactly yet, just that the indicators seem to be saying that we're very close to it.