Recap 10-9-12

~ globalmacrotrading

Commentary:

The Apple-driven sell off in the Tech sector appears to be nearing capitulation levels. Chart below is of XLK / SPX. The sharp drop appears consistent with historical episodes of capitulation, and is now not far from long term support. Technical oscillators also reflect that the ratio is at the most oversold levels since March 2011.

There has been a lot of chatter from technical analysis types who are saying that Apple’s chart looks like a blowoff top. (Apple is 20% of the Tech index) However, on a fundamental basis, this view is unlikely. Apple continues to have a very large moat around its business, and is trading at just 12x trailing PE – less than the market multiple – after adjusting for its cash hoard.

Notable:

  • Saudi Arabia said prices are now down to adequate levels and called the current price suitable for global eco growth
  • Post debate, online market implied odds of an Obama win declines from 4:1 to 2:1
  • Interesting Pimco article on the relationship between yields and elderly employment

Upcoming Data:

  • Wed: US Mortgage applications, Australia Employment, China Money Supply
  • Thu: US Jobless Claims
  • Fri: US PPI, U Michigan Confidence

Published by globalmacrotrading

I am a G20 Global Macro Portfolio Manager in NYC. My background includes stints at a major investment bank, a commodities market maker, and one of the world's largest global macro hedge funds.

2 thoughts on “Recap 10-9-12”

  1. Hello,
    Still a big fan of your short, and accurate comments, keep it up !
    A quick question here, where does the 63 days number in the moing average come from ? Is that your estimation of the 3-month business days number ?
    Best,
    Phil

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