{"id":12959,"date":"2012-07-24T01:13:08","date_gmt":"2012-07-24T05:13:08","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=12959"},"modified":"2012-07-24T01:13:08","modified_gmt":"2012-07-24T05:13:08","slug":"apple-earnings-play-hinges-on-final-days","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2012\/07\/24\/apple-earnings-play-hinges-on-final-days\/","title":{"rendered":"Apple July Earnings Play Hinges On The Final Days"},"content":{"rendered":"

(This is an excerpt from an article I originally published on Seeking Alpha on July 22, 2012. Click here to read the entire piece<\/a>.)<\/strong><\/p>\n

With an increasingly dour macro-economic backdrop, one might expect a very large response to Apple’s July earnings report {snip}… However, the trading action going into Tuesday evening’s earnings report was very lukewarm until today (Monday, July 23). Unlike the April earnings where the data gave me extreme confidence in a large upside response<\/a>, the trading going into July earnings is not yet producing clarity. Indeed, this time around, I will likely need to wait until the hours or minutes before the close preceding earnings to make a final decision. {snip}<\/p>\n

In the rest of this piece, I describe the factors I am considering. Please reference the previous Apple earnings play analysis, “Odds Favor A Big One-Day Upside After Apple Posts Earnings<\/a>“, for more background and related charts.<\/p>\n

{snip}<\/p>\n


\n
\"Apple<\/a>
Apple mainly trades in a tight range going into July earnings<\/figcaption><\/figure>
\nSource: FreeStockCharts.com<\/a><\/strong>
\n<\/center><\/p>\n

{snip}<\/p>\n

Recall that the two overall lessons from the analysis of the Apple earnings play<\/a> are that 1) AAPL produces distinct patterns based on the quarter of the earnings report, and 2) the overall correlations have changed since 2010. {snip}<\/p>\n


\n
\"Correlation<\/a>
Correlation of Apple's 1-Week Average Daily Pre-Earnings Price Change to the One-Day Post-Earnings Price Change Sorted By the Month of Earnings<\/figcaption><\/figure>
\n<\/center><\/p>\n

So, it seems the Apple earnings play essentially hinges on the final two days before the report. Here are the scenarios that will define my decision:<\/p>\n