Earnings

by Larry Levin

Although there was another rally on Fraud Street Friday, it was yet again on ridiculously low volume.  Because of the low volume and no volatility whatsoever, the rally was quite slow. There were several periods of the day that lasted one to two hours when the range was only 5 or 6 ticks wide.
 To say that today’s trade was slow is an understatement of massive proportions. It was so slow; it is hard to imagine how it could get any worse. People have a natural tendency to wonder why this happens and the only reason for today must have been the impending AAPL and IBM earning announcements. Both were very good.

AAPL earnings were better than expected. Can it already be priced in or is it going to $400/share?

Q1 revenue USD 26.74bln vs. Exp. USD 24.42bln
Q1 Macs sold 4.13mln, up 23%
Q1 iPhone sold 16.24mln, up 86%
Q1 gross margin 38.5% vs. Exp. 37.3%
Q1 iPods sold 19.45mln, down 7%
Q1 iPads sold 7.33mln
Sees Q1 revenue about USD 22bln vs. Exp. 20.87bln, sees Earnings at $4.90 on expectations of $4.47

IBM…

Q4 revenue USD 29.02bln vs. Exp. USD 28.28bln
Q4 gross profit USD 14.2bln
Q4 net USD 5.26bln vs. Exp. USD 5.14bln
Q4 software revenue USD 7.04bln
Q4 global technology services revenue USD 10.2bln
Q4 systems and technology revenue USD 6.28bln
Q4 gross margin 49.0% vs. Exp. 48.8%
Q4 global business services revenue USD 4.76bln
Q4 signed services USD 22.1bln, up 18% 

The ES is almost at my target “level” of 1,300.00 to 1313.75.  One wonders if Globex traders will take the baton and run with it into that range.  If so, what’s next?  Oh, never mind.  There are POMO operations every day but 2 this month so it’s up, up & away!

Trade Date: 1/18/11 E-Mini S&P Trades* (before fees and commissions): No “Secrets” trades filled Tuesday.  Algorithm positions (4)  “Reading the Tape” positions (0) …combined Secret’s, Algo, & “Reading the Tape” total… -2.25

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