IBM & Google Propel Apple's All-Time Highs Before Earnings (IBM, GOOG, AAPL)

Apple Inc. (NASDAQ: AAPL) is set to report earnings on Tuesday after the close.  What is interesting is that Google Inc. (NASDAQ: GOOG) helped to allow a big boost to earnings expectations last week and now International Business Machines Corporation (NYSE: IBM) has helped on Monday.  Oddly enough, neither company is the true tell-all for previewing Apple’s earnings.

In case you haven’t been watching anything but Apple Inc. (NASDAQ: AAPL), the rest of the market is feeling heat as our politicians are about to gamble the U.S.’s Triple-A debt rating to the trash heap and as Europe heads south.  Summer is often not the greatest time for technology, but Apple hit a new all-time high today and its 52-week range is $199.25 to $374.65.  The close was up 2.4% at $373.80 and the after-hours session has it up another 0.3% at $375.10.

So, here is what to expect for Apple: $5.80 EPS on $24.92 billion in sales; next quarter estimates are $6.42 EPS and $27.7 billion in revenues.

One issue to consider is that this coming quarter (which we are currently in) is the fiscal year-end and estimates are $24.97 EPS and $103.83 billion in revenues.  In short, Apple trades at only 15-times expected earnings for the current year.

Investors are awaiting news on the new iPhone9 (just joking, on the number at least) as well as considering new data on the iPad3 or whatever will be the updated features even if the model is not changed entirely.

Apple’s chart has been screaming.  The 50-day moving average is all the way down at $339.88 and the 200-day moving average is ever further down at $332.81.

We only have two issues to throw out, with the caveat that saying anything cautious is probably just foolish tape-fighting in technical terms.  Apple has suddenly found itself very overbought near-term and estimates have been cut by one of Apple’s bullish analysts at the end of last week.  That analyst maintained a price target of $535.00 for the stock, so maybe things are not so dire per the shipment cuts.

OK, so despite a market sell-off and despite ongoing woes Apple has risen and taken out new all-time highs the day before earnings.  Either something big is going to be announced, or investors may sell the news.

Again, it is easy to just sit back and say cautious things.  Admitting that it is fighting the tape and would have been disastrous to remain negative is crucial.  Call options have been very active and the August $400 CALLS traded more contracts than their entire open interest today.  Expect options trading to be elevated on Tuesday as well. As of Monday’s close, the August expiration date (rather than weekly options) was indicating close to $16.00 as an expected move in either direction.

JON C. OGG