Breakfast Blog

Good Morning Traders,
                                     The huge Story from Yesterday has to be the rotten Apple saga. A slight miss in earnings caused an after market sell off of over $50 billion. Before the earnings were delivered last night the stock popped to $527 before selling off to $457. This was an incredible move for such a small miss. Investors are panicking for a number of reasons including competitors, new products and Apple's increasing stockpile of cash which is around the $130 billion mark. We have found some interesting facts about Apple from Zerohedge:
The equivalent of the population of Spain bought Iphone's last quarter.
The after hours sell off in Apple was the equivalent to the Market Capitalisation of Morgan Stanley, which is one of the biggest Banks in the world, or the equivalent of Starbucks and Nike put together!
Apple also have enough cash in surplus to buy anyone of the 4 next biggest companies in the world!

These results may cause a risk-of sentiment when the U.S. opens today, with all eyes on Apple's share price movement. S&P 500 and Nasdaq will likely be weighed down by Apple if its Share price starts selling off. If looking for a long position we would advise entering a Dow Jones 30 position. Nasdaq is not in the DJ's index and this is index has been outperforming from positive earnings of its consumer stock make up.
Level's to look out for on the S&P 500, 1490 Downside then 1482 should hold, whilst 1500 topside may hold until we get another catalyst. Its still a buy the dips trade even though the Overbought RSI and Stochastics point to a correction.

Now to currencies, The FX market has started 2013 with great volatility, which is enabling FX traders to make great gains from the swings in price action. This was the case yesterday and today again. Yesterday we saw a 90 pip sell off in EUR/USD based on dollar strength and a few unfounded rumours. The EURO slipped from 1.335 to 1.3265. This gave any Euro bulls a great chance to go long and it quickly retraced most of its losses to close above the 1.33 handle. We entered a long position at this 1.3265 retracement and will be looking at a test of 1.3490 in the coming days or weeks. Until 1.325-65 is broken the EUR/USD is very bullish so go with the trend and buy dips.
Levels to watch out for our 1.328-9, a lot of bids will be here and topside of 1.337 through to 1.3405 will be scattered with offers.  Sovereign names have been reported on the right hand side of the order book in the EUR/JPY cross and this should help the EUR/USD pair aswell.
Trade well! Lowkey