The Insider Report

The proprietary signals I had coded are firing off a buy signal on Apple.  Note the bullish divergence paint signal on the Tradestation chart.  The last time this happened was on 8-27-10 and Apple went on a unparalled tear upwards of 80 points.  There are a lot of fundamental reasons to buy Apple.

1.It’s cheap versus the market or any other benchmarks.

2.The product cycle is explosive.  No Company in the history of technology is at a sweeter point than Apple is now.

3.Earnings are on the 20th.  They will be blowout.

Negatives are well-known.  Steve Jobs may not be coming back and is irreplaceable.  Parts shortage from Japan  overblown.  Apple couldn’t fill the orders for the Ipad before the earthquake.

Recent reports on lacklustre growth in the P.C. notebook are directly attributable to the Ipad.  The netbooks are counted in these notebook totals.   Even though the Ipad is worthless as a business tool, it is emasculating the netbook market.

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Based on data from Investors Intelligence (II), newsletter writers who are bearish on the US equity market have fallen to 15.7%, the lowest since December 2009 (15.6%) and below the level seen at the April 2010 highs (17.4%). II % Bears below 20% suggest that there are too few bears among advisory newsletter writers. As a measure of market sentiment, this has the potential to be contrarian bearish for the US equity market. Sentiment is not the best timing indicator, but after the sub-20% readings for II % Bears in December 2009 and April 2010, the S&P 500 pulled back from late January into early February 2010 (down 9%) and from late April into early July 2010 (down 17%). In addition, II % Bulls vs. II % Bears (see side bar) reached the highest level since June 2003, which preceded a sideways market going into September 2003.

Investors Intelligence % Bearish Advisors – weekly chart

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BlackRock, Inc. (BLK) yesterday (3/31/11) announced the listing of the iShares MSCI China Index Fund (MCHI).  The press release claims it is the first ETF to be benchmarked to the large cap and mid cap MSCI universe, providing exposure to the top 85% of Chinese equities by market cap.  However, MCHI becomes the twenty-third China ETF, and some of the existing ones provide similar or even broader coverage of the country.

The overview page does not currently contain any information, but according to the month old fact sheet (pdf), the fund is slated to have 141 holdings and an expense ratio of 0.61%.  The largest positions are China Mobile Ltd 8.6%, Industrial and Commercial Bank of China –H 7.1%, China Construction Bank –H 6.4%, CNOOC Ltd 6.1%, and Bank of China Ltd –H 5.0%.

Sector breakdown has Financials at 37.0%, Energy 18.4%, Telecom 11.4%, Industrials 8.0%, Technology 6.4%, Materials 6.1%, Consumer Discretionary 5.4%, Consumer Staples 4.7%, Utilities 1.8%, and Health Care 0.8%.

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