Ohhhh Apple

There's this pervasive sentiment in the investing public about how foolish Apple management is.  It's really been fueled by two themes: do something for shareholders with your cash and innovate, dammit!

And of course Carl Icahn has been out there trying to ruffle all the feathers he can to get them to use cash to shareholders' benefit.  I give Icahn props, because his ploy is a hell of an interesting experiment in social finance; using multiple media platforms to rile up shareholders.

Looking at it objectively, if there is no innovation coming soon and the legacy businesses are maturing, why the hell wouldn't you wait to buy it back cheaper? 

Nowadays since Apple hasn't come out with a revolutionary new product in five years, we're hearing all about how they lack innovation.  At the same time, few people seem to care that nobody else is coming out with blockbuster innovations in the space.  

We all know Google has Glass coming out,  but really, when will it launch?  It's not a matter of innovation, but it's a matter of powering these devices. So just because Apple isn't telling the whole world about a grand new product (why would they give competitors time to copy?), doesn't mean they don't have something incredible lined up.  

Let's give these guys some credit where it's due.  A Tim Cook led Apple has done a great job maintaining and building out their positions within the content ecosystem and operating systems.  Given the size of the customer base, they've done a nice job keeping them happy.

Now let's take a look at the long term technicals.  There are two buy-able patterns here.  One on huge strength, the other on huge weakness.

It's only been able to retrace 60% of the drop from 700 to 400.  There is a possible head and shoulders bottom pattern forming here that breaks over 580, but at this point, it's a leap of faith.

There's also a bullish harmonic pattern set up in Apple that suggests we buy it.....in the mid 100's!  This pattern will only be really useful if the stock moves below 350 with ease.

All in all the investing public has a messed up thought process on Apple shares and that will continue to play itself out until it doesn't, and the stock is either trading at 200 or 800.  Good luck figuring that one out!