ManyPeaks.com

One can never be sure, but the pin action in the equity marketplace is simply not healthy. We shorted a bunch of the Russell 2000 index (IWM) today.. about 25% of client portfolios. We also hold 10% of assets in the MZZ, a levered exchange traded fund that performs at 2x the inverse of the S&P MidCap 400 Index. Being long that security is actually being short the market. There are similar ETF’s for the Nasdaq 100, S&P, & DJIA — presumably created so that IRA’s and other retirement plan vehicles can take short positions (non-margin acccounts cannot short stocks outright).

Apple reported earnings after the bell. Results were solid, as the iPod sold like gangbusters and their recent, pervasive media campaign for their computers helped produce a nearly 30% year-over-year increase in Mac computer sales.

But about 4:30ish — during the conference I assume — AAPL tanked.. likely as guidance for next quarter’s numbers was discussed. The Street was looking for $300 million higher revenues than Apple projected. That was pooh-poohed as lowballing estimates by several analysts in the story, but I’m not as certain.

Following the hoopla around their iPhone announcement, Apple had run up huge into this event. Both they and Intel have now sold off hard on “better than expected” numbers. I’m not the only one thinking this market has some work to do on the downside, but for the “no news will be good enough” rationale, I like the downside odds now more than at any time in the past 2 months.

Be back tomorrow with thoughts on Apple’s fundamentals. I’m no expert in the field, but do find their iPod-led resurgence quite interesting. And my bearish bent doesn’t pertain to AAPL stock per se.

Long MZZ
Short IWM

PS. My parents still have their 1984 Macintosh with the tiny black/white screen and all. Obvioisly not in use.. but still runs.

Some very nice memories!