Two big earnings reports tonight

Capt. Jimmy Wilder: Let’s kick the tires and light the fires, big daddy! — Independence Day

It’s a brand new day with new people to meet, stocks to research and trades to analyze.  Tonight we have two of our biggest positions reporting earnings — Apple and Fusion-IO.

Apple is one of the most-watched earnings report on the planet at this point and that makes trying to game such an event harder than usual. Feet to fire, I’d expect the stock to bounce a little bit tomorrow but not a whole lot. The good news is that last week’s disappointed Google report helped to take out some of the weaker hands who were loaded up on GOOG/AAPL and now have left the scene. The bad news is that everybody knows that iPads and iPhone 4S’s sold like hot cakes, so unless there’s some big margin upside or Mac upside that shocks in the report, then it’s going to be tough to fuel in a short-rage cover tomorrow.

And then there’s FIO. This has indeed been one of the most wildly volatile stocks that you’ll ever own, as I’d predicted when we’d first bought some. You guys know that I was buying more common and calls all the way down to the low $20s and then nibbled on it some more as it started rebounding into the mid-$20s. This morning, the stock has crossed $30 a share and that means it’s now up nearly 50% from its recent lows earlier this quarter. I do expect a good report and some nice potential upside to the estimates in the report tonight, but I’m not sure how the market will react to that tomorrow. Late last week, I needed to trim some of this position as the calls and the common had gotten so big relative to the rest of the portfolio late and I’m holding the rest of the FIO position steady for now. If the report is good and the stock does get hit tomorrow anyway, I’ll probably buy the calls and common I trimmed back.

Kicking tires.