The S&P 500 ETF (SPY) - Get Report fell 0.2% on Monday, which is better than some investors may have thought considering its largest component, Apple (AAPL) - Get Report , closed down 3.8%. Apple was down on fear it will deliver worse-than-expected earnings results Tuesday. Why? Supplier Dialog Semiconductor (DLGNF) disappointed investors with its earnings report and 80% Dialog's sales come from Apple.
On CNBC's "Fast Money" show, Pete Najarian, co-founder of optionmonster.com and trademonster.com, said he is long Apple and believes investors are making too big of a connection between the two companies. A main focus of Apple's earnings will be how the company did in China for the quarter. He reminded investors Nike (NKE) - Get Report reported a strong sales number in the country a few weeks ago, which should bode well for Apple.
Tim Seymour, managing partner of Triogem Asset Management, said the other big focus will be Apple's guidance for next quarter, which will include its holiday sales. Right now analysts are looking for sales guidance of 74.5 million iPhones.
Seymour said many consumers are buying iPhones with larger storage, which have a higher transaction price. This should help boost gross margins. There also doesn't seem to be an affordability issue in China - something many investors were worried about.
Guy Adami, managing director of stockmonster.com, expects Apple to report strong earnings although it seems investors are growing skeptical about Apple's ability to impress. Monday's decline seemed like investors taking profits ahead of the results.
Karen Finerman, president of Metropolitan Capital Advisors, said expectations don't seem too high, nor do they seem too low. The stock is priced fairly near current levels. As a long-term shareholder she does not feel compelled to buy more stock or take profits near current levels.
Nik Raman, founder and CEO of USell.com, a secondary market for used smartphones, said the trend for iPhone sales appears positive. USell's increase in sales suggests that more consumers are trading in their current phones (to USell) and buying new models.
Although shares of Apple haven't rallied much with the overall market, it doesn't mean there aren't other stocks to buy. Ari Wald, head of technical analysis at Oppenheimer & Company, said the Nasdaq 100 could rally for the next several months, and possibly the next several years. His top three picks include Priceline (PCLN) , Akamai Technologies (AKAM) - Get Report and Costco Wholesale (COST) - Get Report .
Najarian likes Priceline but said the stock has rallied too far, too fast and so should be bought on a pullback. Same goes for Microsoft (MSFT) - Get Report . Seymour agreed, adding that nearly every stock looks unattractive right now because the market has rallied so much this month. "I would be very cautious here," he reasoned.
Finerman called Costco a "great" company but said the valuation is simply too high for what has become a mature company.
Valeant Pharmaceuticals (VRX) stock closed down 5.3% following the company's conference call. Management came to defend the company after the stock fell 32% over the past five days partly due to its poor earnings results and partly because of a negative report from Citron Research.
"It's very, very cheap," Seymour said, acknowledging that while the company has its share of problems the stock seems oversold at current levels.
If this is the next Enron of biotech -- something Citron suggested-- then the stock is in big trouble, he said. For that reason, Seymour bought put options to hedge his downside risk after he bought the stock on Monday.
Finerman argued Valeant doesn't look attractive even if its accounting isflawless. Management isn't sure on the company's current strategy, and doing any sort of M&A or spinoffs will be near impossible given that negative overhang on the stock, she explained.