Thursday, February 10, 2011

Sell Apples, Make Cash

8:16 am (Hawaii). Sold the AAPL position at 358.70 for a 2% (almost) gain over two days. No complaints other than I should've pulled that trigger sooner (yesterday and today). The intra-day lower highs and lower lows (the past couple of hours) convinced me to step out. I'm relieved.

I can breathe a little better rather than wait for the herd to stampede out, though some of them already did above 359. I reserve the right to re-enter later today, maybe around 355-356. Could happen after that mad dash from 356 to 359 (and later 360). Not really expecting a drop today, though. Just wanted to lock in a decent profit, especially since I might fall asleep. These all-nighters are only fun with a profit in the pocket.

Update, 8:58 am (Hawaii). Got out in the nick of time. A few minutes after my sell, AAPL began to cascade over a major cliff. Most AAPL fans knew it was due for a selloff, but it went from 358 to 348 in a span of 17 minutes or so. This is exactly why I insist on trading AAPL short-term only at this point. The long-timers who got their shares at 95 or 200 can rest easy; this is basically a blip. But for traders who entered at these levels (I entered on Tuesday just below 352), sitting through a 10-dollar plunge is useless. Not sure how or why volume was so freaking huge to the downside, but it bounced off 348, came back to 354+, and is now settling at 352+.

Cleared out all the stop loss orders along the way, one more reason why I prefer to have a mental stop instead of relying on anything else. Whoever picked up shares this week with plans to hold it to 500 or 1,000, this is a blip, as well. I'd rather get out and see if I can get a cheaper price.

Update, 9:19 am (Hawaii). Should add that if I seem a bit paranoid about stop-loss orders in a momo situation, it's because I've been burned royally in bear raids before (DNDN).

Update, 10:02 am (Hawaii). Still no clear indication of what caused the early afternoon crash of AAPL.

Philip Elmer-DeWitt: Snapshot of an Apple flash crash

Here, the mini-crash puts a dent right through what had been a robust gain (after shares opened to the downside along with the rest of the market). I lucked out and exited just before that at 358.70. 

The two-day chart shows exactly how oddly AAPL behaved while the S&P 500 and NASDAQ went about the afternoon as if nothing happened. 

AAPL still near its all-time high. Retouching 360 is going to be a challenge after a lengthy run. 

Update, 3:02 pm (Hawaii). Kept an eye on AAPL and the Egypt coverage on TV afterhours, but didn't trade a thing. VXX was somewhat interesting, rising about 30¢ to 28.79 AH after Mubarak told his nation that he ain't resigning yet. Just not worth the move with contango and the way it hits VXX each morning to the downside regardless of externals.

Market finished flat, basically. APPL finished AH at 354.10, down roughly a buck after a flash-crash-like free-fall (see above).

DIS was barely in the red (43.31 AH) after yesterday's huge jump on great earnings. OPEN, ECA, BIDU, TBT, LULU, HAIN, POT and MOS all 1.3% higher or more. NFLX, AMZN, GLD fractionally higher.

Here's an excellent summary of why hardly anyone showed up at the stores for the new Verizon iPhone 4.

Philip Elmer-DeWitt: Why are the Verizon lines so short? 

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