Monday, April 30, 2012

Head games

I like ZAGG. The stock that is. I know nothing about its products. Same with Skullcandy (SKUL), which makes those outrageous earphone headset things. SKUL reports earnings tomorrow. The stock is up significantly in the past week, but has flattened out a bit going into tomorrow. Should be real interesting to see tomorrow's price action pre-earnings.

Is it a better play than ZAGG? One investor thinks ZAGG may be the perfect (growth) stock. Skullcandy just has more interesting advertising, don't you think?

Note on SKUL: Float is just 8.33M, 42.5% held by institutions and short pct is 131% (as of Apr 13). Incredible and hard to believe. It's run from 12 to 17 since late January. Pulled back to just above 15 recently, up 2.9% to 16.12 today. No idea where it goes after (or before) earnings tomorrow.

Tarnished gold?

Gold finished higher today while silver got axed. But gold was downgraded today by HSBC, which means they're lying and actually hoarding paper and physical gold for the next few days, or they really don't think QE3 will be QE3.

Here's what MarketWatch had to say about the lowered forecast.

Gold will never go out of style. But it's still a market, and it's still about buy low, sell high.

Microsoft, travel and thinness (updated)

7:48 am (Hawaii) Barnes & Noble is up 61% on Microsoft's play for the Nook tablet. I like visiting B&N locally, but as an investment, it's been a dud for years going back to the war with Amazon. Now BKS is at 22.14, off its high today of 26, after Microsoft's move. 

Whitney Tilson was on Fast Money. He went long BKS last week, says it was 87% short. That's incredible and explains the run today. He says BKS was much less a value play at 26, but is "very attractive" at 22. Total of $605 mil from Microsoft. 

Also surprised by the move in EXPE, up 7.3% on top of last week's gain. All three indices are in the red moderately, and EXPE is up almost 3 bucks to 43.26. 

ZAGG, one of the AAPL plays, is up 6.7% to 13.11. I had my eyes on this last week at 11.99 and 12.29 and opted to wait until today. So even with a down market, ZAGG is rising fast with earnings due Thursday. 

AMZN is up another 2.5% to 232.41. I sold this at 219 last week, and the P/E is outlandish. The questions about the company's accounting maneuvers are not holding this back, it seems. 

AAPL is down 2.5% to 587.92 after one of the New York newspapers blasted the company for its tax strategy. Legal, but chastised anyway. I still would like to see AAPL at 546 (Fibonacci retrace), and with big money chasing other trades, it still might happen. AAPL got down to 555 last week before spiking. 

Light volume overall. No catalyst in the near term. Just a cool morning and an opportunity to sip a beverage, get work done and wait patiently. That would not be Monster energy drink (MNST), though, which is up 10% on rumored buyout talks (Coca-Cola) worth as much as $15 billion.

Update 8:19 am Fib retrace for BKS (based on today's gain off Friday's close) is 21.29. It sold off early in the day off the humongous gain down to 21.75. This was a broke company with negative EPS before this deal. Watching but not touching.

MNST Fib retrace is at 76.56, which it has breached easily. It got down to 71.47 before moving back to its current level at 76+.

Update 11:05 am I liked ZAGG on Friday, but didn't enter because of weekend wackiness worries in the general market. I passed at 11.99. ZAGG, an Apple play, closed up 6% today in a down market. Earnings out on Thursday; anticipation is high. But this run-up might translate into a selloff on the news. Today, ZAGG's intraday high was 13.27. A Fib retrace would've been at 12.89, and sure enough, the stock pulled back to 12.90 mid-day. I entered a half position at 13.02 just before the close.

This comes with some risk, of course. ZAGG has made a massive move from 10.66 at the close last Tuesday. That's a gain of more than 24% to today's high. How much upside is left? If today's modest pullback was a breather and the market takes off tomorrow and/or Wednesday, it would probably be good for ZAGG and other earnings plays. But I don't view this is a long-term hold, though maybe I should. Closing no doors just yet.

Update 11:40 am More info on ZAGG.

P/E 20.68, forward P/E 12.77
Shares outstanding: 30.04M
Float: 21.93M
Short interest: 47.7% (of float)

Tie that together with the Apple relationship and it's no wonder this has been combustible. ZAGG hit a one-year high of 17.10 on Aug 15 last year, just nine days after it had dipped to 11.40. But that's not the one-year low; the low of 6.67 was on Dec 28. This is a radical stock. Question is when to get out, and that answer will be dictated by price action and trading discipline. In other words, a decision would be best determined by stop loss rather than panic and/or greed.

Friday, April 27, 2012

Cobwebs and scopes

8:40 am (Hawaii) Well that was a waste of half a morning. Getting up (or staying up) early this week caught up with me. I slept right through what turned out to be an interesting open. AAPL has been stagnant, now bordering on 601 and possibly lower. The big money is playing everywhere else. EXPE opened at 39.20 and ran to 43; it was at 32 at the closing bell yesterday. AMZN, which I bought at 220 and sold at 219 afterhours yesterday in a pure chickenshit move, opened at 224.83 and ran to 228.69. Now at 225.37 after selling off to 220.22. It just won't die or pull back below 220, though it closed yesterday at 195.99 (before earnings were released). Was it accounting deception that produced a $0.28 quarter (versus $0.07 expectation)? Not a worry at all, not to traders.

Still keeping a close eye on SWKS, CRUS and ZAGG. The latter reports on May 3, CRUS has a tasty P/E (still below 13) despite the run-up. PCLN is riding EXPE's coattail, up 3.4% today. Tough to hold anything into next week; I want a selloff day to get cheaper prices. ZAGG below 12 would be nice; it was at 11.82 earlier. While I slept. Now at 12.29, up 2.5%.

Even GVSC, which got pounded yesterday, is up 4.1% to 17.65. Thinly traded issues (403k so far today) are too annoying. Indices pared down in the past 30 minutes. Maybe I'll get the prices I like. Careful out there.

Update 9:11 am So how is it possible that Spain gets downgraded/degraded and the market blows it off completely (after an early swoon)? This shit doesn't disappear in the long term. For now though it's just a rowdy boy at the fair. Drunkard at the carnival. They kick him out and he's ignored until his return. But he will return. That's what makes a buy of ZAGG or PCLN (May 9 earnings) difficult on this day, Apr 27. Plenty can hit the market between now and then. ZAGG and PCLN could still explode then. But it may ride lower before that. Or more likely both will simply climb (like today) on anticipation and peak out by earnings day. 

Price action dictates. And if/when the market gets rattled by the usual May fear, there won't be much reprieve for those holding the bag. 

So all's good when it comes to Spain, right? For today, the answer's yes. 

If you think bankers tell the truth, see what Santander's CEO claimed today

Thursday, April 26, 2012

Discount hunting (updated 10:58 am HST)

I want my price. Will these pull back just enough?

(Closing price to premarket high Fibonacci levels)
AAPL 595 (unlikely)
CRUS 24.45 (blowout earnings report yesterday after the bell)
FAZ 21.64 (possible)

FAZ trades on such light volume premarket. It's at 21.74 right now and could easily swing down to 21.64. It's up, I believe, on Europe weakness (as usual). I don't see AAPL dipping below 600. Jobless numbers were weak and barely affected the market, didn't harm AAPL one bit.

DGP and AGQ are green this morning, but not going there. Not today. Other "Apple tree" plays like BRCM, QCOM, SWKS are interesting. Keeping an eye on those.

Update 3:35 am (Hawaii) Holey moley, what a wacky, whacked OUT open. AAPL zoomed to 614+ two minutes before the bell, then fell to 611 after the open and below. FAZ sank all the way to 21.60 and has dropped below 21.50. It's cheap as I wanted, but I'm never entering something that sells off that harshly (re: ugly candles on the chart). There's something going on and I don't want to tread in that swamp. (Now 21.39!)

Indices are flat, slightly green. But really, what are FAS and the finnies doing afloat when Europe is so fucked? Meanwhile, CRUS is exploding, now 26.09, parabolic in these first several minutes. Will not chase. Waiting for a dip.

New fib # in CRUS is 25.07. Patience required.

Update 3:46 am CRUS finally dipping from its 12+% high this morning. Did a little homework and Cirrus has a trailing P/E of 10, forward P/E of 11. Discount to the max. This is almost too good to be true, the need for Cirrus' parts in Apple iPads. Add in these factors: Float of only 64 million shares and short interest of more than 10 mil. Explains the big bounce today.

Update 9:35 am Stayed up long as I could before getting some sleep the past few hours. CRUS almost came down to the 35.30s level (Fib retrace), but not quite. It's now near the day's high at 27.32, up more than 18%. The short covering hasn't ended, I guess. Incredible. But I won't chase. 

ZAGG, which announces earnings in one week, is at 12.05 (+5%). That's more interesting as a chance to ride momentum, but I don't want to chase. AAPL sank to 602+ but rallied to 610 (break even for the day). Then it slid to 607-608 in the last few minutes. 

The indices are all green (+0.7 to 0.9%) with 20+ minutes left in the session. Market is totally setting Europe issues aside, even ignoring today's lack of earnings beats. It's an iPad hysteria society from the US to Beijing. My job is simply to buy low and sell high, like the janitor at a high class party for rich, drunk frat boys and sorority girls, just picking up expensive jewelry that's fallen to the floor. 

Update 10:15 am Speaking of discounts, SBUX has cratered in after-hour trading after beating estimates by a single penny. A lot of disappointment on Twitter, but apparently earnings were nowhere near consensus estimates. I know it's tempting to sit in a Starbucks with the Apple lapptop on, sipping a favorite concoction feeling like AAPL and SBUX are the fricking bomb.

But unlike AAPL, SBUX did not destroy any estimate whatsoever. It went from an intraday high above 61 to 57+ after the news. Now at 58.10. This is one of those situations that guru StockGuy22 might pouce on. He's great at recognizing an oversold or overbought situation and profiting. But I don't know if he likes this. I spend way too much money at Starbucks. Though they're usually busy and crowded — the one in Mililani was packed at 10 pm yesterday — a 1¢ beat means they're no AAPL.

Update 10:30 am Now it's DECK that disappoints the bulls. Seems to be one of those late-in-the-week earnings are the Debbie Downer stocks, while the early-in-week earnings (AAPL, et al) were the gainers.

But as I type that, AMZN has beaten estimates solidly and is trading at 200, up from 195. Zooming higher. Now 204, 205. Yowza. $0.28 vs. $0.07. Wipeout.

Update 10:34 am SWKS (Apple play) is also up big after hours, now 27.02 after closing at 25.54. Just don't know enough about this company to step in.

Update 10:58 am That was a bit childish. I missed AMZN on the news at 200, 205, 210, 213. Got in at 220.50 and sold back right below 220, spooked out. But it's holding above 220. Major, major short covering. It'll be tempting to re-enter before afterhours trading ends for a probable bounce in the morning.

Wednesday, April 25, 2012

A fine time for Apple w(h)ine

Work is done. It is night. I can't stop. I keep returning to the task at hand. When is the right time to get back into AAPL? I can't argue against taking a one-day profit after a 9% gain. No way. But Apple Inc has so many positives under its wings, it is ludicrous to waste time, energy and resources investing or trading anywhere else. That's a bit extreme to say, but you get the gist.

AAPL rides on big waves, i.e. catalysts. There's none in the near term, but the next one could be a deal with China Telecom, which has 660 million users. Thinking longer term, it's insanity to ever sell AAPL shares with that kind of potential. If I had a much larger account, sure, I'd invest with a long-term position and trade around it. But getting in and out suits my approach (and modest funds), hopefully with lush results this year.

Here's Bloomberg's report on Apple including the China Telecom reference.

The Day After: Apple Pop (updated)

You could almost drink it, the Apple kool-aid. I would be a happier man had I never sold a share of AAPL some time ago. But it is past. This morning, AAPL was at 616 in pre-premarket trading. Currently at 611+. Might be a good time to sell and re-enter with the volatile swings ahead. Or it might be a good time to ignore the turbulence and let shares ride. In between is not recommended, as in buying high and selling low, unless the world market really is about to burst.

That won't be this morning, however. Instead, gaze upon natural beauty and relax. It's Tuesday and a good day to be alive.

Update 4:04 am (Hawaii) Just sold half the AAPL position at 616. Is there really a good time to sell AAPL? Flat answer is no. But since I'm energized this morning, trading the swings may work well. Beats using margin to buy more. If AAPL dips to 595 (Fibonacci retrace from this morning's high [618] to yesterday's close [560], I'll be eager.

Update 6:31 am Added 1/2 AAPL shortly after selling it, entering at 615.75 to round out the position again. But that was way too early. It tumbled down to 607+, came back to 612 briefly, then declined gradually. I got out of the position at 609. On the whole, a nice profit, but I did give back roughly 28% of my paper gain. Sure part of me wants to just lock up AAPL shares and hold for a long time, but with the Fed interest rate news and a shaky market, I'll sleep better with a clean slate.

Update 6:36 am Fed stayed neutral and no change in interest rate. AAPL dipped toward 608, but is now back at 610. I still anticipate a Fibonacci level move to 595 in the near term. TraderFlorida (Twitter) was right about the inevitable selloff on such a huge gap up. But a profit is a profit and I banked a decent one with the sell at 616.

Looks like the swing trade on AAPL is on my horizon. Why mess with anything else?

Tuesday, April 24, 2012

Fibs and Apples (updated)

Well, that 546 (Fibonacci) level I've waited for is getting closer. AAPL dropped to 556 several minutes ago due to 1) profit taking and 2) supposed low iPhone activation stats released by AT&T. Something like that. Whatever. I'm not a buyer of AAPL above 600 nor do I believe people are going to stop buying iPhones, especially when the iPhone 5 comes out. Heck I want one too though I probably won't get one. I just understand the fury and obsession over it.

I just haven't appreciated that fury and obsession quite enough. Otherwise I wouldn't have sold at 106 or 257. For now, keeping a close eye on AAPL. It's down 2.6% for the day to 556.49, pulling the NAS down while the DJ and S&P are up.

Update 10:38 am (Hawaii) I picked up a 1/4 position in AAPL at 560.40 just before the bell. Not much risk, my opinion. After hours, I looked away from my screen for a few seconds and AAPL bounced to 581. Even while it was rising to 585, Maria Bartiromo and her guests on CNBC were still unaware for about 20, 30 seconds. I added the other 3/4 position in AAPL at 589. Blowout quarter. No surprise.

11.8 mil iPads sold
35.1 mil iPhones sold

And that was a "slow" quarter as many iPhone fans await iPhone 5 out later this year. The upside remains gargantuan. Apple bulls talking about less than 5% of the European market, plenty of room to grow there. I didn't get my 546. AAPL hit a floor at 555 today. The only factor(s) that could keep this below 600 and 700 from here is the external market, i.e. global conditions.

Update 11:05 am (Hawaii) AAPL staying above 600 (for now). Below, footage from an iPhone 4 release in 2010 in the Bay Area.

Update 12:31 pm (Hawaii) After dipping to 595+, AAPL ran back up to 602+ and is now hovering at 600-601 after hours.

An observation about Twitter, Apple and positioning. Is Twitter the next shoe to drop (for $10 billion)?

More chatter online about China growth. China revs for Q2 were $7.9 billion. This video below shows how crazy it can get there when new Apple products are released. This was from last May (or so).

From 2010, the first iPad release in Beijing

Friday, April 20, 2012

Stoning Munster?

Howard Lindzon crack-backed Gene Munster this week about the $1,000 price target on AAPL. So be it. But AAPL is going to 1,000 largely because of operating margins and continued year-over-year growth rate. It is also going lower in the near term. My Fibonacci level on this run (from 396 to 640) is 546. Maybe AAPL dips to 555 or 570 or 550. But it will bounce eventually.

Wasn't so long ago when AAPL was below 200, a few talking heads were barking about how cheap it was below 200 and buy, buy, buy! The majority said, at that time, that AAPL was fairly valued. I sold at 257. I should've been buying more. 400 wasn't even on my radar, let alone 500 and 600. Same thing with 800, 900 and 1,000.

There just isn't enough competition. The cool factor for Apple toys trumps recession. Even those who would stone Munster can see this.


Timing is

It's everything. Had I just slept through the session, as I've mostly done since last fall, I would've found my FAZ position in the green. After getting a handful at 22.29 yesterday, it's now at 22.34 after hours. I sold the position in premarket today at a stinging loss, 22.65, concerned that someone out there was about to start printing fake money in droves. Again.

So my instinct and logic were right. My process was not. Needs repair. That 0 for 2 this week in trades. The first was a FAZ buy at 21.75, which stopped out shortly after at 21.65. The problem is holding FAZ overnight and not having a multiple-choice plan. Once BAC was downgraded by bank analyst Mike Mayo to "sell", things went bad for financials.

And I would've been at break even instead of losing sleep by staying up late (premarket here is 2 am to 3:30 am). Now we have the first leg of the French elections this weekend, and I'm in no mood or inclination to get back in FAZ through that mess. I think.

This 1% (overall) loss has stoked a fire. I like trading FAZ, had some success with it, yet I rarely study the sector. I hate the fecal-breathed liars who run most of these banks, but I wouldn't have a problem riding BAC 50% had I gotten a position on Jan 1. First and foremost rule, make profits. Second, goes with the first, cut losses quickly. Third, emotion has nothing to do with the first and second.

I chide myself for selling AAPL in the 100s and 200s, but going in and out on the way up to 640 would've been profitable too. No sense dwelling on old success or failure. What's going on now? Though us retail traders are small fries, we still have far more efficiency in play than we did 10, 20, 40 or 100 years ago.

So I plan to spend what little time there is this weekend studying up on the finnies. After all, once Bernanke stops waving 'Ol Glory and orders maximum printage (my word) of fiat currency, that lying con man Dimon will be laughing all the way to his bank again, FAS will be on fire and logic will dictate that BAC and the rest of the sector will launch again.

It's that old Tao of War morsel:

"It is said that if you know your enemies and know yourself, you will not be imperiled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle."

Thursday, April 19, 2012

Dabbling and babbling

Took a ride on FAZ Wednesday, jumping in at 21.75, only to be stopped out at 21.65. Why use stops? If you're asking that question, you may not realize how dangerous FAZ (and FAS) can be. These 3x poltergeist monsters can make or break an account in minutes, even seconds. (There was a day years ago when I made 4k and lost 4k in premarket on FAS. That's what a quick trip to the toilet cost me on that wild morning, but it was a lesson well learned.)

Got back in today at 22.29 and placed a stop at 21.89 before I left home for a journey. FAZ eventually dropped to 21.95 before closing at 22.06, so my position is still in play. I don't feel any certainty about this trade. LaGarde is begging for more invisible fiat currency to be printed, and it could happen overnight. Or it could drag out through the France presidential elections later this month and in May. Bernanke has already said, at least for show, that the US will not save the Euro. I don't believe him, but that's what's on the table for now.

The low volume in Wednesday's rally was a convincing factor for me. And financials are not rallying even as they "beat" earnings estimates. Everything's baked in, and the retail trader has no interest in buying anything that's bloated or overbought, even at low 14x earnings levels (AAPL).

But when AAPL gets to my target of 546 (Fibonacci retrace from the 396 level late last year), I'll be itching to get in. While the rest of the planet earth crumbles, every last consumer will trade in whatever he or she can just to have an iPad and/or iPhone 5. By then, I'll be out of FAZ, long before (hopefully) the US and Europe are printing cyberbucks for nothing.

Sunday, April 15, 2012

bigdad06: Mutiny in the pits!

AAPL due for descent?

A Fibonacci-level retrace of AAPL from its high (640) toward the base of its recent runup (396) puts a pullback (of 38.2%) at 546-ish. It would be rational. Normal. Acceptable. I'm not alone. This Seeking Alpha writer sees 545 as a possibility.

Wednesday, April 4, 2012

Wednesday cinema & library


Wed AM

Scavenging for golden apples

I do regret selling positions at AAPL awhile back. Bought at 95. Sold at 106. Bought at 214. Sold at 257 (after riding it down to 190 or so). My faith in AAPL was supreme. So why didn't I just hold to 629? It's a question I keep asking myself. I know I'm not alone.

For now, logic dictates that AAPL's climb is far from over. The company is eating competition for breakfast, lunch, dinner and midnight snacks. Only Uncle Sam could slow Apple Inc. down, and that would be so temporary.

The latest run started at roughly 397 and peaked at 629 yesterday. A Fibonacci pullback (my version) of 38.2% of this runup would take AAPL down to about 542. Entirely reasonable as a new floor or level of support for the next massive leg up. AAPL is trading around 623-624 in premarket today. A pullback is due, but with all sorts of funds ready to unleash rivers of stagnant cash into the market, AAPL will benefit from value investors and tech traders alike.

Maybe it never smells 542. Or 592. But I'm glad to be waiting for a significant dip rather than chase it. I suppose that's one of the reasons I never got back in after selling at 257. I was greedy and wanted back in cheap. That just hasn't happened, but even here AAPL is less than 18x earnings — lower than the market average of 21x earnings.

If I had to guess, 600 would be the support for AAPL. Human psychology is predictable that way. With iPad sales exploding and iPhone 5 around the corner, the masses will probably view 600 as the "old" price soon enough. The economy still sucks and people spend like crazy for their iPads. That is truly power to the nth degree.