Wednesday cinema & library

A Visionary for our time

A Visionary for all time

Rest in peace, Steve

Steve Jobs

Reuters: Apple co-founder Steve Jobs dead at 56 (Oct 5)

MarketWatch: Apple's Steve Jobs dies at 56 (Oct 5)

CNBC: Steve Jobs: His life in pictures (Oct 5)

Macworld: A look at Steve Job's life and times (Oct 5)

Blogs

Zero Hedge: Le Figaro discloses France has prepared an emergency nationalization plan for 2 or 3 banks (Oct 5)

Golden Truth: 'New price' (Oct 5)

Peter Tchir: Is Morgan Stanley's biggest asset their debt? (Oct 5)

Zero Hedge: Reason for latest rally: Morgan Stanley leaks own, Goldman's numbers (Oct 5)

Zero Hedge: Mutual fund outflows surge, yet stocks refuse to plunge (Oct 5)

Dan Norcini: Gold still stuck in a range (Oct 5)
Street Insider: Don't worry, if you're rich you won't pay Bank of America a debit card fee (Oct 5)
SGS: Dear James Gorman (CEO of Morgan Stanley) (Oct 5)
Turd Ferguson: Three things to consider (Oct 5)
JS Kim/Zero Hedge: Utah Monetary Declaration of freedom (Oct 5)

Reggie Middleton: Sliced Apple margins for dinner? (Oct 5)

Zero Hedge: FT rumor time: Stress Test III (or optimal Greek haircuts) (Oct 5)

Zero Hedge: Friday's NFP will be disappointment (Oct 5)
SGS: Am I in 2008 Lehman days? (Oct 4)
Charles Hugh Smith: Heresy and the US Dollar (Oct 4)

Vlogs

Christopher Greene: Bank of America having digital bank run, website down 6 days (Oct 5)

Keiser Report: Occupy Keiser Report! (Oct 5)

manoftruth: Roseanne Barr on Alex Jones Show (Oct 5)
ScrapGoldBusiness: $25 paper silver coming soon? (Oct 5)

Hit the Bid: Krull to arms, it's coming (Oct 5)

Realist News: The monopolies in money and healthcare (Oct 5)

H1INC: F*ck Wall St, occupy your mind (Oct 5)

george4title: California meltdown, coming soon to your neighborhood (Oct 5)
1beinki: Max Keiser's new plan, 'Tear up your dollars!' (Oct 3)

Audio

Peter Schiff: Is Obama's econ agenda stolen from 2nd graders? (Oct 5)

Film

Silver Circle: Official :60 trailer (Oct 5)

Mainstream

(video) CNBC: France, Germany to get downgraded? (Oct 5)

RT: Greek Debtlock: Riot squads fire tar gas at bailout protestors (Oct 5)

Yahoo: America is on sale: Robert Kiyosaki (Oct 5)

Reuters: Asset sales hard for stricken Eurobanks specialist (Oct 5)

Reuters: Bank earnings outlook even worse than before (Oct 5)

Scribd

Citigroup Off-Balance Sheet Risk (Oct 5)

photo: NewBottomLine.com

Holy Apple

12:52 pm (Hawaii) It's already been a tumultuous day. Now this?

MarketWatch: Apple CEO Steve Jobs resigns

AAPL is trading flat in the past 10 minutes since the news was reported at 375.50. Never wanted to see this day come, but health is and always should be top priority. Wishing Mr. Jobs the best.

Update 1:01 pm Okay there it goes. AAPL traded down to 351+ in the past 4 minutes. Bouncing to 356+. Jobs is recommending Tim Cook as his replacement, but really, this drop is no surprise. There's nobody quite like Jobs. I think AAPL makes lower highs and lower lows for the next two sessions. Might be a bargain before the week is done, especially if Bernanke says zippo.

Business Insider: The life and awesomeness of Steve Jobs (Aug 24)

Business Insider: Here's what you need to know about Tim Cook (Aug 24)

Business Insider: Steve Jobs' letter to Apple (Aug 24)

Rise and shine

9:36 am (Hawaii) Been in and out of sleep since early morning. When I did check my live charts, it seemed like something was wrong. Maybe my connection was off. Nothing moves this weakly, right? It does, actually, at least with XG, which has been locked around 11.35 for most of the day. In fact, both the slow stochastics and MACD look like one beach and one big, big wave early in the day ... followed by nothing by suds. Whitewash. Nothing surfable.

AGQ had more action and that's saying a lot since it opened higher, dripped down to 202 and then went back up to 206 ... that's usually enough action for 30 minutes in AGQ. But that's been the day so far.

In fact, with the news about Apple officially announcing the arrival of its iCloud, PLUS Steve Jobs being part of the presentation on (Monday) June 6, there may be a shift of some magnitiude this week for traders. PMs will still have their place in the pecking order, but AAPL's action today was significant, going from Friday's 337 close to 343 for most of today. The past couple of hours, AAPL has risen above 346 and is approaching 347 on heavier volume.

It's an "expensive" stock for some quick traders, but when AAPL gains steam, it's a phenomenal ride.

Rip Van Apple

12:16 pm (Hawaii). After sleeping through most of the session, I arose to find the markets generally flat for the day, if positive. I also found AAPL hovering at 330 despite opening around 338. Support is at 326, which AAPL tested earlier in the week. As I lie here in bed with my (not brand new) MacBook Pro, it is a true WTF moment. I checked headlines. Nothing. Then I explored forums and learned that CNBC has reported rumors of Steve Jobs' resignation.

That would explain the incredible avalanche of selling during that 45-minute stretch in the morning. Possibly with the problem of the supply chain (Japan), a lot more people had stop-loss orders on their shares. eBay listings have iPad 2 available anywhere from $600 to $1,400 today. In other words, a buy-and-trade on an iPad 2 was a better profit than the stock this week.

From here, it's all about AAPL refuting (or not) the rumor, and updates on the Fukushima nuclear reactors. The rest of the market, I'll take a look at later. But as I get the cobwebs out, this is all that really matters in today's session to me. If Thomas Edison had run his own publicly-traded company and turned gravely ill, would it have been bigger than this to his shareholders? I theorize that it would have been of equal scale. Not necessarily of equal importance, but the scale of Jobs' status is like no other individual in the market. If the rumor turns up true, I expect a selloff of about 8-10%. That could take AAPL down to the next support level of 297-300. AAPL has been undervalued even at its highs in the 360s. At 300, it would be a pure buying opportunity, global events pending. If the rumor is not true, better yet. I'd rather see Steve Jobs healthy and with us for decades to come, more than anything for his family's sake.

I'm still 100% cash here. Binoculars at my side.

Michael Schulman: The new buy and hold stock: Apple (Mar 14 2011)

Weekend reading

Weekend reading

CNN Money: From Guns N' Roses bassist to money manager (Mar 4 2011)

Zero Hedge: Silver shorts bloodbath (Mar 4 2011) 

Trader Dan: Trying to solve the silver COT mystery (Mar 4 2011)

Salt Lake Tribune: Utah House stamps gold, silver as legal tender (Mar 4 2011)

John Embry: Gold to $1,650, shorts to get crushed (Mar 4 2011)

Clyde Prestowitz: 2011: Waiting for the global economic tsunami (Mar 1 2011)

Jason Hommel (podcast): Here's why silver is headed to $500 per ounce (Mar 3 2011)

Kitco: Gold, silver seen strengthening next week (Mar 4 2011)

Big Gold: How safe is your physical gold? (Mar 4 2011)

Motley Fool: Silver Wheaton, the most profitable company in the world (Mar 4 2011)

Apple (video): Keynote iPad 2 presentation w/ Steve Jobs (Mar 2 2011)

Pointy and loaded

Update, 2:18 pm (Hawaii). Quick thoughts about tomorrow's possible vehicles.

UCO — Crude could go to the moon, but I'm not convinced that the White House won't have a say in controlling the inevitable pain. That's why I don't believe today's run to 102 (and UCO's move from 52 to 54) will repeat daily. Pass (for now). Unless those Saudi tanks start firing. Then I'm riding that UCO to the bank. 

AAPL — Steve Jobs speaks, AAPL runs from 349 to 354 and pulls back to 351. Now nearing 353 after hours. Trading range now 350-355. What would push AAPL back to 360 and beyond? There's no catalyst until March 11 when iPad 2 hits stores. Until then, fund managers are going to stay out. But the appearance of Jobs is a major key to forward consistency in the stock. At 354-355, AAPL was 5% up from its near-term low (338). No point in entering a new position here unless it's for a swing trade to 360 or 370. 

Does it matter that we got to see Steve Jobs back? Heck yeah. To deny this is folly. 

SLW — Even if the precious metals run is taking a well-deserved breather, I'd hate to be napping (again) while SLW takes its next leg up. It will happen unless JP Morgan shocks Planet Earth and reveals that it has found 1 trillion ounces of silver. "We totally forgot. It was in Grandpa's attic. Sorry." That won't happen, so a long-term position in silver is prescient. Especially if you got in last year. Or the year before.  By the way, I think it's time for the precious metals industry to get hip to marketing. Wouldn't Silver Surfer, aka Norrin Rad, make a great spokesman for Silver Wheaton? The possibilities for insanely magnificent TV commercials, web commercials boggles the mind. Disney, Stan Lee ... talk to these guys. 

PSUN — Still have no idea what makes Pacific Sunwear so appealing to Sir Le Fly. This is why he rakes it in and I am a lowly knave. But a lot of it has to do with A) spring season, B) rotation to retail in March and C) the company's beaten-to-a-pulp stock. At 4.52 (up 6.1% today) after hours, it's still an interesting "penny". Heck, it opened at 4.27 today. Who missed the ride? The knave, me. 

The last time I traded in a retail clothing stock was LULU. Rode it from 45 to 60 a few years back. Nobody told me it would sell off back to 30. I got out at 45, broke even and that was that. Doing research on Lululemon Athletica was never boring, though, not with those great yoga tights and cool graphics. But LULU is off my radar at 75. It's about PSUN for now. 

Pacific Sunwear

Market cap: 298M

Profit margin: -10.2%

Operating margin: -7.3%

Revenue: 959.1M

Quarterly Rev Growth: -3.9%

Total cash: 43.9M

Total debt: 29.2M

Float: 41.4M

Short % of float: 25.7%

Source: Yahoo Finance

Debt is manageable. Short interest is huge. This could get chopped in half or simply blow up the shorts. Speculative to say the least. Somebody must know somethin', right? 

OPEN — Another Le Fly tout. No arguing with him. 

• "The only real threats are Yelp and Trip Advisor, and both are partnering with Open Table instead of competing." 

• "I like OPEN here for the $100 roll. Aside from the fact that they own Top Table in Europe, if you look at your Tripadvisor.com and Yelp.com apps, you can now book restaurant reservations via OPEN. This was not the case just a few weeks or months ago (who knows, really?). ... this is huge for the company." 

Is he right? I don't use Open Table, but the leverage and traction are undeniable. First mover. It's a play on Groupon and ReachLocal and all that social foodie networking. At 86.10 afterhours, OPEN is still down from the recent high. 

For tomorrow, I rank these four like this: 1. AAPL, 2. OPEN, 3. PSUN, 4. SLW. 

For longer term: 1. AAPL, 2. SLW, 3. OPEN, 4. PSUN. 

Thursday's aren't exactly bullish lately. Doesn't mean there's a lack of opportunities. I just need one and I just need to execute according to parameters, unlike the latest trade. All cash, 100%. 

Update, 6:46 pm (Hawaii). The point about rotation out of (fill in the blanks) to retail in March is well taken. Look at PSUN vs. two retail ETFs (XRT and RTH) and note the stock's progress in March, even through April, for every year in the past five. 

PSUN 5 year, monthly

PSUN 4 year, weekly gives better feel for spring runs

PSUN 1 year, daily

PSUN 6 month, daily

25% short coming into the strongest season

PSUN 1 day, 1-minute chart

Conclusion: If I were to open a position in PSUN, play money only. Shorts often know inside info long before retail schmucks like me. But things would have to be awfully bad — as they've been — in the Cali economy for the carnage to continue. Any positive catalyst, plus the strength of springs past, plus huge short interest, would set this stock skyward like a rocket. 

Update, 7:30 pm (Hawaii). There is no Saudi Arabia or TASI (stock market) ETF. After next week's Day of Rage (Mar 11), at some point the TASI will rally. In fact, after 13 consecutive days down, it's a mathematical probability, to say the least. The only way to play the TASI that I can see is crude oil. 

Update, 9:21 pm (Hawaii). Fibonacci applies in the recent swings of AAPL: 326 to 365 (intraday high); 61.8% pullback of that gain was 340; AAPL dipped to 338; reversal at Fib level (of the decline from 365 to 338) takes AAPL back up to 355, which was achieved on Tuesday. Probably more incidental than true Fibonacci, but very interesting. From here, I think a new range will be established thanks to 1) iPad 2 furor (new catalyst) and 2) Steve Jobs' appearance. Apple is handling the marketing differently: no pre-orders before release date (Mar 11). Also, no iPad 2s will be sold until 5 pm that day, which is a Friday, setting up the potential for long-ass lines and a weekend of Apple Mania. The buzz will be on. It will be difficult to look elsewhere to make a trade for me and probably a majority of traders. We're in between earnings report seasons and the global environment is sketchy. So there's AAPL. The run has probably begun (after bottoming this week so far at 348). 352 afterhours today and probably higher in premarket tomorrow. Guessing that AAPL nears its all-time high (365) before March 11. 

And finally, the funniest chart of the day.

18-year chart, monthly

AAPL def. SPY, by a hair

Wednesday reading

Total Investor: History lesson: Oil price spikes and their aftermath (Mar 3 2011) Excellent collection of historical spikes and US military involvement that drastically reversed crude prices. In other words, wouldn't want to be long UCO the day the US announces sending forces to Libya. 

Zero Hedge: China 'attacks the dollar' — moves to further cement renminbi reserve currency status (Mar 2 2011) "... Central Bank would respond to overseas demand for the yuan to be used as a reserve currency." This comes off last week's news out of India, tying the rupee to the RMB. So ... what's the play here? There's an edge somewhere in this. 

Zero Hedge: A deep walkthru for silver manipulation - redux (Mar 2 2011) "... I thought fundamentals and gamesmanship were useless in the face of almight Standard Deviation model. That was a mistake." 

AP: Oil jumps over $102 per barrel (Mar 2 2011) 

Jeff Rubin: Only a recession stands in the way of $200 oil (Mar 2011) "... it will be difficult to keep prices from moving even higher as investors start piling on the oil bandwagon, particularly when they see Saudi Arabia's much touted four million a barrel a day excess capacity is largely of the fictional variety." 

Silver guru Morgan: Get ready for a major correction (Mar 3 2011) Although he's still very bullish about silver in the long term, but "... sentiment is too high and secondly gold hasn't really confirmed this move yet." 

Turnaround Thursday

10:03 am (Hawaii). Got up an hour ago and the market has bounced back moderately. Manufacturing numbers out of Philadelphia, CNBC says, were the catalyst.

AAPL still hovering at 358, but metals continue to rock. SLV (+3.5%) and EXK (2.3%) are up big thanks to chaos in the Middle East (Day of Rage). SLV up almost in a straight line since January 26.

VXX (+1.4%) still up. Won't be touching that due to overnight contango effect.

LVS is up again (1.2%), now 48.82. I remember it trading to the low 46s after its earnings report two weeks ago. AMZN, VZ, CMG all up.

AAPL was actually at the bottom red end of my watch list early in the session, but has been replaced by RLOC and GMCR (-4.5%).

I've come to accept that the protests and rioting of the Middle East have become a combined catalyst that will not cease for weeks, if not months. That makes oil, gold and silver prominent, almost on par with a former "safe haven" like AAPL. Not interested in chasing SLV here, but I'll stay tuned for the next news event. Will there be another Day of Rage? Of course. People there are pissed.

EXK has traded in a range of roughly 5.50 to 7.50 for since November. At 7.20, it may be ready to break out. I wrote last year that speculators and traders had pointed out silver as an unappreciated vehicle, that there was massive hoarding going on. Whether that's true or ever was, the extremes of the past few months in the price are a great opportunity. EXK has a  float of 68.6 million shares and miniscule debt ($337K). The numbers are positive up and down, but this is a tiny company ($82.3 million revenue). At 5.50, a great buy in this environment. At 7 plus, watch out. Is it worth the risk? Will the rubber band yank it back when it touches 7.50?

SLV is also almost too hot to touch by most indicators. Traded between 26 and 30.50 since November and today is at a threshold (31) on increased volume. Tempting. I've always liked physical silver — looking at it more than owning it — so the appreciation of the metal is something to handle. As a piece of paper, it will always be a risk. Any government can seize paper assets of metals. It's happened before (long ago). But right now, SLV and EXK are alluring.

AAPL might be a great buy here at 357, but even without any Steve Jobs health issue, it always has pullbacks after earnings. I'm not willing to park into a position and wait for a catalyst. I'm willing to wait for a great price. But clearly, this is not just about Steve Jobs or app subscriptions. It's also about our personal issues with diseases like cancer. If we're comfortable enough with how the disease is treated, how it has affected our families and how we've dealt with it, the media circus around Mr. Jobs matters less. But there are still many traders and investors with panic buttons when it comes to anything negative or perceived as negative about the CEO. 

One nice healthy photo of Mr. Jobs and Mr. Obama tonight could set shares on fire again. 

NFLX, LULU and other momo movers are fun if you can take the heat. I prefer something cooler with a P/E I can trust. Doesn't mean I won't touch momos. But I know my preference and I'll work with it.

Thursday tabled?

This morning's market: a noble gas, indeed

4:29 am (Hawaii). You knew it. I knew it. Everyone knew it. The market was due for a breather. Maybe a correction, but more likely, a rest. Nothing goes up forever, especially at the rate of the past several months.

In premarket, metals and I-hate-this-world ETFs like VXX and QID are up. Nothing extreme, mostly up to 1% or less. Almost everything else is in the red, including AAPL. which apparently rallied over 360, but is now back below 358 even though it seems Steve Jobs is going to meet President Obama for dinner. How sick could he be if that's the plan? It comes down to investor confidence and the need to register profits. AAPL is taking a pit stop.

If this is strictly a buying opportunity, I don't want to miss it. And with the opening bell, AAPL is already over 359. Zoomzoom.

Remember, tomorrow is options expiration. The usual weirdness will likely prevail until then.

Purely momentus

3:25 am (Hawaii). Is the pit stop already over? In lieu of a real pullback of 5 or 10%, the market is awash in green numbers on my iMac screen. It's stunning, confounding ... I'm all cash and happy to be there, but sans bad news, the market is possibly ready to take flight once again without me.

AAPL is set to gap higher if it holds here at 361.44. A 50% retrace from today's premarket high to 360.74 or so, would've been a nice entry point for a short-term trade, but it wouldn't even come back to 361 even. I may be a whore for this stock, but there's a limit to how much I'll chase. Must maintain a shred of dignity and discipline. Or not.

A gap here could be a runaway freight train, a cliche that invites an image of a perilous crash. Whatever. I just think that above 360 AAPL could run several more dollars higher. Pull back. Run again. Pull back. It's a fund manager's must-have. Who can blame any of them? The world's reigning filthy-rich megastock with a ridiculously low P/E, 75% growth YOY and $59 billion under the matress.

Yesterday, AAPL touched 361 in premarket and never got close after the opening bell. But with 3/4ths of my watch list green, is it reasonable to assume that all of these stocks are being played by the specialists? Don't think so.

What else is green in premarket? VCLK (+12.9%), POT, LVS, NFLX, EGPT, on and on and on. More like, what's not green? That would be HAIN (big run lately), TBT, OPEN, QID, ARMH, VXX, RLOC.

Update, 4:33 am (Hawaii). Missed the 50% retrace of AAPL. Came all the way down to 360.50 or so but I was cautious about such a steep drop after the opening bell. Then it moved back to 361.50-plus within a minute. Volume is definitely there. This may be liftoff, after all.

Update, 5:20 am (Hawaii). AAPL to the moon, now 362.68. Major buying pressure the past 10 minutes, from 361.20 almost nonstop higher. The move came along with positive divergence in MACD. Missed my chance at the opening bell on the 50%-plus retrace from yesterday's close. Oh well ...

Next retrace (50%) entry is 361.35. Not expecting a pullback to that level, but I won't chase.

Update, 5:26 am (Hawaii). 50% retrace would be 361.45 now. HOD is 363.00. Likely was a short squeeze. AAPL longs having a party.

Update, 8:36 am (Hawaii). Somewhere, the angel in charge of stock moves is shaking his head and giggling at me. Really. As I drifted into slumber — hey, it was early morning and even two Red Bulls overnight couldn't keep me up longer — Newton's Law took effect. AAPL came back down to earth after touching 364.90. In fact, AAPL retraced even mote than 50% (of the day's gain) and bottomed at 361.42. (Retrace was nearly 70%.)

Maybe I should've put in a limit buy order, but falling asleep wasn't in my plan and I don't care for hard orders of any kind. Anyway, after hitting that level, AAPL ramped up and rose to 363.44, a gain of $2. In the past hour or so, shares have meandered around 363 and change.

So, I've been in cash all day, amazed by the spike in AAPL, not a penny made. Not a penny lost either. The market remains in the green, but gains are not as broad as they were earlier.

Update, 9:21 am (Hawaii). The two major drops in AAPL (and to an extent, the general market) were at 11:21 am (Eastern) and 12:01 pm (Eastern). There aren't many steady declines in the stock nowadays. It's gradual, no-selling pressure climbs that peak and get sold off violently. Whether they're activated by robots or retail stop-loss orders is not the issue. AAPL is top-heavy, a big dude who can bench press 700 pounds who also has pencil legs and tips over at the slightest breeze of 1-2 mph.

Shares are still up more than 3 bucks for the day (almost 1%). Without a catalyst, the guess here is that late-arriving funds have established their positions since Monday. There's no edge to buying here at 363 as a retail trader unless a final-hour buying spree kicks in. I'll be much more willing if shares get below 362 again.

9:55 am (Hawaii). So, Disney and Apple drawing new lines in the sand today. Disney tells Netflix and Coinstar wholesale rates are going up for its films. Apple making that 30% cut the anchor rate of sorts across its app store. Anyone still think Steve Jobs really isn't working behind the scenes at both companies? His prints are all over this. Good for profit margins at DIS and AAPL.

11:01 am (Hawaii). Opened a position in AAPL before the closing bell. Today's volume (16+ million shares) and the short-term base at 363+ provided an opportunity off the HOD (364.90). Not a perfect entry point (sub 362 was ideal) and shares could trade down to 360 (options expiry in two days). Rumor on Boy Genius Report about Verizon and Apple disappointed with iPhone 4 sales.

12:52 pm (Hawaii). Out of AAPL with a small loss (-2.83/sh). I saw shares dip excessively from 363 to 362 in a flash, then head lower and lower. Finally saw links on Twitter about Steve Jobs being spotted leaving Stanford Cancer Center. Instead of waiting around, I just stepped out of the trade and took the small loss. (Half of 1 percent of bankroll.) Figures that no matter how cautious I am, trying not to hold overnight most of the time, the slightest bit of negative news can send AAPL off a cliff. Soft landing, at least this time. Shares bounced off sub 360 and are now at 361+. Back to 100% cash. Best wishes to Mr. Jobs.

9:59 pm (Hawaii). Free time once again. Nice to see that Steve Jobs is meeting with a bunch of techies and a certain individual named Barack Obama tomorrow night for dinner. Looking back, I don't regret erring on the side of caution and getting out of my AAPL trade. That was no mistake. My concern about the public's perception of Jobs going to the doctor was the only factor, and I was right to get out in case AAPL went off the rails (far lower than 360+.

My position did not give me an edge of any kind. Longs who got in at 50 or 100 easily brushed the Enquirer and Daily News stories off like nothing. But those of us who are trading AAPL now are probably much more sensitive to unexpected news and price movement because our position is far more vulnerable. Therein lies the rub. I chased AAPL afterhours, and in the end, I paid the price. It was an odd set of circumstances, but the crux of it all is it was my own fault. The trade itself didn't cost me much, but the execution and price point were mediocre. There's much to learn from today's trade gone bad. It's not about the dollars. It's about discipline. I'm still learning.

The lack of discipline goes back to the opening bell, when AAPL sold off after gapping up. I had my entry point in mind, but did not follow through. Soon enough, AAPL ran from 361 to almost 365.

Two examples of a lack of discipline. To trade AAPL requires a modicum of faith sprinkled on solid discipine. I need both, really.

Go with this ... or that

... Or you could go with this. Or that.

Yep, I was in AAPL at 95. Chickened out and escaped at 106, only to watch it run to the mid-100s, then 200. Got back in at 214, saw it plummet to 190 or so. I was, however, fully confident and waited it out. Sold at 257. Then watched AAPL fly to 300.

Now, we have AAPL above resistance and flickering above at 346.41 after hours. Verizon ran out of new iPhones on pre-order yesterday. Not a surprise. They set things up that way like AT&T did. They'll have plenty of merchandise for the needy public come Feb. 10 at every Apple (and Wal-Mart) store.

So, with the "easy money" done, how to play AAPL. There are options. Not my thing. There's parking money in and forgetting about it until next year or decade. Not my thing. Wait — easy money is done? Kaput? Pau? I say yes because we have a real, life-threatening factor in Steve Jobs' health. (I think he'll beat this latest situation because he is a tough dude, but that's just my hunch.) But say I start a partial position right now above 346 and a rumor hits the street over the weekend about Mr. Jobs. There is, naturally, far more downside in the short term.

On the other hand, revenues and, more importantly, profit margins appear to be a lock for gargantuan advantage to Apple this year and next. Any kind of rumor that might dent AAPL in the short term will be and should be devoured by capitalists.

Premarket this morning was quite erratic, and when that huge-ass volume slammed AAPL in the minute before the bell, I was trippin' out. Sure enough, shares went all over the place in the first few minutes. 343.51 in the opening minute, then up to 345.90 five minutes later. Back down to 344.14 six minutes after that. 346.40 31 minutes after the opening bell. (By this point, I was 85% asleep, 5:01 am in Hawaii.) One last dip to 344.90, and mostly upward the rest of the day. The last minute before closing bell — biggest one-minute volume of the day.

Sentiment is, well, screaming optimism. All these numbers tell me that there are buying opportunities more often than not in AAPL. Not every day, but unless I was still long from 95 or 214, or even if I still had a buy-and-hold position, trading around it short term would still be useful if a system were properly executed. I can take a zero position in AAPL over the weekend. At best, a partial position.

Egypt couldn't rock this market, live internet streaming of grown people beaning sharp cuts of sidewalks and roadways at each other notwithstanding. Big Ben (not the QB) explained to the National Press Club (and planet earth) that he is not changing a darned thing and QE3 is a real possibility when QE2 runs out before July 1. So why sit on my ass and let AAPL run without me?

It's that fear of missing the ride, the envy, the regret trade that can be awfully dangerous. So managing risk is essential to peace of mind. What are the percentage odds of AAPL going up versus going down on Monday and all next week leading into the Verizon iPhone frenzy? I say AAPL is up on Monday by at least $2. (It's up 2.97 right now AH.) By next Friday, AAPL could close near its all-time high (357 intraday). Something negative could happen, of course, and send it spiraling back to 334 or even 326. But with sentiment as it is, it seems anything resembling a catalyst helps the stock now.

More than whether AAPL goes up, my question should be, what are the chances AAPL fluctuates as often and as much as it did today? AAPL was available below 344 in premarket today, and below 345 during the session. What more can Verizon or Apple say about pre-orders anyway? Maybe some iPad news could get out next week — unlikely. It's all about the Verizon iPhone euphoria.

It was June of last year when fourth generation iPhone hit stores.



Guy near the end of the report: "AT&T sucks. If they can get Verizon, that would be awesome. I can't even get it at my house!"

Chance of long-ass lines at Apple (and Wal-Mart) next Thursday (Feb. 10)? My guess is 99%.

So ... 75% chance AAPL rises Monday, 25% chance of weird badness. Yes, 25%. Remember, the news about Mr. Jobs' health condition was released on MLK day, just before another grand slam homer of an earnings report. If Apple were to release anything resembling negativity, next week might be the time. The difference in my percentage guesses is 50%. Am I willing to use 50% of my bankroll to trade AAPL short term? I am, but only with a stop around 339. (Maximum loss would be 1% of total bankroll.)

Going very long AAPL has worked before, but getting out with a small loss, then getting back in at a reduced price is also an effective method. (I sold at 340 last week, then re-entered at 335, sold at 343.) As I get more familiar with using cleaner risk management and better, balanced analysis of the stock (profit margins vs. Jobs' health vs. upcoming catalyst, etc.), I won't need to brainstorm and babble on. Getting to a fluid process of trading in and out will take time. Getting there is good.

My copy of iCon: Steve Jobs, the Greatest Second Act in the History of Business arrived in the mail yesterday. Some great reading already. When all else seems to flounder in this world, the story of Mr. Jobs and Apple is a morale booster. Doesn't make me like the stock more, not at 346. But a great life story nonetheless.

Update, 1:38 pm (Hawaii): Can't ignore the real possibility after today's run-up that there will be a scare next week that will take AAPL down some. Then it will race up as Verizon iPhone release day nears. Best not to hold overnight for short-term traders like me.

Heady Apple reading

From today's headlines:

Rob Enderle: Steve Jobs' Most Valuable Lesson for Apple
Philip Elmer-DeWitt: A fantastic use for Apple's cash
Michael Shulman: Eight Cult Stocks to Avoid in 2011
Seth Weintraub: Sub-$100 Android phone hits U.S. shores

No numbers, just armchair quarterbacking

Numbers are numbers, which I'll keep in a separate, updated post. Here, just some links to stories post-Steve Jobs-medical-leave-announcement and post-Apple-earnings.

Dennis Kneale: Apple's Risk: Corporate Paralysis, January 18, 2011
Mike Schuster: What Apple Investors Should Really Worry About, January 18, 2011
Matthew Lynley: How long can Apple's growth in enterprise stay this quiet, January 18, 2011

Perspective vs. Panic

Probably the best pieces out there today regarding Apple and the news of Steve Jobs' health.

TechCrunch: A Few Thoughts on Apple's 2011, Stock, Tim Cook and the Future
New York Times: A Deep Bench of Leadership at Apple
iBankCoin: Ghouls, Bears and Sea Urchins

Tuesday strategy?

In the past, I've often traded AAPL short term in conjunction with VXX as a hedge. Mostly APPL along with a sprinkling of VXX. It worked well one day last spring while I was on the road, in my hotel room, sitting in the dark while CNBC blared and shares of everything sank. However, I was buoyed by that hedge move with VXX, and my overall account was barely in the red thanks to that decision. By the end of the day, AAPL had rallied significantly and I'd already sold out of VXX for a fairly good recovery.

It was insane. It was almost ... fun? Well, I wouldn't say it was sheer pleasure, but it taught me something about the unpredictability of the market when it comes to short-term trading.

In this instance, though, I went long AAPL on Thursday without a safety net. When the market opens tomorrow morning, VXX will be up big. (So will AAPL puts, but I'm not into options.) AAPL will be down big. AAPL will eventually recover, whether it takes a day, a week, a month or longer. But I do think a hedge should've been in place, and for overlooking the worst-case scenario, I will have to pay the price whether by selling at a loss or digesting a paper loss for "X" amount of time.

Tomorrow might still offer a profitable opportunity through VXX or puts, if that's your thing. How long will AAPL go down and stay there ... that's a question nobody can answer right now. I'm leaning toward playing some VXX.

Get Well, Steve Jobs

I've been offline for all of Sunday night, so this news is both fresh and stunning ... and saddening. I hope Steve Jobs' health returns, whatever he may be facing right now.

As for my timing in opening a position in AAPL two sessions ago, well, that modest paper profit just went poof for the time being. Brian Kelly was the first I saw to break the news of Mr. Jobs, noting also that Apple shares in Germany are down 2% so far today.

More details here: Steve Jobs goes on medical leave of absence.

Not sure what my strategy will be when the US market opens on Tuesday morning, but if I had to guess ... sharp decline in premarket and the first 20 minutes of the regular session, followed by bargain hunting. If our market follows what's happened in Germany today, AAPL will be down $7 to 341 or so in no time. It could easily be much more severe, and I'm not inclined to wait this out since I was planning to get out before the earnings report anyway. But any chance of shares increasing before earnings are announced Tuesday after the bell ... poof.

There were all kinds of possibilities that could take Apple and its stock down in the long term, but the only real certainty of that happening always centered around Jobs' health. Apple's dependence on him for creativity and discipline is extreme, more so than the old Chicago Bulls and Michael Jordan. All longs can do is hope the company has something positive to announce well before earnings, like maybe on Tuesday morning before the bell.

Whatever the case, it's been quite a run for patient longs.

Update, 4:32 a.m. (Hawaii time): Zerohedge reporting that Apple shares in Germany now down 8%. If that carries over to AAPL shares tomorrow morning, that's a drop of $27 from Friday's close of 348. And if that happens, it will not have mattered if AAPL longs had stop-loss orders or not. Pain around the corner, but that's the risk. Cut losses and get out, keep risk to no more than 2% max of your portfolio.

Well, finally

It took Apple several days to come up with a solution, but they finally did it today. Free cases will correct the problem with the iPhone 4 antenna. Had Apple continued to dilly-dally on this issue, shares probably would've caved in like the rest of the market today, which is down almost 3% on negative consumer data. AAPL is down just 0.5% to 250.17.

This should end any and all rumors about an iPhone recall, which were drummed up by those sneaky hedge fund sharks. They got their shares as low as 243, so they'll be dancing up a storm this weekend. AAPL reports on July 20, and barring global catastrophe, shares will be higher than 243. Just a wild guess.

Not owning an iPhone, I rely on Mr. MG, who is light years ahead of me when it comes to tech toys. Mr. MG's take?

1. The antenna problem is severely exaggerated. He loves the new iPhone and has no issues with it. Holding it a certain way is just common sense, he adds.

2. If/when Apple adds Verizon as a provider, Mr. MG will stick with his AT&T plan. Is he insane? No.

"When you add 20 million people to the 80 million already using Verizon, they're bringing their iPads and iPhones. They're going to clog things up at Verizon, using up major bandwidth. Then AT&T's lines will be a lot better."

In his usual, contrary way, Mr. MG is right, or will be, it seems.

As for that Steve Jobs guy, he says the rate of refunds to unsatisfied iPhone 4 buyers is just 1.7%, or less than a third the rate of the iPhone 3. He also adds that the iPhone 4 does drop more calls, according to new data. The increase is less than 1 per 100 calls.

Russian play?

Russia getting play on Fast Money as its president (Medvedev) visits Silicon Valley en route to the G20 conference. The country wants to diversify rather than be so dependent on exporting energy. They're probably years away from becoming a tech player, but RSX, the Russia ETF, might be worth a look short term. Or not.


Here's a cool story about Medvedev meeting Steve Jobs and receiving an iPhone 4. He visited Apple and Twitter headquarters. He also says Russian tech hub-in-waiting Skolkovo isn't trying to become Silicon Valley.

President Dmitry Medvedev does not think Skolkovo should be an exact replica of Silicon Valley. The idea is to draw on U.S. experience to create an attractive environment for companies to develop high-tech innovations. “No one is going to simply copy Silicon Valley, it is impossible," he said at a meeting with Russians working in California.

Apple propaganda

Enough bad news about Apple. Here's some Apple goodies.

Video: Steve Jobs' keynote address
4-minute, 47-second version
60-second version
iPhone 4: Analysts weigh in
Morgan Stanley: New target is $332
Apple's Face Time video
Apple's design video
Adobe tries to upstage Steve Jobs

Another Apple critic

A techie's view of Good Apple and Bad Apple: Jason Calacanis writes about his infatuation with Apple products and subsequent antipathy for Apple's closed system. 

Steve Jobs is on the cusp of devolving from the visionary radical we all love to a sad, old hypocrite and control freak--a sellout of epic proportions.*

I see Calacanis' points. They're valid, but his perspective isn't common. Most Apple customers aren't overly concerned about his issues. I don't even own an iPod or iPhone and have no plans to. Sales are going through the roof and global reach is just beginning. 


His case is about philosophy and free exchange. Apple is about protecting its collective property. I blame neither. It is what it is, and Calacanis' perspective is philosophical, not about investing and trading AAPL. 

A mighty Apple is perishable

If there ever was a stock and company that could be regarded on par with a mythological creature, it would be Apple. For all its wonder and allure, it also has dominant numbers across the board and a bottom line matched by no other. But AAPL is vulnerable again. We've seen it go from 200 to 78 before. Though the company is arguably far stronger now that it was in March of 2009, there's also an argument to be made that Apple has filled much of the gap that comes with new products. There's simply less room to grow now. It's the Law of Large Numbers.

That's why I can't help but think AAPL touches 150 before it touches 350 or 330 or 325, as some analysts have predicted. The selloff today after Steve Jobs unveiled the new iPhone G4 isn't quite over yet. AAPL could be in a shitstorm for a day or two more. Then, depending on the market, it could start moving back up again. That wouldn't shock me or a lot of other fans.

But if the market really goes on to make a huge move, it'll be down first. A lot of bulls will be patiently waiting for a rock-bottom entry point rather than deal with the lunacy of politics and stupidity on Planet Earth. Though signals indicated yesterday and today that the market is oversold, nothing stuck for long, so I'm glad to be out completely, sitting with my barrel full of dry powder. In 10 hours, I'll be back at it again, waiting for opportunity and walking away in almost every instance.

Big picture!