Fuzzy Friday

AAPL opened to the upside, then cratered to no surprise. A pullback has been due for some time, and that last two sessions were opportunity to get out above 343. The drop after the open was drastic, but most longs aren't going to blink at a 1% decline after a four-fold gain in two years.

VXX hasn't moved much, even on AAPL's bleahh days, until today. It was up to 30.12 when I first checked, and later reached an intraday high of 30.50. That's what video of riots in Egypt will do. Last time I remember VXX moving was last May or so when video of Greek riots infected the market with fear. Making money off chaos — what a sick way to make money. But what a relief, too. It was far better to hedge with VXX rather than just accept intraday plunges in AAPL at the time.

Unless things get worse in Egypt, I don't expect to dip into VXX. The economic climate isn't ragged enough right now, and POMO/QE2/Obamanomics is still at the forefront. AAPL back over 340 as I type away.

8:46 am (Hawaii time). Down goes AAPL! Down goes BIDU! Down goes Ford! Ow. Ow. Owwww.

Being 100% cash gives me the luxury of sleeping through the session, waking up at a decent hour here in the islands with the perfect breeze and warmth (73 degrees). I work my ass off and I enjoy it, so much so that vacation is not a big deal to me. After all, I live in paradise when it comes to weather.

As for the market, VXX has boomed since I saw it at 30.12 early on today. Now at 31.84, off its high of 32.50. That's a gain of 7.5%. Can't last, right? Well, VXX doesn't always move like a normal stock, being the alien oddity that it is. I mean, someone could do a study and find that the rise and fall of VXX is entirely dependent on CNBC video footage of carnage (Greek or Egyptian riots) or lack thereof.

AAPL, meanwhile, is struggling to stay above 336. I still believe 332 is the next floor if shares don't hold here, and then 326 as support. If it falls below 326, then run for the hills. I don't see that happening, but just remember, no matter how incredibly powerful the numbers are, the frailty of the human mind is constant. Traders sent AAPL from 200 to 80 just a few years ago. Avoiding the treacherous downturns is key.

If you own FAZ, GLD, QID or even NFLX, hat's off to you. FAZ is up 4% (not touching that piece of...) and QID is up 4.8%. GLD is up 2%. NFLX is staying green (+0.24%). I'm not messing with that either.

Right now, more people are interested in life in Cairo than ever before. With the cellphone/media block lifted, there will be more and more footage to watch. I didn't think much of that early this morning as I watched AAPL and VXX half-asleep. But it behooves me to take a closer look at CNBC, CNN and every other media outlet that may be having a slow news day. If anything, a tiny toe in the VXX water might be worthwhile.

Things ain't getting better in Egypt instantly.

11:01 am (Hawaii time). Took a teeny nibble of VXX at 32.11 before the closing bell. Sure, I could've done the same thing early in the day when I saw it at 30.12, but I try to avoid trading decisions while I'm still in bed, groggy and barely conscious. Why not a bigger position? VXX is like few other stocks, being a steroid-infested ETF. It can change price overnight (or weekend) without any logical reason. Things could still be combustible on the streets of Cairo and VXX could open much lower on Monday. I'm guessing things aren't entirely resolved by then. It seems Obama will keep his distance; his warnings went unheeded, and he is likely in no mood to babysit the Egyptian government. Thirteen dead, 1,000 injured. That's no Greece. So, things may stay chaotic and VXX will possibly rise.

The last time VXX blossomed like a cactus flower, it was May of 2010 and those lazy Greeks were starting a mess in the streets of Athens. Even burned down a bank. What did VXX do? It nearly doubled (from 74 to 144) over the course of one month. I realize we don't have the economic crisis barfing all over us anymore, but the reality is VXX is going up.

VXX was at 29 early this morning. Maybe the run is done after a 9% gain (at this point in afterhours trading). If VXX collapses somehow and I hit my pain threshold (27), fine. But if it goes anywhere near a double, I make a few bucks because of human psychology (groupthink, fear, blahblahblah) and technology (news video of burning cars and crazy, pissed-off young men). This inflation crisis has been brewing for years now. People want their bread cheap. I would too.

My position and risk is miniscule, so why bother, right? I think it's okay now and then to take on a near-zero-risk trade just for fun, to keep the hairs on my neck prone. At least until AAPL settles down, finds a new base and starts climbing toward its rightful place as the greatest company in market cap on Earth.

Why not bet big on world chaos? I know there are a zillion traders who do this, many who bet big early this morning and were rewarded with 6, 7, 8% gains in mere hours. More power to them. After all, how much risk is there when simmering heat erupts like a raging volcano before our eyes. It could easily get worse. This stuff doesn't get cured overnight — rampant unemployment, high illiteracy rate, almost zero freedom of speech — so it was, in the minds of many, a calculated, low-risk trade on VXX this morning. Not just VXX, but oil and gas, gold and silver. Maybe I'll join these astute risk-takers one day.

Until then, VXX is up to 32.22 afterhours and my interest remains piqued.

first photo: Associated Press
second photo: Reuters