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.