Tag Archives: AAPL

I Bubble Bubble

After catapulting to an eye-watering all-time high last week with catalysts coming from mergers and component companies’ positive drug test results, the IBB biotech index suffered its biggest loss in months, dropping 4.1% and dragging the Nasdaq down to a 118 point plunge, the biggest one in almost a year just after it finally breached the 5,000 level for the first time in 15 years since the tech bubble burst. Semiconductors also got slammed and were the other contributing factor to the Nasdaq nosedive. BIS has been an excellent trader to capitalize on this biotech correction, having bounced off an all time low of $29.18 last week. I managed to pick this up at $30.40, sold at $32.00 and got back in at $31.55. I scaled out again today at $34.55 and $34.10. It closed strongly but I am expecting a bounce in the IBB before we see whether the trend has actually reversed or if this is just a correction.

Interestingly, steels (AKS, X, STLD) bucked the trend (or at least outperformed the indexes) and continued to bounce after getting hit by lower guidance last week.

And just when you thought crude oil was going to have a quiet day after barely a peep on larger than forecast inventories, it staged a huge rally right before the final hour of pit trading at 13:20ET. GASL was a major beneficiary of this turnaround, up 8.8% to hit a multi-week high of $3.21. After hours crude leaped another 5.4% to $51.91 on news of Saudia Arabia launching airstrikes in Yemen.

FB faltered after a 7 day winning streak that tacked on 10%, briefly dropping below $83 before recovering slightly as Mark Zuckerberg kicked off the F8 2-day developer conference. There has been a lot of bullish call buying in this name in recent weeks and we will see if that continues. I closed some puts at a tidy profit this morning but sold far too early it seems, and started nibbling on some calls.

And it seems like every day is Friday for AAPL these days, as it suffered a massive $3.31 gutting on seemingly no news. Unfazed, some bullish posters on StockTwits continue to call for $130+ within a few days. I guess if you consider a +$0.30 bump in after-hours ‘panic buying’ and ‘shorts getting annihilated’, then anything in your mind is possible…#hopespringseternal. Also took profits on puts here and opened some calls, so let’s see if we get a bounce off these levels.

As always, trade well and stay disciplined!

Whipsawing Lower

PCLN hit a milestone today, although a bearish one, as it plunged through the $1,000 level for the first time since October 2013. January 1000 monthly put options expiring on the 17th (technically tomorrow) skyrocketed from a low of $0.55 to a high of $10.60 before closing at $8.70, representing a 625% return overnight! Many other momentum names have fallen through key levels this week, including AMZN, AAPL, BABA, GPRO, NFLX, and TSLA.

Even ‘Turnaround Tuesday’ could not save the broader indices as an initial rally was quickly sold off, with the S&P 500 down again today for the fifth straight day, closing 52 points lower since last Friday at 1,992. The 30-year yield has also been cratering all week as evidenced by fresh highs in TLT. And the VIX has been hovering above the 20 level for the 3rd day in a row.

There were a couple of monster moves in commodities, notably natural gas, which surged almost 10% yesterday after already being up 5% the previous day off year lows. After this morning’s EIA inventory report it continued to rally briefly before giving back some of the week’s gains. The other big gainer was gold, up over $30 this morning as it breached the $1,250 level, reaching a high of $1,267 before settling just below $1,260. The catalyst for this appeared to be the Swiss National Bank’s decision to unpeg the Swiss Franc from the Euro, causing the franc to jump 30% vs. the Euro and 25% vs. the USD before paring some gains. FXF would be the ETF vehicle to trade this if you are so inclined. And of course, what week would be complete without volatility in oil? WTI crude rallied briefly above $51 before settling sharply lower at $46 today. For the strong of stomach DWTI has been an excellent ‘buy the dip’ tool to ‘sell the rip’ off any spikes in the commodity at this point, hitting a low of $144.81 this morning before closing near the HOD of $174.55.

With monthly options expiration tomorrow expect another volatile day as Goldman Sachs caps off a week of financials reporting disappointing results with BAC, C, JPM and WFC having all taken a beating. As always, trade well and stay disciplined!

The first loss is the BEST loss

If I took my losses as quickly as I did my profits, I’d be laughing all the way to the bank… Unfortunately, the psychology of fear and greed always plays a pivotal role in trading, and when you’re looking at a losing position, the fear of missing a rally or higher prices after cutting a loss is usually what keeps me in that little extra bit longer- you’ve probably been there before- ‘just wait until the 11:30am post-Europe close ramp’, ‘just wait till the 3pm ‘power hour’,’ ‘just 5 more minutes to the half hour mark in this 15 minute downtrend… and those few minutes until the next ‘checkpoint’ become an excruciating eternity as I see my position dwindle and the loss swell larger. With my Hindsight Glasses on, I can see that I should have closed my long SPY call position early yesterday on any spike opportunity that we got. Instead, I chose to wait it out, and even added a small average down on what looked like a stabilizing base and rally mid-morning. Unfortunately, as you all know, the market plummeted in the last hour, ending on new lows, making it the worst performing week of 2014 for the Dow (another minus three hundy day!) and S&P 500. And just a few days ago we were about to breach new all-time highs just shy of Dow 18,000!  My hesitation was rewarded with a LOD (low of the day) print in my position, closing it out at the last minute right before 4:15pm in after hours, when the SPY printed even lower lows and the VIX spiked higher (I was amused by an AAPL defender saying “VIX isn’t spiking, which means market sell off is aggregated to some big companies. Apple way oversold.” So 11 to 21 in a week is not spiking eh? Uh huh. Lots of levels of denial in that statement…). Fortunately I had taken gains earlier in the day on my WAG and GPRO calls, so I basically ended slightly negative to flat. I am reminded again of the very useful adage, “sell when you can, not when you have to”.  Being put to a decision during the last 5 minutes of trade when your position is at the day lows is not a feeling that I ever want to repeat having.

Once again oil collapsed, hitting fresh multi-year lows to close below $58/barrel, which is a stunning 22% nosedive from just the November 27 OPEC meeting, let alone from $100+ in the summer.

It has been a very volatile and whipsaw-y week, to say the least. I loaded up some SPY puts after seeing some bearish signals on Monday, and closed them on Tuesday for a tidy profit after the market tanked in the morning before bouncing back strongly. I attempted to keep some short exposure in the market by getting back in some December 205 puts at $1.94, having scaled out of them earlier near $3, but was stopped near the day lows as the market continued to bounce. Too bad, as these puts steadily held above $3-4 over the next few days as the market continued its decline, and closed at the week’s high of $5.75! S&P 500 futures closed below 2,000 at 1,998 so this will make for an interesting week with the FOMC meeting on Tuesday and Wednesday, with an announcement on Wednesday Dec. 17 at 2pm eastern.

So, my mantra from now on is “The first loss is the best loss. Take the first before it gets worse!!!”  Trade well, and stay disciplined my friends.

AAPL gunning for $120, Turkey and shopping madness around the corner

After a breathtaking month-long run in AAPL which has seen it gain over $23 ($161 pre-split!) since the October 15 low of $95.18, the stock is now poised to take out the $120 level, having already hit a high of $119.75 this morning and surpassing the $700 BILLION level in market cap, the first time any company has ever reached that size. Sentiment on StockTwits has reached euphoric levels, with some users commenting “$125 by end of this week possible!”, “I’m buying a Lambo if this hits $125!”, and “Looks so cheap now on its way to $150!”. Of course, a flurry of well-timed upgrades by analysts has helped as well. Before you get caught up and chase the feel-good rally, note that the RSI is now at a blistering 87 (an RSI over 70 is considered overbought territory), and the charts show the prices peeking over the upper Bollinger Band, with stochastics also flashing overbought levels. This rally may also be spurred by anticipation of strong Black Friday sales after Thanksgiving this week, as well as Cyber Monday, but after that there may well be a consolidation or pullback. Of course, there’s always the beginning of December and the ‘Santa Claus’ rally to take into consideration, but the markets have continued to power to new all-time highs, helped also by China’s central bank cutting interest rates for the first time in two years, as well as ECB’s Mario Draghi commenting on more government bond-buying.

In commodities, oil is hitting lows again today, ahead of the OPEC meeting on November 27 (Thanksgiving- coincidence?). Gold has been holding a tight range just around the $1,200 level, and the next major news event the market seems to be anticipating is the Swiss referendum on Sunday, which may provide some impetus for the next move. Natural gas has also been extremely volatile, spiking over 5% last Wednesday after reports of more cold weather, with a net draw of 17bcf shown on Thursday’s EIA inventory report, but plunged back down on Friday and yesterday after new moderating weather reports came in and the futures contracts rolled down to January.  This has spurred heated debate in traders of UGAZ and DGAZ alike, both of which have seen tremendous daily swings of 12%+, and it looks like it won’t be settled anytime soon.

 

Thar’s GOLD in them thar hills!

What appeared at first to be another rout in gold on Friday turned into a monster bounce rally, after prices hit a low of $1,146 before roaring all the way back up to $1,192, just shy of the psychologically important $1,200 level. This lit a fire under the still beaten-down and almost forgotten miners index, GDX, which clocked a massive +6% gain and closed above the recent $19 resistance level. The triple-leveraged NUGT ETF added 17.4% to close at $13.90. Could this be the start of a recovery after falling off the cliff last month upon the official announcement of the end of QE? The weakness in the US dollar also helped, as it took a breather after a strong rally, which also helped oil prices bounce.

This has been an impressive week for tech names, with AAPL hitting new all time highs of $114.19, just a hair’s breadth away from the pre-split $800 level. YHOO also powered to new highs, as did BABA, reaching exactly $120 before pulling back five bucks and change. Interestingly, BBRY also broke through $12 on Thursday, a level not seen since August 2013, as CEO John Chen announced new software and gave a tantalizing glimpse of his plans for potential new partnerships in China with Lenovo and Xiaomi, as well as confirming a deal with Samsung during their Investor Day event. Unfortunately any bets on a strong finish to the week proved, well, fruitless, as it gave back all of Thursday’s gains and more. Granted, the stock had already rallied the entire week so perhaps this was the pause that refreshes.

FOMC minutes are out this Wednesday at 2pm ET, as well as some jobs and housing numbers the rest of the week. Full US economic calendar can be found here.