Bullish Cross Live

1. Long GLD x 835 @ $161.51 in the BC long-term portfolio

1. The Bullish Cross Apple Model Portfolio
See portfolio.
Enter Portfolio Here

2. The Bullish Cross SPY Model Portfolio
1. Short SPY @ $149.65 x 10,000 Shares
Enter Portfolio Here

3. The Bullish Cross Long-Term Portfolio
Please see the portfolio.
Enter Portfolio Here

4. The Apple Common Stock Model Portfolio
1. Apple Long-Term Position: 1,175 shares x $451.71 = $530,759.25
2. Apple Trading Position: None.
Cash = $588,326.90

5. The BC 3-Year Recovery Plan Model Portfolio
1. Apple January  2014 $550 - $600 Call-Spread at $18.85 x 53 contracts.
Cash = $95.00

6. The BC 2-Year Recovery Plan Model Portfolio
1. Apple January 2014 $600 - $700 Call-Spread at $24.15 x 40 contracts
Cash = $3,400.00

7. The BC 1-Year Recovery Plan Model Portfolio #1
1. Apple April 2013 $580 - $600 Call-Spread at $4.65 x 200 contracts
Cash = $7,000.00

8. The BC 1-Year Recovery Plan Model Portfolio #2
1. Apple July 2013 $600 - $620 Call-Spread at $4.55 x 210 Contracts
Cash = $4,450.00

9. The BC 1-Year Recovery Plan Model Portfolio #3
1. Apple January 2014 $900 - $1000 Call-Spread @ $2.92 x 342 Contracts
Cash = $136.00
Positions "On Watch" are those positions which we are considering. It doesn't mean we are taking these positions for sure. We are just entertaining the idea.

1. The Bullish Cross Apple Model Portfolio

2. The Bullish Cross SPY Model Portfolio

3. The Bullish Cross Long-Term Portfolio

4. The Apple Common Stock Model Portfolio
THE LIVE BLOG 9:30 AM - 4:00 PM

9:10 AM -- as I'm sure many of you are aware by now, NFP days most often reverse the morning gap throughout the day. If you get a big gap-down on the employment report, that is typically reversed throughout the day as the market melts up higher from the open. If you get a big gap-up, you get the opposite effect. It is sold into throughout the day. Also, NFP days have a tendency to be trend reversing. We've seen multiple cases where the NFP day marked a near-term top (and bottom) in the markets. A big indication of that is how the market trades off of the opening highs. If we get a reversal today, then that will be very indicative especially given how the weekly chart will look on such a reversal.

9:52 AM -- even though we're only 20 minutes into trading and not much can really be concluded about the session even during the first hour of trading, there are a few things and observations I would like to make. First, that typically what you see on a NFP day is an all day long excruciatingly slow grind against the trend. It takes all day. So on a big gap down, the SPY will slowly grind up to close well off the lows (open). On a big gap up like we have today, you get a slow and steady grind down. It's not a "fall off the cliff" type of reversal. It's an all day slow grind. So we could be trading between $150.65 and $150.30 for like 3-hours today. A reversal off the highs today along with the trading in the preceding sessions would be really bearish if things play out that way.

Now with Apple, today's reversal off the open so far shouldn't surprise anyone. As we did explain yesterday that three back-to-back doji are usually a sign of trouble. I even stated that you should prepare for Apple to be down like $8.00 today. It's only down about $2.00. Which isn't terrible. But we could be setting up for a fourth doji today. We will see how the sessions goes.

Finally, I would like to also point out that with the SPY you have to be extremely patient. These things take time to unfold. Sometimes weeks. Generally speaking, you could even make a case to go short here and hold it for two months. Because most likely between now and then -- regardless of whether the SPY pushes higher -- the next correction is likely to go down to at the very least $140.00. So that's a $10.00 drop from where we are right now. Even if the SPY were to climb to $154 from here, a case would could still be made to be short at this level.

In fact, as we explained before, in the past, if you had shorted at this point in the rally, you would have made like +5 to +20 in almost every case since the 2009 lows. What I mean by "at this point" is after the SPY has moved up $15+ points off the lows and is now sitting at a 75 RSI on the 14-day chart.

This is why with options I would only put on trades that have no or very limited time-value impact with a high delta. Something out between 4-8 months depending on the trade. Maybe even leaps. Those are not subject to much theta decay. So you could ride a trade for a month, get the positioning right, capitalize on the $7-$8 of downside and have a profitable trade.

The same goes for the opposite direction. When the $NYMO hits -80 to -100, you are almost always going to have a big multi-month gainer on the SPY if you're patient to buy, hold through the last big of the drawdown and catch the move up.

For example, you could have gotten long the SPY in November when the $NYMO hit -100 and you would have bought the SPY near $135. You could have held it through this entire rally and sold at $150. That's a $15.00 move in the SPY in two months. On a leveraged trade, that would likely be something like 40% or greater.

10:30 AM -- after an hour of trading we've seen two back to back reversal intraday already. I think psychologically the market wants to test its highs before seeing a meaningful pull-back or at least test 14,000 on the Dow which we got today. Again, it's still extremely early in the trading session and we've seen all day reversals before. So the SPY/Dow/NASDAQ could all reverse course today and close near the lows. We will probably have a sense of what type of NFP day this is around mid-session.

Now with Apple, as we explained yesterday and the day before that, Apple is probably going to at the bare minimum test its lows. Mostly because the selling off of earnings was the heaviest we have seen in this correction. Normally, you get at least a re-test if not a lower low after a rebound. So the most basic bottoming pattern would go something like this:

Notice there's no way to know whether Apple will actually double-bottom and then breakout on a w-recovery. What this post illustrates is that at a bare minimum, for Apple to bottom, it will at least need to re-test and hold its lows. It may lose those lows and make new lows. At which point it will have to re-test those lows, form a double-bottom or IHS and then it can move higher. It's very rare to see a v-recovery after such a beating. While Apple has seen lots of v-recoveries off of lots of corrections, this correction is now way too large. It's more of a crash. The stock is down nearly 40% from peak to trough. That's a crash. With crashes, bottoms are almost always very complex and takes weeks to months to unfold. So your expectations should be aligned with this.

Another way to view this is to assume Apple needs to form a double-bottom at the very least unless it breaks its highs. So for example, if Apple were to push through $465 and beginning filling its gap, then that would suggest Apple wouldn't really need to re-test its lows. That a v-recovery could be under way. And if not a v-recovery, a large bear-market rally. But short of that happening, you assume that Apple will re-test its lows.

11:50 AM -- we're almost at mid-session and it appears pretty clear now that the market isn't going to go with the usual NFP day trend. It could also be the result of fund flows being that today is the first of the month. So some of this rally could be due more to that than reaction to the employment report. Still, the SPY is now pushing further into overbought territory and we still feel that most of this will be reversed at some point in the next few weeks. It does feel as if the market is gravitating towards testing its all-time highs before seeing any serious correction of any kind. You have to remember that this rally has been going on since mid-November. So it is a little more than two and a half months in the making. From a pure time perspective, it does put us a lot closer to the end than the beginning of an S&P rally.

On a completely unrelated note, Google (GOOG) is testing its highs today which invalidates any potential short position until and unless Google loses the $700 level. It may potentially form a double-top here but with such a strong up day I see that as unlikely for now.

I still believe at this point the best place to be in the BC Long-Term portfolio is mostly cash. Once we see a topping pattern on the S&P, we will look to short a host of different names. But for now, we're mostly going to remain in cash until this all plays out.

12:48 PM -- the SPY is now hitting the upper end of the trend. I think at this point there is a clearly established upper trend-line and lower trend-line. Two signs of a top would be if the SPY either breaks above the upper trend-line thus overshooting; or if the SPY breaks below the lower trend-line and re-tests that line on a rebound. See below:

2:00 PM -- Apple has recovered quite a bit off the lows today adding a fourth session of sideways trading. Heading into the weekend if Apple can push higher, then things became more neutral. The reason for that is quite simple. When Apple was trading below $550 today that should have lead to a breakdown given the three prior doji. But the reversal today suggests that the bears might not be as strong here as might have been suggested by the previous three sessions. So it makes the trend more neutral. Not necessarily bullish or bearish anymore:

With the SPY, we still believe that the market is going to end up giving up most of the gains. At the very least, we still feel a pull-back down to the $145 level makes the most sense. This trade is going to require a ton of patience. Again, as we explained last week and throughout this week, not every trade will unfold in a few sessions. Sometimes these trades take a lot longer to play out. Right now, the SPY continues to push against the upper trend-line and should see a retracement back to the lower trend-line in the near-term and then a correction an the intermediate-term:

3:02 PM -- as we head into the last hour of trading, the SPY has pulled back just a little off its highs which put some pressure on Apple. For Apple to be more neutral, it's going to need to move up a few more points by the close of trading. This will be the fifth weekly close in the green in a row for the S&P 500. We're probably due for some sort of a weekly close in the red soon. Also, these highs were done on some negative divergence. So that could be indicative of a top sitting around the corner:

Let me reiterate that I don't think anything is worth trading right now until it becomes clear that the trend has shifted on the broader market which will set-up a wide range of short plays.

Position Traded: LONG GLD x 835 Shares @ $161.51
3:40 PM -- I know this may seem out of left field as we haven't been discussing it, but we're taking an inflation hedge long position in the GLD in the BC long-term portfolio. It constitutes a 10% position in the GLD. The GLD chart looks pretty damn bullish. We will sell the position and probably go short GLD if it were to lose $145.00. But for now, it looks very bullish for the intermediate-term. We feel it can eventually take out its highs at $185:

This is an intermediate-term position which we will be holding for a while.

4:02 PM -- so Apple wasn't able to regain any strength after attempting to hold in the green earlier today. This makes it Apple's 3rd down day in a row. Even though Apple has traded sideways to down the last few days, it still ended up the week just about $14.00. The SPY also traded essentially sideways all week until today. Which is largely the result of (1) positive response to the jobs report; (2) fund flows for the beginning of the month and (3) the market psychologically wanting to test its highs. The SPY has pulled back to some degree from the upper trend-line however, and we expect that the SPY will see at least the first part of its pull-back relatively soon:

173 responses to “Bullish Cross Live

  1. A back bar set up day for SPY unless it just gets stupid crazy

  2. wtf – anybody else having problems getting their java-based trading platform to run today on mac os? supposedly apple disabled java remotely last night. my platform won’t run today. argh.

    • yup, saw that java got disabled because of security problem.

      • fail by apple by not communicating how to re-enable if you want to. or any new information on their support page.

        • Well google helps! Just google apple java and the first article that pops up. This is the second time it’s been blocked due to serious security vulnerabilities that Oracle (who owns Java) has not remedies yet. Came after a warning from (amazingly) Homeland Security warning all users to disable.

          “Apple has once again effectively blacklisted Java 7 web plug-ins on Macs by enforcing a minimum version for the software — a version that has yet to be released by Oracle.

          The new blacklisting of Java 7 update 11 — the latest version available — makes it the second time in a one-month period that Apple has used the anti-malware system built into OS X to remotely block the software. However, it follows reports last Sunday that, despite Oracle’s efforts to harden Java security, the latest version allows unsigned code to be executed.

          When Apple instituted the first Java block in January the move was considered unusual, in part because Apple has typically used its Xprotect to block malware such as the widespread Flashback Trojan for Macs in 2011. However the serious risks posed by zero-day vulnerabilities in SE Java 7 update 10 prompted Apple to apply Xprotect to it.

          How to disable Java in your browser on Windows, Mac

          Amid a serious security flaw in the latest version of Java 7, where even the U.S. Department of Homeland Security has warned users to disable the plug-in, here’s how you do it.
          In January, Apple moved to fend off attacks exploiting those vulnerabilities by adding “build 19” of Java 7 update 10, denoted by “1.7.0_10-b19”, to its “Xprotect.plist” blacklist. The latest build at the time was 1.7.0_10-b18, meaning that Java 7 web plug-ins were effectively blacklisted until Oracle released a version that superseded it.
          That version came in mid-January when Oracle released Java 7 update 11, which satisfied Apple’s minimum requirements under Xprotect. It didn’t fix all the vulnerabilities, though, according to researchers at security firm Immunity.

          The US Department of Homeland Security also urged internet users to disable Java web plug-ins despite the latest update.

          How to disable Java in your browser on Windows, Mac

          Hope that helps!

          • yes – i know how to google. the search results only tell you that apple disabled to java. nowhere have i found anything that says how to re-enable it or run specific java programs.

          • okay – just talked to IB. for anyone in the same boat, it’s due to apple disabling “java web start”. you can get around it by installing the standalone version of TWS (or whatever java-based platform you might be on).

          • I wasn’t implying you didn’t, just noticing that google was helpful where apple wasn’t…did come across instructions both on how to remove and also to reinstall. Glad it’s all worked out!

    • Running OptionsHouse, Java Aplet works ok

    • Yes. Ameritrade not working. Fortunately I have AT as a back up monitoring brokerage. I dont trade with them, I go with Interactive Brokers, so Java does not matter to your Mac platform, and they have apps for iOS.

      I use margin, so Ameritrade is simply stupid to use. You decision … pay 1.5% interest at Interactive Brokers, or pay like 7% at Ameritrade.

  3. definitely getting the reversal on the open…

  4. GOOG keeps it’s +$6. AAPL reversed it’s +$2 immediately. Only an idiot…

  5. Zaky, while the market is doing its thing and you have some time – when are you going to bang out to the summary of what went wrong and why everyone imploded their accounts based on your recds?

  6. whats with apple today?

  7. Jonathan Theodore

    today may not be ‘bad’ for apple objectively, but it will further erode what chance or value is left in the recovery spreads

  8. Andy – when will the SPY model start with options?

  9. why does anyone want an explanation about how ANDY absolutely bombed and ruin our wealth on AAPL? I sure dont want to hear about it.. I just want to know how i can get some of my money back so maybe i can afford to put my kids thru college…

    • anyone could be wrong. i want an explanation of his positioning after being lectured about positioning ad nauseum. even after we did not hedge at the highs i want to know when he knew it might not be playing out like he imagined and why he did not hedge at that point. looking back, when we were asked to write to apple invester relations it is clear now that total meltdown was possible in andy’s mind.

      • Jonathan Theodore

        When a model portfolio central to this service blows up in spectacular fashion, we are definitely owed some kind of an explanation – especially when one has been promised – beyond just ‘apple began a new trend’. Clearly something went wrong with risk management for a loss on this scale and that needs to be openly and honestly looked at. I say this as someone who doesn’t want to bash andy but wants to learn from the experience for the future

    • I’m personally not focused on an explanation (although interested in one) as much as hearing a refined methodology so as to not repeat past mistakes. I would like a constructive overview from AZ, void of a belittling allocation discussion which would only serve to add insult to injury. Everyone knows what over allocation is, just about every poster lamenting on the Apple debacle rightly pointed towards their own mistakes in over allocation. Allocation isn’ relative to the investment thesis which is what needs to be discussed, and the ways the thesis was executed. So what will be done differently? Thats the discussion that needs to happen. A healthy dose of humility wouldn’t hurt.

    • It was not just Andy. Think.

      All these folks were of the belief that AAPL was headed yet higher over their September highs …
      – Nick Nansen
      – Every pro analyst following Apple save about 2
      – Almost every independent analyst following Apple
      – Jason Schwarz (Economic Timing newsletter)
      – Of course, Andy
      – Robert Leitao at Braeburn Group and Eventide
      – Reitmeister Alert at Zacks

      The list goes on and on and on.

      Now mind you, these are smart, educated, literate, analytical folks who exhaustivley followed Apple over a long period of time, and many with big time trading experience and also who saw the stock price fall of Microsoft, Nokia, RIM, Ericsson and many, many others in the tech field.

      My takeaway is that no one – and I mean no one – can see what is coming. You make only your best guest. You try to hedge by following and reading tens and tens of people who you believe are smart, and then you validate or throw out your ideas and bets.

      Andy and Apple was a ‘push all of the chips on one roll of the dice’, but a very educated guess backed by lots and lots of historic date and behavior, analyst reports, channel checks, retail checks, mathematical modelings, and on and on and on.

      None of it … and I mean none of it … worked out.

      • Sorry for all the misspellings. A bit careless today.

      • thats not the issue. risk management and positioning is the issue.

      • There’s fail, and then there’s FAIL. I know Jason Schwarz didn’t have all his Apple capital “all in”, I have no clue about the others, probably nobody does. But to draw a conclusion that because “all these folks” did something and therefore nothing can be learned from the process is ridiculous, lazy thinking at best. Certainly inexcusable if you are marketing oneself as best in class, to then fall back on a everybody else does it crutch doesn’t cut it. The thinking should be as much about process, checks and balances as anything, i.e., hedging, or lack of it. Hyperbole, no place for it, I mean REALLY no place for it, i.e., never see 500’s again, never see 600’s again, everyone’s an idiot, endless. I haven’t discussed any of this issue before today. I’m all about constructive dialogue though, and have certainly learned a lot. But sticking ones head in the sand using excuses and going on with a business as usual tact is careless.

        • Your response is emotional, without clear headed thought.

          We all arrive at our decisions based on our own analytical thought. We then peer check it with a variety of folks who we believe are in positions to give good opinions.

          To say that we followed all those mentioned, considered their opinions, and we were lazy and stupid and factor them in is not only disingenuous, but in itself reactionary and sloppy, intellectually.

          Check your emotions at the door.

          • lol, hardly emotional.

          • OK. Accepted. Lets just say a difference of opinion. And I, for one, could be completely wrong. That I have learned.

          • I truly didn’t mean for my comment to be taken on a personal level, really my intent is constructive. I look at everything with an eye to how it can be improved, I just see where some things can be improved is about the size of it. I’m not trying to flame AZ either, but if he wants a truly best in class operation he must have a critical eye towards himself, like we all do if we want to improve, that’s not an easy thing, it’s a true test of character.

          • Taken in a constructive manner. As I said, I found myself to be wrong too often, though in good company, but that is no excuse. At the end of the day you have to feed your family, and they frankly don’t give a shit about ones track record on the market.

  10. Andy, given the fundamental issues at play at least for this year, it does not appear that Apple could currently be at its highs under any set of circumstances. However, if Cook and company had managed the situation last year as well as possible, given where the overall market is, what do you think the upper limit would be on the stock price at this moment.

  11. Any thoughts on GOOG? Back to 2012 high. Seeing negative divergence on hourly chart.

  12. you know i’ve already given up and am trying to adjust to new circumstances. but days like today just make me sick. does it pay to sell july 580/600 now at these prices to buy back later? common andy …… are you still pushing drawdowns?

    • i guess i waited too long. that reversal was quick and i was watching the spy. andy why are we (BC) not trading in and out of these recovery spreads? surely you are not holding?

    • Trying to look ahead a little, I see the hourly RSI already very low here at 451. I suspect today will pin between 450-460 due to weeklies. On a push down next week, it doesn’t look like the Apple will be able to make new lows. A higher low, double bottom setup seems very probable based on the momentum at this time and the rebound off that could be enough to get Apple up into the gap where there is no resistance until 500. With a position 5+ months out, I’d wait for the gap to be filled before exiting.

  13. Jonathan Theodore

    With expectations of a significant TTM decline for this quarter, I wonder if apple will not go on some kind of proper ‘bear market rally’ till after April. I’m sure technicals demand one but then we did have a retrace of the 700-500 move with that rally to 594, it’s not like we’ve crashed in a straight line with no big rebounds along the way

    • Continuing from yesterday I don’t think that rebound changed much. The peak to trough move is still 705 to 435 in 4 months. The bear market rally AZ mentioned up to 550+ aligns with the 38-50% retracement of the move down.

  14. for peeps interested in a big-ass iphone, marco has an interesting speculative post:

    • my main problem with a larger iphone is that they better have all existing iphone apps work just as well on the new screen.. like the way ipad mini fit in with the ipad. apple can’t end up with 10 different resolutions like android..

  15. GOOG i will say it probably goes to 1000 itself.. ooops. I know aapl wont but GOOG sure does have a shot

  16. spy doesnt look like it’s grinding down yet, but if it does, that will make things quite ugly for apple today.

  17. AZ – so if we drop down and hit $400 and bounce from there, we would need to retest that $400 low, but if we drop and hold arnd $420/$430, that could be construed as a double bottom?

  18. andy
    please explain to me why we are holding recovery spreads after reading your 10:30 post. i don’t know much. i’ve tried to follow your model portfolios. i have no friggin idea why we bought recovery spreads when we did. we did. given your 10:30 post why would we not have sold them at 460+ and waited to see if we held a double bottom? i just don’t get it.is it because you felt there was still a reasonable chance we were going up from here? i don’t get ANYTHING you have done since 705.

  19. AsAndy pointed out yesterday, the multi-day doji topping signal at 460 was the exact same one we saw at 705. Why didn’t we sell then again?

  20. Andy, when will u put out a fundamental analysis of Apple going forward ? You said you’d do it after earnings, its not like you r busy or something now.

    I’m really curious to know what kind of margin improvement you are expecting , 41% of the 45% which is not achievable due to upcoming form factors & newer models every six months and lower priced iPad mini. If your analysis going forward expects 45% margin you are definitely not realistic and will be disappointed . I see 40-41% and growth to return in second half with Oct flat year and next year 55+ TTM . Stock will work in the second half towards 550+. Wall St will see this at least 3 months sooner than earrings start to improve and bid the stock up in anticipation just like they dumped in Sept with anticipation of bad earnings ahead while everything seemed fine at the time.

    Please get your report out, we are all waiting for it for months.

  21. cobra’s take at 11:20. not willing to call apple rebound dead yet. 50/50

  22. too upset today. not helping anyone. signing off for today. apologies to anyone offended.

  23. hftalert update. sees postive change since jan 25, however not enough to confirm that the current rally is real.

  24. Jonathan Theodore

    Last year, I lost money in the melt-up rally because of a short apple position. This year, it’s happening because of a long apple position…

    • Be happy you did not short spy. I covered at $150.35 (for a nice loss) two days ago.

    • Sorry to hear that!!

      As one who didn’t participate in the shorts during the melt-up last year, or in the current recovery spreads, my analysis is that each trade was put on for different reasons, but both fell victim to what were essentially rare occurrences. Andy’s hitherto impressive record was based on successfully understanding AAPL’s long-term growth over a number of years in which events like this didn’t happen. AAPL became predictable enough just long enough for a whole lot of people to catch on to it — at which point, the thing was destined to come crashing down.

      The melt-up seemed out of line with expected growth, and people seemed to fall into at least two camps:
      * bullish folks thought AAPL’s price was now correcting upwards to reflect its proper growth and valuation
      * but bearish folks thought the rally was unwarrantedly pushing AAPL way above the long term channel its price had been growing in

      Now we have a crash from 705 to here, which people are seeing as…
      1. completely irrational (usually those who thought AAPL should have had the higher prices it had after the melt-up), OR
      2. AAPL is correcting to its long-term upward growth trend line, OR
      3. AAPL’s growth is irreparably slowing and the stock therefore will not be valued at a lower PE going forward.

      Probably an oversimplification and there’s plenty more informed views out there than mine. I was in the bullish camp during the meltup. Now, after the fall, I’m squarely in #2 above. I lost a ton of money, but I didn’t lose all of it, ironically precisely because I followed the risk management advice Andy drilled into his earlier subscribers (see posts from before early 2012, and the articles on strategy, options, and risk management).

      I don’t think AAPL is broken. I think it’s just not the perfect growth engine stock that people thought it was. But I actually think it’s still a good growth stock. I don’t think Andy or anyone else here is an awful person deserving of the sort of scorn and ridicule that’s been thrown about. He’s human, and I wish he’d admit as much to himself and to anyone else. I respected him because I read tons of his writing and judged him to be someone who would call things as he saw them, and when things didn’t go as he’d hoped, he’d say so. He did so last year when the QQQ put trade was busted. Now he hasn’t done that here, and Andy, I wish you would. By any objective measure, the trades are busted even if the setups were mostly good given the information we had at the time. It happens. At least some of us understand that.

  25. We are looking for apple to test the $420 before we see a any bounce ( if any) …????

  26. Andy, you are saying that the best thing to do NOW is to hold cash, what cash you are talking about ? You just told us to short SPY two weeks ago and we are losing with this one too. There is no cash left.

  27. I’m wondering whether it wouldn’t be better to sell out of the recovery positions and wait until we have a trend and then ride the trend with nearer date spreads or calls?

    IMO, only swing trading will save the 1 yr recoveries.

    • gscar, this seems like a good idea to me. It is essentially what I’m trying to do. I didn’t have recovery spreads, but I had other bullish positions that were similar enough. I’ve sold them and been trading AAPL up and down and selling calls against my common.

  28. Demark calling for a big Apple rally starting Monday on cnbc fast money now.

  29. didnt see apple making back into the green today. damn.

    • I think it’s gonna pin at 455. Full disclosure — I have a 450/455/460 butterfly on, so I’m biased.

      • think you’re right. how much do you make if it does?

        • Max return about 150%. Bought yesterday at 1.48.

          • Nice trade. Looks like its going to be another perfect 455 pin today.

            Can you detail how you put on a 450/455/460 butterfly trade? Sorry for the newbie question. I may look into this for future major options expiration dates.


          • Thanks. There’s some discussion of butterfly spreads in the comments a couple days ago from tduckson, heyapat, and others:

            There are various versions of butterflies. Here’s what I did here. My bet was that OpEx pinning would get AAPL right at 455 today. So yesterday, I bought 1 450 call and 1 460 call, and sold 2 455 calls. You buy the “wings” (450 and 460) and sell the middle strike (455). This strategy is only good is you think the underlying won’t make a large move. If it does, you better be watching closely or have a good stop-loss in place or you will lose everything you put into the position. On the flip side, the payoff is pretty nice if you are correct and the stock stays right at the center position that you shorted.

          • The main problem I have with this sort of trade is that it’s not a set-and-forget trade. I feel compelled to keep watching it, especially because I don’t trust AAPL. I mean, look at what it’s doing right now — my breeakevens were 452/458 on that trade, and AAPL ranged from 448-459 today, and is currently at 451.4. We’re still 20 mins from close, but that order entry mistake I made earlier is paying off now — I think AAPL will rally up a bit to 455, but I’m still glad to be out of the trade. Keeps it from being a nailbiter where at 451, I lose 100% but at 455, I make like 200$. Ack!

      • How long are you going to hold?

        • Sold it about an hour ago for 2.88. I goofed when placing a sell limit order and it triggered immediately for the current price instead of the limit I was trying to enter. Oh well. (2.88 – 1.48)/1.48 = 94.6% profit, nothing to sneeze at!

  30. vxapl 26

  31. While we’re waiting for a short in GOOG… it’s been running above the 10ema since earnings. Lots of missed opportunities around here. Loosing patience fast.. actually, probably lost patience. I’;; be debating the cancel sub button this weekend.

    @Fitz … :GOOG +70% in the 740/770 calls spread(posted entry earlier this week)….Booking all, and rolling profits to 760 strike

    • I have the same thoughts myself. My sub ends on the 10th or something like that. I’m only in for 50/mth but even that seems like too much for what we have been getting lately. I will admit that I have become very accustomed to checking in daily for the past year and a half and will probably experience withdrawal of some sorts. SPY model does not interest me and Andy’s apple calls are not much these days (nothing proprietary anyways). I want some detailed fundamental analysis that we used to get. Not that it will be my gospal but I want some of ANdy’s insights. I still respect his thoughts..

    • dont see that tweet. is it behind his paywall?

      • Yes, it is. I probably shouldn’t have copied it in here, but the glaring difference in performance from BC is just disturbing.

        Same here .. early sub… had/have a lot of respect for AZ, but it seems like he is a one trick pony — AAPL bull. He seems busy — sure not investing in BC — perhaps he’s busy trading his account to repair it. I’ve been disappointed with the lack of posts, the lack of addressing the massive losses, lessons learned. I haven’t seen any comments from AZ on subs’ observations about failing to follow the Pros EPS estimates (and still not following EPS estimates).

        Using overbought/sold and relative strength oscillators without monitoring MAs. Just a bucket full of fale imo. Sad end to a great experiment in my mind. I could go on, but I won’t out of respect. But I did want to explain my exit — perhaps feedback like this will make BC stronger over the long run. I’ll miss everyone here for sure.

    • Will pick one up an a dip. Its at $17.28 now

      • The trade is probably mostly done… follow it up until it breaks the 10SMA then dump it and go short. But who knows how long it’ll run… it might end up being a good trade.

        • just curious, what time frame do his trades run, ie is it day trading only?

          • He seems to be a little better than Kay2Kim. Picks obvious entries (long/short) above below support, then moves stops up to previous day low.. let’s his “runners run..” all that junk.

            I really liked the BC AAPL 10 bagger strategy, but there was little no risk management — I learned a lot of bad lessons and caused substantial damage to my account (my fault, I got greedy). But now with a much smaller account, my trading MO needs to change … I have a day job, so strict day trading isn’t for me. I’m naturally a trend trader.. Still figuring out how I’m going to trade going forward. But BC isn’t working for me at all.. currently.

          • same boat man. i also cant and have no interest in daytrading. BC was first appealling because you can follow it daily if you had the time, or just the main tweeted trades if you didnt.

            my account has also been decimated, and no idea where to go from here.

          • Also, he takes many small positions (5% account size). That’s something that appeals to be at the moment given that I’ve just lost so much on what I consider “the best company evar!” I will be trying to enhance my RM skills.

          • ha! 5% of my account is probably not enough to by a single contract.

    • What te whole address for fitz?

  32. Andy,
    It looks like we’ll get a black reversal bar on aapl today. Considering the black bar and Demark’s call for aapl to gap up on Monday, primarily because aapl is now down three days in a row, what do you think aapl does on Monday/next week?

  33. sold my GOOG 775 calls for 1.90. Bought at 1215hrs EST for 0.78. I bet GOOG will top for the day now at 775, just a gut feeling, nice round number, and it’s been running up all day. Don’t know, though.

  34. archibaldtuttle

    Aapl: Andy used to call action like today’s a bullish hammer.

    • Now if all other stocks would reverse and end red with APPL green, we’d have a perfect NFP .. but AZ is probably correct that the 1st of the month cash inflows is screwing up the normal NFP pattern.

  35. Rising wedge on SPY intraday? Perhaps some selling pressure into close.

  36. Higher lows 60M chart on RSI 7, 14 , ChiOSc , and on price. Now we just need to take out 462 next week and an uptrend may finally begin.

  37. gscar,
    Thanks for response to my 11:41 post. I always have problems with the options calculator. Tried your suggestion and it does not make sense to me. so can you help? Here are particulars:
    Bought Jan 14, 900 – 1000 spread on Dec. 20 ’12 @$2.95. On July 31 and Sept 30, ’13, what would the value of spread be if price is $500, $550 and $600? Thanks for help from anyone.

    • jshartle, it’s not pretty. Looking at the calculator, it looks like just to maintain the $0.21 value that you have today, you need to be at about 545 end of July and 600 at end of September. 600 at end of July will get you to $0.85.

      Personally, I am in some 800-900 Jan 14’s. Don’t look much better.

    • optionsprofit calculator is showing them to have a value of $.31 today.
      Here are what its showing for end of July and Sept. These are rough values. They are all less than today other than the approximate value of $.85 at 600 by end of July.


      July /.05/.25/.85

      Sept /.01/.04/.23

      • So, we REALLY need to see a price increase soon or it will be almost 100% loss. Unfortunately, back in Dec. I used funds beyond what I had left from selling the Jan ’13 positions. Now it looks like I only multiplied my losses.

        • I’m very sorry to hear that. I wouldn’t give these more than a month.

        • yup the harsh reality of options. getting the direction right is not enough, it also has to move it that direction sooner than later.

          i know you’re options are on a longer time frame, but same logic still applies to following example:

          i bought some 445 apple puts tuesday at the close when apple was at 458. thesis was that apple had been up 2 days in a row, 3rd day is usually down. i was almost right, unfortunately the down day only came today, 3 days too late. had apple kissed 448 on wed or even thurs instead, i would have easily double or trippled my money. instead, it only did that today and the trade was a fail.

          holding 900-1000 is the same idea, i never expected apple to get to 445 this week just like i hope you dont expect apple to hit 900 this year either. both trades rely on apple moving in the right direction early on enough to give credible hope that the strike price is possible.

          bottom line, you are running out of time big time. every successive (failed) apple rally will increase the value of your spread less and less and it will crash more and more everytime the rally fails.

  38. archibaldtuttle

    I did some consulting work for HP last year. They are totally confused as a company, don’t know what they are doing, and probably don’t have much of a future ahead of them.

    But the last laugh is on me. Because of Andy’s intense leadership, I went 100% in on AAPL over the past year. And in the 1 year timeframe, HP stock has outperformed AAPL by 5%. In the 6 month timeframe, HP has outperformed AAPL by over 60%!!!!

  39. andy why not wait for a clean breakout in GLD?

  40. Andy,
    Could you elaborate on what makes GLD so bullish?
    I see that there’s a bullish falling wedge pattern – but is that it, or is there anything else?

  41. .21% gain in my account today! yipee!

  42. archibaldtuttle

    Which comes first, GOOG 900 or AAPL 600?

  43. Andy, where are all the research reports u have promised the last few months on AAPL? Lay out your thesis already for next year. isn’t this a “research” publication?

  44. The Jan trade was a total fail and now my April recovery spread which I purchased for over $4.00 is worth $.09. Andy, I’m here because of your apple guidance. I’m wiped out. If you gave up on apple, or your thesis has changed or you frankly just don’t know then please say so. Frankly, you’re soon going to lose another loyal sub if you continue your silence. Listening to you has cost me a fortune. I still believe in you but please offer me a new plan on. You can call it recovery phase II.

    • Jonathan Theodore

      I’m not sure what he can say anymore. Short of a massive bear market rally saving those spreads. I mean, we’re talking about an 80-90% loss followed by a similar loss now on the recovery spreads. I don’t think it’s possible to recover from that

  45. Andy,
    I’m sorry for sounding disrespectful, but your 4:02 post was basically stating the obvious as it relates to AAPL. Do you think we’re more negative than positive in terms of momentum? Do you still think that we’ll retest the low 440’s next week? Based on the three consecutive down days, do you think that we bounce on Monday? Please, what do you think?

  46. Jonathan Theodore

    Jesus, the April spreads are down well over 90%

    • Micah Wakefield (Aspect13)

      What’s crazy about this is after all the talk about learning lessons from the Jan debacle, if you did any April’s, you obviously didn’t truly learn the lesson. Ugh.

    • “Don’t bet against us, Brian, don’t bet against us,”

  47. Life question for those that have lost a lot of money here:

    I’m a pretty frugal guy, i shop for best prices on everything, negotiate. Make efforts to save cash where I can, call in and complain for mischarges on bills, even if it is only a couple of bucks. Use coupons, search for discounts, save on electricity and heating when possible, etc.

    now, i haven’t stopped doing any of these things, but i feel like a complete fuckin moron trying to save 5$ on groceries with a coupon when at the same time i threw away thousands upon thousands in the market last year alone. furthermore, i feel like a complete piece of shit when i see my wife denying herself a little pleasure or treat like an ice cream because she says it’s a waste of 5-10$ and she’ll just have some at home instead.

    anyone else in this situation? it makes no sense to me, on one hand my wife and I are making all these efforts to save $$ while im just throwing it away on the market. like wtf?

    • You’re not alone. I’ve become the same way, and I have a theory on this. It’s something not rational, but cutting coupons or the heat is something in my control. In this fallout, I’ve felt most of the time that nothing was in control. I was just watching a ship slowly sink, one I was on.

      I don’t think it’s unusual to swing like a pendulum, but your wife shouldn’t deny herself an ice cream. That isn’t good. What we have to stop doing is throwing away money in the market. That doesn’t mean not investing, but unless you’re going to day trade or swing trade in the short term, aapl is no place to invest. At >400, going out conservatively with like a 450-550 Jan 15 spread, that’s a different story.

      • let me clarify, she doesnt deny herself an ice cream because I lost all the money I did on the market. it’s just how she is, she doesnt like to spend money on frivilous things. she’s a saver.

        i am that way too, the only things i like to spend on are things that last, like quality appliances for a kitchen reno for example. hate spending on things that dont last like vacations, meals, etc.

        anyway, off track here. the point is, how does it make sense that with one hand I am making such an effort to save pennies that the other hand is throwing away at 1000x the speed?

    • I don’t consider myself frugal, but I do like a good deal when I purchase. I feel you. I found myself looking at some coupons last night, and it occurred to me how stupid it was after I just dropped 6 figures in less than 6 months. Dropped my account balance to below financial crisis and tech bubble levels. Go figure.

      Another thing that I find curious is that I am generally very risk averse. I have not gambled a single hand in Vegas in the last 10 times that I have been there over the last few years. I don’t understand how I let my trading account get this out of control.

      Now I am stuck with some worthless “recovery spreads” and some AAPL common. I sold all of my common in AMZN & GOOG, and sold all of my mutual funds to “invest” (gamble?) in these x-bagger spreads. Only thing that I kept was AAPL stock. Stupid.

      Anyone have a 5-bagger spread that they can suggest? (Just kidding of course.)

      • exactly, your first paragraph is exactly how i feel. wtf am i doing reading flyers after dropping all that cash these past few months? it’s the most contradictory behaviour. doesnt make sense.

        i did go through a point where i kept thinking of a million other stupid things i could have burnt the money on instead (lotus elise, vacations, etc). but i quickly realised that would never have happened. even if i still had all the money i lost, i still wouldnt be doing any of that. so no point beating that dead horse. somehow, as irrational as it is, it is more acceptable to have lost my life savings in the market (for nothing in return) than on an extravagent vacation or sweet car.

        • I hear you. I did (and do) the exact same thing. I like high quality stuff, but I really like good deals. My wife likes good deals even more than I do, because it seems wasteful to spend more when you can get it for less.

          I like gscar’s theory about it — that need to have some control is important — though I think it is actually rational behavior. Because to some degree it’s about our perception and knowledge of the relative amounts of risk involved. I really felt like I had no control over what was happening while my accounts were being decimated in the last few months. Rationally, this wasn’t the case — I could have easily gotten out of the trades, but I just didn’t. It didn’t seem so risky when I got into the trades, and it seemed like a really good deal, but that was because I wasn’t giving full weight to the true risks of my behavior. So I’m not sure it was really as big a contradiction as it now appears to be.

          What helped in the end for me was to close the books on the bad trades, step aside for a bit, accept the losses, and look at where I screwed up. It all came down to risk management in my case. So I made up a new plan that’s more in line with the way I do things in the rest of my life, and have been following it pretty strictly. I feel much more in control of things, which makes me happier. I don’t know that it makes sense, but that’s where I’m at now.

    • i know what you mean.. being responsible and thrifty in daily life over tens of dollars can seem so ridiculous when your investment account swings by thousands of dollars over a few weeks.

      the problem clearly lies with the latter – an investment strategy where money comes and goes in such large %s is gambling.

  48. Nasd is keeping markets higher with low RSI relative to other indices. All other indices are above 70
    on the 14 day and the Vix is screaming for the markets to correct.

    It is BS earnings in tech (Goog, FB etc …) that is causing unwarranted optimism and creating a false front.

  49. Is anyone looking to short aapl in here?

    I agree about the fund inflows at the end/beginning of Jan/Feb.
    AZ has said aapl is technically weak here … I am wondering if there is a short play down to 418. This would fill in the Jan 2012 gap.

    Any thoughts or suggestions on an aapl short play?

    • tried to short this week, failed. so im no help to you.

    • Why short AAPL down here.. Why not look at stocks pushing there limits right now..my guess is a lot of tech stocks like AMZN and GOOG are seeing there highs until october… in a market like this you need to sit and wait. Sell in may might be a doozie this year IMO.

  50. Hello Andy,

    Will you be working this weekend? I almost always work weekends, and just wanted to know if it made sense to check for updates, and where best to look.


  51. Micah Wakefield (Aspect13)

    Don’t they need to do a bigger phone like Marco suggests here?

  52. Shawn O'Connell (Shoc13)

    Does anyone have the address for the board run by iPad (lost my links)… Thxs

  53. Shawn, Lovemyipad’s site is: http://aaplfinance.proboards.com

  54. And now for the weekend where is everyone?

  55. Shawn O'Connell (Shoc13)


  56. Cobra sees a HS pattern on the weekly chart dating back to the 2009 lows with a L shoulder last spring, a head in Sep and a R shoulder this fall on the run to the 600 area. The measured move is well below 400 (looks around 360, same spot as KKim).

  57. For TROOF, ‘ looks like oracle fixed java, and oracle has an update on their site.

    Less than two days after Apple once again blocked Java 7 web plug-ins on OS X, Oracle has released an updated version of Java 7 to address certain security vulnerabilities.

    The new Java 7 arrives as Update 13 and carries a version number of 1.7.0_13-b20, meeting Apple’s requirement for a minimum of 1.7.0_11-b22. Oracle has also released an updated version of Java 6, although Apple was not blocking the previous version of the plug-in.

    Oracle notes that the new update contains fixes for over 50 issues and that the launch was accelerated by several weeks in order to address a vulnerability that was being exploited in the wild.
    The original Critical Patch Update for Java SE – February 2013 was scheduled to be released on February 19th, but Oracle decided to accelerate the release of this Critical Patch Update because active exploitation “in the wild” of one of the vulnerabilities affecting the Java Runtime Environment (JRE) in desktop browsers, was addressed with this Critical Patch Update. […]

    Due to the threat posed by a successful attack, Oracle strongly recommends that customers apply CPU fixes as soon as possible. This Critical Patch Update contains 50 new security fixes across Java SE products.
    The latest versions of all Java SE packages are available through Oracle’s support site.

  58. Some info on GLD from cobra’s free charts

  59. Andy – are you offering refunds to folks who are eligible?

  60. Brutal game andy. I was rooting for the niners. I guess the tough breaks continue

Leave a Reply

Your email address will not be published. Required fields are marked *