Bullish Cross Live


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

9:15 AM -- we will be posting updates after the first hour of trading. The SPY is still over-extended near-term so I wouldn't be surprised to see a full reversal of any gains this morning. Secondly, we had another day of negative flows from the market as things rise. All of these near-term gains are likely to be lost within a few sessions given the lack of real conviction on the rally.

11:00 AM -- as I sort of expected earlier, the market has simple pushed way too far on the upside. We do see that happen a lot right as things top-out. If you go back to the previous melt-up rally we saw the same exact action. A very sharp pull-back ahead of a very significant rise in a very short period of time. That rebound was also sold into with net negative money flow and then we saw the SPY top out. That's how the January 2012 to April 2012 melt-up rally ended. It looks pretty identical here. Today I personally purchase some June DITM puts on the SPY near $154.80. I did trade in and out of SPY common, but have chosen to leverage at this point. June is four months out, the delta on my puts are close to 1 and on a $10 to $15 SPY correction it will create a sizable gain. So I'm taking a more intermediate-term view on things and want to capture the next big move in the markets. I think overall it just improve the SPY model if we try to get ahead of the larger next coming move on the SPY. You see from here, the next big move is far and away more likely to be on the downside than on the upside. We're more likely to see -15 than +15 from here.

Apple was downgraded today and is probably why we're seeing the weakness that we're seeing. However, you have to remember that Apple is still oversold on the daily and has been down almost every day for the past three weeks. So as I explained yesterday, without a sizable rebound, the stock will remain oversold increasing the likelihood of a larger rebound EVEN IF the stock pulled back after yesterday's rally. So that's sort of where Apple stands right now. The downside from here relative to the upside in the near-to-intermediate term is more limited. Mostly because it is now oversold on the daily.

2:45 PM -- well this has been a pretty muted trading session. The major thing to mention about today is that the SPY has gapped-up and is trading above it's upper b-band while forming a black-bar candlestick for most of the day. You can add that to the long list of signs that this rally has turned very frothy and getting near the end of the trend. I think the employment report on Friday will likely lead to a trend-change. Not as a result of a bad report, but as a result of NFP days generally marking the top and bottom of trends:

Aside of how we're positioned in the SPY model and the few positions we have in the long-term portfolio, we're still not ready to take large-scale short positions across the board in the long-term portfolio.

4:00 PM -- aside of the Apple downgrade and the SPY opening and closing above its upper b-band, it was a rather uneventful trading session. You can see the black-back that has formed today and the clear open and close above the b-band. That's typically a huge sign that a top is around the corner for the markets. Also, keep in mind that even with the SPY sitting up here at $154, the downside on a correction would still be around $140 to $143. And that would be a normal correction and retracement:

56 responses to “Bullish Cross Live

  1. Andy, what indicates negative flows from the market?

  2. Andy, as you requested I posted my comment/question on the post-mortem in that page and it says its awaiting moderation. I have always been respectful and never moderated so I assume its just a glitch. Since you said you are willing to take questions could you discuss what I brought up. There seems to be a pretty consistent, but fair outlook in the comments there, summed up more articulately than I could, by DanielC who posted last.

  3. Benny Souder

    Hi Andy, do you have any thoughts on today’s downgrades or the iP5s rumors from last night? I’m curious what you are thinking about the latest Apple news, of which it seems there has been a bit of in the last week or so. Thanks.

    • Darren Grayson

      Citi forecasting a year over year decline in iPhone sales. The market is saturated. In hindsight with knowledge of the fundamental decline this AAPL crash looks somewhat appropriate.

      • Benny Souder

        Perhaps, but Citi has been negative for a while (apparently the people that buy stock for Citi don’t agree with these people that rate it). I think Citi was wrong about last quarter, and that they were one of the last to downgrade on supply chain noise. There was another downgrade today, too. But there are a lot of other rumors, including some Andy has probably heard and I have not. So I’m soliciting his opinion.

  4. I always thought that there was a shitload of money here in the hayday. It’s really starting to become apparent how all of our buying of calls propelled the underlying stock to accelerate into the “parabolic rally”. We talked about it in the comments section but were dismissed by our guru. That whole thing has now unravelled and apple’s fundamental future is in question by the street so this all makes sense. Damn. To have the last 6 months back. I have never been a sucker before and never trusted one person with so much until Andy. I sure hope he wasn’t betting against us near the end… I will leave it at that. My subscription ends this weekend and I will most likely stop being a member. Best to all if that is what I do. I just haven’t heard anything “new” from Andy lately that warrants my attention here…Martin.

    • Steve Hamilton

      Latest article says subscribers here lost in the area of a billion dollars in the last six months. Shocking destruction of lives and wealth.

    • Micah Wakefield (Aspect13)

      It does appear as if the massive move to undervalue the current fundamentals is completely based on believing that the future fundamentals will look nothing like it; ie, that there will be a massive fall in earnings, sales, revenue, etc. That the peak of popularity and it factor is now over. Probably pushed forward by the many articles like this one by a macworld guy:

  5. Mr Zaky,
    When do you expect to layout your SPY Leveraged Model? My subscription is up soon and the charge coming sooner, and before I re-up I would have to know.

    • Andy M. Zaky

      That’s the next thing we plan to do. If you saw I spent the last two weekends writing out the postmortem.

      • Benny Souder

        Well, this is just my personal opinion, but….I guess that the post-mortem was cathartic for some, but those of us still here are still trying to make money (or should be, anyway). We have Apple positions, and a certain view on the company and the stock; we have or want to have or have a proposed position in a SPY model, or something with SPY, and we have/need/should trade those two positions. I start at 5am and I work evenings and weekends. I need all the help I can get. That’s why I’m here. I work about 60 or 70 hours a week. I don’t take vacations. I need help and advice.

        That was then.

        This is now.

  6. Andy,
    On TD Ameritrade I see delta value of 0.501 for June 22, 2013 SPY PUT of 154. You indicated the value is close to 1. Can you please clarify this for me?

  7. mar0111,
    Why don’t you mind your own business. Is $163 DITM?


    Philip E D , contact me to talk about BC. I told him my story. But when he sent me the copy of what he was going to print , then it was a lot of things out of context and ” quotes” that I did not even say. I told him I did not approve . He published it anyway.

    Honestly , english is not my first language so I know I would never use” punk kid” for example, also I told him I bought apple at $90 but I did not convert that money to buy Spreads like he states in his article. I was already in cash when I joined BC .

    I am not contesting what he wrote if it s true or not. I am just saying my part of the story here.

    • Shawn O'Connell (Shoc13)

      U don’t have to explain to ANYONE.

      • Completely agree with Shawn. A bunch of folks here were hurt pretty bad including me and we’ve all been pretty upset over the past 5 months but as Benny says above, we are here to make money. We know Andy is a pretty talented guy who already knows a bunch, but is also learning, as are all of us – and why many of us are still here. Additionally, regardless of the amount of money we individually have lost, none of us has had our character attacked as Andy has, which I don’t believe is warranted.

        • yes myrahjm I agree with everything you said. Lets make it all back and much more. I know it can be done . I am glad Andy has decided to stay in the game. It shows what kind of person he is… lets see what kind of articles will be written about him in a few years.

        • +10^100

    • Shawn O'Connell (Shoc13)

      U r paying for a service & Andy should give advise IMO

    • Thanks Gracie! I am sure you, like most of us left here, would like to move forward
      and make some money. I am also sure Andy would like nothing more than that as well!

    • bananastand

      I was happy to see you quotes only because I hadn’t seen you posting much at all.

      When I first joined you were always, what I thought, a very conservative voice of reason. And very respectful. Sometimes I even thought you were too conservative; clearly there was no such thing as too conservative with Apple.

      I agree you have nothing to explain. You are very classy.

  9. Andy is SDS another good way to to short the spy?

  10. MARKET IS LIKE a beachball underwaer. keeps popping back up

    another tip CREE will be 75 this year

  11. C&H on the SPY 15-min, think it’s going to mid 155’s

  12. cant see how this is not bullish if spy gets back above today’s high. this is not good for our shorts. getting sweaty painful flashbacks from shorting apple last year.

    • Greater volatility — which includes some up days — is normal for topping processes in the longer term.

  13. dmeyer it will be buddy give it a little time to digest its 80 pt move….

  14. captainboom

    Andy, is there a reason you don’t use the E-Mini futures for a leveraged position instead of SPY options? Sure, they can have non-trivial dollar moves, but they don’t suffer from time decay and they aren’t subject to limitations on day trading. If your account size can handle it, I would think they have some advantages.

  15. Andy, I’m only asking cause you’re giving very mixed signals. You’re clearly available to comment so all I ask is for a straight answer. Do you plan on saying anything more about the post-mortem? If not, please simply say so because it feels like you are ignoring those questions despite what you had previously said. I think there are substantive questions involved that relate to trading strategies going forward so this request is hardly about lingering in the past.

    • Andy M. Zaky

      Yes. I’ll take a look at the questions later on. By the way, I couldn’t find the source or reason for why your comment was moderated yesterday. So don’t think anything of it.

  16. I have made comments in the past about trading the SPY model, in particular about leverage. You must understand Andy’s trading style, the pluses and minuses. He trades SPY much like AAPL, based on overbought/oversold indicators with no exit conditions and no stops. He has a good feel, thus the 90% win percentage. That win percentage is partly due to not having stops, and allowing a drawdown to come back for a profitable trade. But you must understand the risks too. It’s not as important when trading straight SPY, but very important when trading at leverage. I have recommended in the past going back and looking at the SPY historical trades, and in particular analyzing the worst losing trade to understand the risks. I highly recommend going back and reading the daily logs for that trade, every day from the opening of the trade to the end of the trade. Look at Andy’s comments and why he kept holding into a large drawdown. Do it BEFORE trading his SPY model at leverage. I’ll make it easier for you. The trade is the early August 2011 trade. It was closed at a -8.33 SPY loss, but the intra-trade drawdown was over 17 SPY points!!! Thats 170 SPX points, or over 13% unleveraged drawdown. Historical drawdown is the MOST IMPORTANT statistic to look at in a trading model, when you are going to trade at leverage. If you trade at leverage using SPY options, how deep-in-the-money do you need to be to be safe? Ask yourself, is 10 pts enough? When the historical drawdown on a closing basis is -8.33, and on an intra-trade basis it is over 17? Emotionally what kind of drawdown can you take? What risk is there of taking a serious loss, on the order of an 80% to 90% loss? Leverage is powerful, but it is also dangerous. Understand the risks, based on the historical results of the model you are following.

    • I could not have said this any better. What arbee says is 100% accurate. Andy would agree to this I’m sure. That is why he has been hesitant to implement a leveraged SPY trade in the past. Arbee only mentions one trade but there are many that had severe drawdowns. Including the current one…be warned.

      • ? Current trade drawdown is like 3%

      • Andy M. Zaky

        I’ll be explaining the SPY model and when to use leverage. Not every trade calls for leverage. There are some trades that are relatively strong but still not worth leveraging. And then there are other situations where leverage makes sense.

        What I’m thinking about doing with the SPY model is continuing it as is and then using leverage when the situation calls for it.

    • captainboom

      Thanks for the discussion. I’ve not been around BC long enough to have witnessed AZ’s SPY trade or the significant drawdown. 170 SPX points = $8500 on one /ES contract. Hence, my qualification re: account size. If one was to limit risk to 2 percent, that means an account of 425k.

      • Aha, arbee is the person I was remembering the other day who suggested looking at Andy’s SPY trades from last year and looking at the drawdown specifically. Thanks for that.

  17. Just read the article at apple 2.0. Unbelievable. What a bunch of whiners. Matured investors dont whine. You still have people who respect your opinions. Take the hits and keep walking. A loss forms an intrinsic part of investing. People who don’t understand that have no business here.