Bullish Cross Live


1. The Bullish Cross SPY Model Portfolio
1. Short SPY @ $155.52 x 15,000 shares
Cash: $0.00
Enter Portfolio Here

2. The Bullish Cross Alpha Model Portfolio
1. Long GLD @ $161.51 x 835 shares
2. Short IWM @ $102.14 x 4,500 shares
3. Short SPY @ $161.50 x 7,500 shares
4. Long AAPL @ $470.00 x 350 shares
5. Long UNG @ $19.54 x 5,000 shares
6. Short GOOG @ $890.60 x 180 shares
7. Short QQQ @ $85.03 x 5,000 shares
Cash: $0.00
Enter Portfolio Here

3. The Bullish Cross Trading Portfolio
1. Long Apple April $580 - $600 Call-Spread @ $2.7648 x 2000 contracts
3. Long Apple $500 - $490 February 7, 2014 Put-Spread @ $4.75 x 315 Contracts
4. Long Apple $485 February 14, 2014 Puts @ $4.32 x 120 Contracts
5. Long Apple March 7, 2014 $520 - $530 Call-Spread @ $2.00 x 1500 Contracts
Cash: $273,387.00
Enter Portfolio Here
THE LIVE BLOG 9:30 AM - 4:00 PM

10:20 AM -- so far it looks like today is a transitional session. We will have to wait and see more. The market could be gearing up for a rebound now. It's not obvious Apple has started its rally either. Need to see a lot more upside first.

12:20 PM -- so far with the SPY it looks like a run of the mill rebound like we had last week. It could be something bigger, but we will just need to wait and see. Depending on how that goes, we may cover the puts we sold yesterday. But at this point, we don't intend to do so. It's all about timing the end of the week to be honest. As for Apple, I think it has now come too far to go back. We really need to see a strong push to the upside now. I'm not super happy with this set-up anymore. I would be a whole lot more comfortable if Apple would have simply just pushed down to oversold levels and then had this rebound. As it stand right now, this could just be a small snap-back rally ahead of another push to the downside which then pushes Apple into oversold territory. That would not be good (unless Apple turned lower immediately). So at this point, I want to see Apple either start to really run or sell-off. One or the other. But it needs to be pretty substantial either way. If we do see a sell-off, it's fine as long as Apple gives up all of today's gains and then sells off toward the lower $490's tomorrow. That would get it to oversold in the $480's. So that's an ok outcome. Also, a push up to like $517 would move it squarely into rally territory -- and incidentally only $15ish from being in the money already. That would signify the beginning of the larger expected rebound. But right now, we're sort of in no man's land with both Apple and the SPY.

The push down that we did have in the market does indicate that there's very little chance that the selling is over however. This is probably just a rebound at this point. Normally, with such heavy selling, you could expect another leg to the downside. We're not there yet.

3:40 PM -- well we will have to wait until tomorrow to get a better sense of things. I had a distinct feeling it would be a transitional session today. It just felt like the market needed a pause. That's what we got today. It's not obvious whether this is the start of a rebound or just a consolidation. We are due for a rebound in the market. So we'll see. Technically speaking, we did trigger the $VIX b-band buy set-up today. The $VIX fell back below its upper b-band. If I had to guess, we're very close to a massive rebound.

8 responses to “Bullish Cross Live

  1. Andy, could you offer an opinion on the significance of the first day of the month being as big of a down day as it was, especially considering your inclination to view those days bullishly?

    • They’re not always green. In a multi-month correction, they’re often red like any other day. It’s just that the first trading day of the month has a high probability of marking a bottom and being deep in the green. It has a very long statistical history behind it.

      But say we’re in June 2011 or something like that. That was a near 6-month long correction. Some of those 1st of the month days may have been green — I think a few were if memory serves. But it’s not like it has to be green or anything.

      It’s just that it isn’t very smart going into the first day of the month short if the market is down huge going into that day because bottoms often happen then. In fact, most bottoms occur during the 1-6th day of the month. More bottoms have happened in that period than any other period.

      You seldom see bottoms mid-month. It almost never happens. So if we’re still selling off and we’re near Valentine’s day, good chance we’re going into the end of the month in the red and then March has a high probability of a bottom — not just for the first day of the month, but as a swing month.

  2. Andy,
    Don’t you think there’s a lot of dividend buying taking place with AAPL both yesterday and today? Especially, wouldn’t you think that AAPL is buying back it’s stock yesterday and today? Not only would Apple be able to buy it’s stock at a low price, but also reduce the dividend payout.

  3. Hi Andy,

    In the 12:20 comment you state, “As it stand right now, this could just be a small snap-back rally ahead of another push to the downside which then pushes Apple into oversold territory. That would not be good (unless Apple turned lower immediately).” The first sentence is self explanatory, but I don’t understand the second. Can you provide some clarifying comments on why an immediate lowering for Apple would be better? Thanks!

    • Well what we don’t want to happen is for this rebound to drag on. Every day Apple sits flat or in the green, the more out of oversold territory it goes. Then it will require an even larger sell-off to finally get oversold.

      However, if Apple closed red today, then there is no damage. Because overbought/oversold is based partly on how the day actually closes out. A reversal and close in the red would put Apple at a lower RSI than it was at yesterday’s close. What we don’t want to see is like 3-days of Apple sitting around up here at $510 and then turn lower. That would suck.

  4. Your last comment was very helpful.

  5. What is the Vix b-band buy set up?

    • Vix Shantell and the “B” Band–a 50’s group.
      Just kidding.
      It is when the volatility index for the spy (VIX) goes outside the upper line of its Bollinger Bands (b-band, or BB) and then comes back down inside it. If you then go long spy, you have a good percentage chance of profit.

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