MODEL PORTFOLIOS CURRENT POSITIONS
1. The Bullish Cross SPY Model Portfolio
1. Short SPY @ $155.52 x 15,000 shares
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 @ $67.14 x 2450 shares
5. Long UNG @ $19.54 x 5,000 shares
6. Short GOOG @ $445.30 x 360 shares
7. Short QQQ @ $85.03 x 5,000 shares
Enter Portfolio Here
3. The Bullish Cross Trading Portfolio
1. Long Apple January 2015 $93.57 - $100.71 Spread @ $0.71 x 1400 contracts
2. Long TSLA Sep 20, 2014 $280 - $300 Call-Spread @ $4.00 x 200 contracts
3. Long FB January 2015 $90 - $100 Call-Spread @ $0.70 x 1000 contracts
4. Long PCLN July $1200 - $1250 Call-Spread @ $17.40 x 75 contracts
5. Long Facebook January 2015 $90 Calls @ 1.24 x 1000 contracts
6. Long SPY August $190 Puts @ $4.14 x 1000 Contracts
Enter Portfolio Here
THE LIVE BLOG 9:30 AM - 4:00 PM
10:40 AM -- we're starting to see some bump ups off today on the hourly chart as the market/Apple both reach oversold conditions on the 60M. So we should see a little more upside -- maybe throughout today's session -- and then we may very well see a top of some kind lead to a larger pull-back. That's how these things have typically gone. I think if we see an extended pull-back in Apple, it could last a good while given how overbought Apple has become. With the SPY, it could be a quick 1-3 week pull-back.
Notice in the Apple chart below, we've gone through that whole 90-RSI followed by negative divergence cycle now. So we could really be sitting right near the end point here of this overall momentum rally. Given that all the news is behind Apple -- stock-split + WWDC -- it wouldn't surprise me to see a big of a sell-off between now and early/mid July when Apple reports earnings.
With the SPY, you could expect a bit of a rebound here as it did reach a sub-30 RSI in yesterday's last hour of trading. Notice what happens every time the SPY begins to rebound off of oversold conditions as denoted by the blue dashed lines:
What we can say here is that the SPY will need to retest the highs. If it fails to breakthrough, that could lead to a larger two-legged pull-back. If it breaks through, then we know that the SPY is on its third leg higher from the rally beginning on April 14 - April 18. Notice that on the daily chart, we're still sitting near a 70-RSI and whenever we've seen the SPY get overbought like this on the daily, we've seen much much larger pull-backs on the horizon:
At this point, we just need to be very patient. This next trade move is going to be very significant for the portfolio. We have $600k on the sidelines. The portfolio is trading at a current market value of around $1.8M right now after this pull-back in the SPY. We were at $2M+. But with the right trade in Apple with this $600K (part to go into a near-term spread, part to go into the $93.57 - $100.71 spread), we could see the portfolio skyrocket by year-end to +200%. That would put us at $3M going into 2015. A double on that portfolio next year would bring us to 600%. So you can see where the compounded returns can really put a ding in things. But it's first important that we execute this next step very well.
1:30 PM -- this comment is in response to Wings & Dansan's thread below. They ask about time-frames with Apple. This chart shows each consolidation phase Apple has had since bottoming last July near $390 a share. Notice how after these big parabolic-type run-ups, Apple tends to consolidate or trade sideways with some volatility for months at a time. Here are the consolidation phases we've seen. Remember how we harped on $570 being a pinnacle point for Apple. Once it broke above $570, it has been but empty space for resistance for Apple. That was to be expected. No selling anywhere. But at some point, the buying momentum will start to slow, traders will start to get impatient, there will be some selling and new lines of resistance will form. We will see Apple then consolidate for a period of time. It's not obvious how long that consolidation will last at this point. I'm thinking it will be short in duration given that we just came off a 5-month consolidation period:
3:35 PM -- for this week's Game of Thrones finale.