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Post by lovemyipad on Oct 11, 2012 13:43:53 GMT -8
Post-lunch "deep" thought after reading iPad's comment: Apple stock is like a tremendous accordion with the big boys playing the instrument. When they pull on the handles and prime the pump, money gets sucked in at a furious rate and fills it up fast (stock hits 705). Then the EOs squeeze that baby hard (sell!), and all that money goes shooting out into their pockets. The little guys get "played" in A minor. Perfect analogy!!!
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Post by Apple II+ on Oct 11, 2012 13:45:15 GMT -8
Down 7-10% from an ATH is not uncommon for AAPL. Seems to happen every quarter. It's a decent sale, and a great time to leverage with OTM bull put spreads, with the short strike 15% down from the ATH. Down 15%+ hardly ever happens
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Mav
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Post by Mav on Oct 11, 2012 13:46:42 GMT -8
BCS traders need 20 points by January if they're patient? As the market evolves, so must the participants.
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Mav
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Post by Mav on Oct 11, 2012 13:49:13 GMT -8
I can tell you why 15% can't be ruled out. Aside from good ol anything can happen, there's also the indisputable fact that AAPL's momentum accelerated this year.
But that's just stuff to keep on the radar. Planning is the furthest thing from panic.
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Post by Apple II+ on Oct 11, 2012 13:59:17 GMT -8
15% down can happen, has happened, and will happen again I'm sure, just not sure about when. Last time was May expiration, and it was a doozy, down almost 19%. But it's rare, and manageable (or is it salvageable?). With bull put spreads you can always roll out and up (for a credit!) until AAPL catches up.
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Post by rickag on Oct 11, 2012 14:03:44 GMT -8
Am I the only one that would love some PE compression after a great earnings? If we hit a PE of around 12 I'd sell all my common and place ITM leaps and BCS's. a low PE ratio is a great time to buy, don't be afraid of it Nate. Im fully loaded at the moment so yes I am very afraid of a p/e of 12 at the moment. I will not sell here and take a loss like this. I will wait months if I have to, to get back to my break even price of 690.00. I hardly believe that within less then a month apple is worth 50 billion dollars less. They didnt suddendly stop selling products this month. If I can get back to break even I dont think I will ever use margin again. This has been a disaster. But in prospective Im still up around 50 dollars a share for year but its still not fun to ride a drop down like this. Good luck everyone I with you, I'm not all in but do have some Jan 13 685/700 BCSs I would like to see turn green. I don't trade AAPL stock, but if I did and did it on margin, I would follow the method someone here posted. Be patient, wait for AAPL to fall to the bottom of the Bollinger Band on the 1 year chart(the daily time frame), don't sell until AAPl gets to the upper Bollinger Band, or hold the stock. Good Luck Please remember I am very new to this so this isn't advise but just what I might do if I traded AAPL on margin.
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Post by Apple II+ on Oct 11, 2012 14:08:00 GMT -8
With bull put spreads you can always roll out and up (for a credit!) until AAPL catches up. Correct me if I'm wrong, but I think this is an advantage of bull put spreads over bull call spreads. You can roll up, in the direction AAPL is going, and out to a later expiration, buying time and getting a credit for your trouble. Trying to roll out a BCS for a credit would require moving down your strikes, i.e. opposite where AAPL is going, which is a losing proposition (unless you're pretty bearish on AAPL I guess, in which case why the BCS?). But I'm sure there must be other ways to manage a BCS gone bad...
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Post by wheeles on Oct 11, 2012 14:11:53 GMT -8
You know AAPL is at or near a bottom when almost every other post on Zerohedge mentions how poorly AAPL is doing. Tyler Durden, bitter much?
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Post by wheeles on Oct 11, 2012 14:14:29 GMT -8
... We opened above the daily lower acceleration band, so should see a move to the mid 650s. Then could see a pullback. Not entirely sure how deep that would go. Hmm... well that must go down as the worst prediction of the week. We missed the mid-650s and went straight into tank mode.
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Post by Deleted on Oct 11, 2012 14:16:08 GMT -8
Here's a thought to contemplate for apple at $630 per sahre - apple is continuing to grow earnings, and has a huge cash pile.
fact is, even after taxation issue repatriating money, apple could very easily afford to pay an annual dividend of $60.00 per share, ongoing indefinitley.
Any investment that is capable of returning that sort of money should be worth $1000 at a minimum TODAY.
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Post by lovemyipad on Oct 11, 2012 14:21:19 GMT -8
From a pure psychology point of view, our current situation feels like June 2011 when we were all incredulous that the stock had dropped to 315 or so. It was a good thing that many posters could not access a handy razor blade back then. We all know what happened shortly afterwards. So, SO true! I keep thinking: this happens once every quarter. Every quarter, without fail. Some are worse than others, but no quarter -- since I've been paying attention (JAN'11) -- doesn't have a stretch where we experience exactly what is meant by the phrase: "the market can stay irrational longer than you can stay solvent." Ted had another great analogy the other day about standing on the shore and getting upset about the tide going out. The fact is, this isn't new. This is the reality of how this stock trades in the short-term. We can point to this, that, or the other in the news to attempt to explain it, but to me it's purely cyclical. Money rotates in...money rotates out. No matter how solidly we beat earnings, how much cash we accumulate, how high the stock price climbs, there comes a time -- no rhyme or reason necessary -- where we temporarily give a good chunk of it back. And it is ALWAYS temporary. Always short-term. So we only get burned if we play with fire: short-term options or margin. I don't know how many times others have experienced this, but this is my 6-7th WTF sale. And because (until this quarter!) I'm inevitably holding front-month options when the "f-ing dip that keeps dipping" comes along, that's about 5-6 times I've had my short-term clock cleaned. Each time I say: when will I learn?! And I swear: never again -- again!! I think prematurely parting company with those OCT'12 650 calls pissed me off enough to finally, FINALLY navigate this downwave better than the previous ones. So: we've been here before, and we'll be here again. Just as we will rocket another 100-300 points without stopping again -- and flip the bird to all those premature top-callers!
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Post by lovemyipad on Oct 11, 2012 14:56:19 GMT -8
Excellent, as always! Thank you for the link!
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Post by Deleted on Oct 11, 2012 15:01:09 GMT -8
so APVIX is High, share price is very depressed, is this a good tiime to sell some puts?
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Post by lovemyipad on Oct 11, 2012 15:05:03 GMT -8
With bull put spreads you can always roll out and up (for a credit!) until AAPL catches up. Correct me if I'm wrong, but I think this is an advantage of bull put spreads over bull call spreads. You can roll up, in the direction AAPL is going, and out to a later expiration, buying time and getting a credit for your trouble. Trying to roll out a BCS for a credit would require moving down your strikes, i.e. opposite where AAPL is going, which is a losing proposition (unless you're pretty bearish on AAPL I guess, in which case why the BCS?). But I'm sure there must be other ways to manage a BCS gone bad... Numbers should work out the same with both bull spreads?
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Post by lovemyipad on Oct 11, 2012 15:05:42 GMT -8
so APVIX is High, share price is very depressed, is this a good tiime to sell some puts? IMHO, yes.
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Post by Deleted on Oct 11, 2012 15:07:40 GMT -8
so APVIX is High, share price is very depressed, is this a good tiime to sell some puts? IMHO, yes. thanks for the comment.
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Mav
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Post by Mav on Oct 11, 2012 15:21:11 GMT -8
Excellent, as always! Thank you for the link! Very, very good analysis. If we get to the 200-day somehow, I'm going to Tier 2 right off the bat. Though in all honesty, it'd be surprising to me to see another 120-point correction because the most recent upwave was nothing like the 420 or whatever to 644 run. I'll just keep watching the action. I may try a small 100-day SMA bounce bet if AAPL hovers around 620 but holds. If Apple "disappoints" at earnings and there's a drop - I think we have our long-term buy/capitulation point somewhere around that time.
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Post by appledoc on Oct 11, 2012 16:16:22 GMT -8
Patience all. Don't panic. Load up if you can. Fundamentals have not changed.
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Post by rutgersguy92 on Oct 11, 2012 16:38:44 GMT -8
Though in all honesty, it'd be surprising to me to see another 120-point correction because the most recent upwave was nothing like the 420 or whatever to 644 run. I'll just keep watching the action. I may try a small 100-day SMA bounce bet if AAPL hovers around 620 but holds. I agree. There was nothing parabolic about the run-up from 580 to 705 over two months, compared to the 430 to 644 run-up over slightly less than 3 months. In fact, Amazon's recent run (forget the numbers, but I calculated this last week) was more parabolic than Apple's 1Q run, and yet nobody (even Elder) is saying jack squat about it. Still, I'm planning for at least a dip to 600 - this would be a 15% correction - so I'm not floored by it when it happens. An 18% drop, which we had in May, would get us to 580, which would be a 125 point drop. But Redler was saying we have a number of converging supports at 620, and the next would be about 611, so hopefully these hold.
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Mav
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Post by Mav on Oct 11, 2012 17:21:50 GMT -8
Redler also wondered if SMA-100 would hold on a second "revisit" so soon. SMA-100 was never actually touched, but I think Redler's instincts are right as far as it being "close enough" and just seeing AAPL's price action lately.
I will watch the 620s as closely as I can. I'd prefer AAPL at least consolidate right around here, but AAPL story + bears fresh off their bear raid high (hey, it was a good day for them) trying to keep pressing plus H&S watchers = it'll be a fight for the bulls tomorrow, IMHO. It'd also be a great spot for the bears to run into a wall...so we'll see.
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Post by Apple II+ on Oct 11, 2012 17:39:38 GMT -8
so APVIX is High, share price is very depressed, is this a good tiime to sell some puts? Yes. Or open bull put spreads.
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Post by terps530 on Oct 11, 2012 20:10:25 GMT -8
The things I would do to know the closing price on a Friday ahead of time... Instant millionaire from weeklies! Time to dream about it- nighto
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