Monday, 04/29/13: $430.12

[appledoc]

Apr 29, 2013 6:10:38 GMT -8 podboy said:

I wouldn't say MEANINGLESS doc. I mean you have to go up to get above the downtrend right?

But are you trying to catch the exact bottom or get a safe entry for the next move up? For me, the safety of buying in at 450 during a confirmed wave up trumps the profit I'm missing out on from 420 to 450. Remember, we are talking about the next wave taking us above 800, which is good for almost a DOUBLE.

What good did the run up from 505 to 594 do for long term investors? Nothing. Really, it just suckered panicked buyers in (like myself) who didn't want to miss the next big move.

[appledoc]

And just so I'm not misunderstood, I am encouraged by the price action. Just need to see this 5-10 points from now to get me really excited.

[Deleted]

Apr 29, 2013 4:05:55 GMT -8 lovemyipad said:

Gregg:

Rule of thumb: if it's NOT faded in first 90 minutes, then expect continuation.

Does this count: up $10+ at 10:41 AM

It never even tried to challenge the gap.

[Deleted]

Volume is actually not that strong.

[podboy]

Really, looks to me that the volume is quite strong. Double the average so far.

[terps530]

arent we at the level where we people said they were going to sell, because we are going to top out and then go back down to make a new bottom. then get back in? or has that changed?

[tuffett]

On the topic of selling puts from the weekend thread:

In my opinion it makes complete sense for Apple to do this. If the puts get assigned, it simply becomes part of their buyback allotment. If they expire, it becomes a huge return on capital. Spread some out over the next few months as well as some 2014 and 2015 and you have either a potential buyback at known amounts or simply a great return on your capital that is otherwise doing nothing.

As an example, a $400 APR 2014 put will net about $4,000 or 10%. So Apple either gets a 10% return or they get to buy their shares back at an equivalent price of $360, a year from now and $60 lower than where we sit right now.

It seems too obvious and attractive to not be done. Does anybody know definitively if corporations are allowed to play the options market like this on their own stock?

[appledoc]

Apr 29, 2013 7:00:51 GMT -8 terps530 said:

arent we at the level where we people said they were going to sell, because we are going to top out and then go back down to make a new bottom. then get back in? or has that changed?

I said that.

Here's my favorite count



We're pretty damn close to the make or break point. I'm not in the guessing game anymore. I'll wait for confirmation before I make my move. I never ruled out 385 being the bottom, just didn't think it was likely. We're about to find out if I was right (and I'd rather be wrong, makes life easier).

[Deleted]

Apr 29, 2013 7:03:33 GMT -8 tuffett said:

On the topic of selling puts from the weekend thread:

In my opinion it makes complete sense for Apple to do this. If the puts get assigned, it simply becomes part of their buyback allotment. If they expire, it becomes a huge return on capital. Spread some out over the next few months as well as some 2014 and 2015 and you have either a potential buyback at known amounts or simply a great return on your capital that is otherwise doing nothing.

As an example, a $400 APR 2014 put will net about $4,000 or 10%. So Apple either gets a 10% return or they get to buy their shares back at an equivalent price of $360, a year from now and $60 lower than where we sit right now.

It seems too obvious and attractive to not be done. Does anybody know definitively if corporations are allowed to play the options market like this on their own stock?

I would be surprised if Apple engaged in this, although they have a new hire manning the er, controls here, Luca Maestri, who received 15M in stock options.

It's curious.

[tuffett]

Apr 29, 2013 7:28:16 GMT -8 marcellus said:

Apr 29, 2013 7:03:33 GMT -8 tuffett said:

On the topic of selling puts from the weekend thread:

In my opinion it makes complete sense for Apple to do this. If the puts get assigned, it simply becomes part of their buyback allotment. If they expire, it becomes a huge return on capital. Spread some out over the next few months as well as some 2014 and 2015 and you have either a potential buyback at known amounts or simply a great return on your capital that is otherwise doing nothing.

As an example, a $400 APR 2014 put will net about $4,000 or 10%. So Apple either gets a 10% return or they get to buy their shares back at an equivalent price of $360, a year from now and $60 lower than where we sit right now.

It seems too obvious and attractive to not be done. Does anybody know definitively if corporations are allowed to play the options market like this on their own stock?

I would be surprised if Apple engaged in this, although they have a new hire manning the er, controls here, Luca Maestri, who received 15M in stock options.

It's curious.

If its allowed, why wouldn't they? It would be silly not to as these deflated levels.

If the argument is that not "Apple's style", then I can point to the dividend, large buyback and consideration of taking on debt as proof that Apple is different now, and not set in their old ways.

Think of what a 10% return could be on $50B - over 10% of EPS. It's an unbelievable opportunity, but I have a feeling it's not allowed.

[Deleted]

Apr 29, 2013 7:33:01 GMT -8 tuffett said:

Apr 29, 2013 7:28:16 GMT -8 marcellus said:

I would be surprised if Apple engaged in this, although they have a new hire manning the er, controls here, Luca Maestri, who received 15M in stock options.

It's curious.

If its allowed, why wouldn't they? It would be silly not to as these deflated levels.

If the argument is that not "Apple's style", then I can point to the dividend, large buyback and consideration of taking on debt as proof that Apple is different now, and not set in their old ways.

Think of what a 10% return could be on $50B - over 10% of EPS. It's an unbelievable opportunity, but I have a feeling it's not allowed.

While I think it's an awesome idea, I would hope it's illegal. Imagine the return a company could get! For example, what if Apple knew it was going to miss earnings, so it sold call options against itself, or if it knew it blew out the quarter, buy a ton of ATM calls.

The example you're giving is much more conservative and there's probably nothing wrong with it, but I would say allowing a company to do anything other than buy back it's own shares should be illegal. I would hope anyways

[larrydoyle]

It's allowed, but according to this paper, not the best idea:

www.kellogg.northwestern.edu/faculty/mcdonald/htm/opttax.pdf

[mace]

Apr 29, 2013 7:03:33 GMT -8 tuffett said:

On the topic of selling puts from the weekend thread:

In my opinion it makes complete sense for Apple to do this. If the puts get assigned, it simply becomes part of their buyback allotment. If they expire, it becomes a huge return on capital. Spread some out over the next few months as well as some 2014 and 2015 and you have either a potential buyback at known amounts or simply a great return on your capital that is otherwise doing nothing.

As an example, a $400 APR 2014 put will net about $4,000 or 10%. So Apple either gets a 10% return or they get to buy their shares back at an equivalent price of $360, a year from now and $60 lower than where we sit right now.

It seems too obvious and attractive to not be done. Does anybody know definitively if corporations are allowed to play the options market like this on their own stock?

You're right about selling puts but I recall reading somewhere no Apple badges including Apple Inc can engage in derivatives.

[Deleted]

Apr 29, 2013 7:00:51 GMT -8 terps530 said:

arent we at the level where we people said they were going to sell, because we are going to top out and then go back down to make a new bottom. then get back in? or has that changed?

I don't like this feeling. I WANT to believe this is the long awaited breakout, but I've been down this road a couple of times, only to discover its an expensive dead end.

What are others feeling?

[mace]

Apple recovered the losses due to CRUS's early forecasts. Should be on the way to challenge 50-day SMA/EMA. Since the downtrend, only capturing the SMA/EMA once in late Mar but stopped by the ichimoku cloud. Hope it would do better this time.

[gtrplyr]

Google glasses demo on CNBC .... Utterly moronic.

I would think there is potential but this makes no sense .... they have a long way to go on these.

[mace]

Apr 29, 2013 7:52:56 GMT -8 @greggthurman said:

Apr 29, 2013 7:00:51 GMT -8 terps530 said:

arent we at the level where we people said they were going to sell, because we are going to top out and then go back down to make a new bottom. then get back in? or has that changed?

I don't like this feeling. I WANT to believe this is the long awaited breakout, but I've been down this road a couple of times, only to discover its an expensive dead end.

What are others feeling?

Previously is slope of hope, now is wall of worry. Good for the soul.

[Deleted]

Apr 29, 2013 7:28:16 GMT -8 marcellus said:

Apr 29, 2013 7:03:33 GMT -8 tuffett said:

On the topic of selling puts from the weekend thread:

In my opinion it makes complete sense for Apple to do this. If the puts get assigned, it simply becomes part of their buyback allotment. If they expire, it becomes a huge return on capital. Spread some out over the next few months as well as some 2014 and 2015 and you have either a potential buyback at known amounts or simply a great return on your capital that is otherwise doing nothing.

As an example, a $400 APR 2014 put will net about $4,000 or 10%. So Apple either gets a 10% return or they get to buy their shares back at an equivalent price of $360, a year from now and $60 lower than where we sit right now.

It seems too obvious and attractive to not be done. Does anybody know definitively if corporations are allowed to play the options market like this on their own stock?

I would be surprised if Apple engaged in this, although they have a new hire manning the er, controls here, Luca Maestri, who received 15M in stock options.

It's curious.

MSFT did this extensively during the late '90s to smooth the ups and downs of earnings. If they felt earnings were going to be a little flat they would Close positions. They would also book deferred sales (as needed). GAAP was pretty flexible in their hands.

[jmolloy]

Apr 29, 2013 7:55:06 GMT -8 gtrplyr said:

Google glasses demo on CNBC .... Utterly moronic.

I would think there is potential but this makes no sense .... they have a long way to go on these.

That is the point, really. Apple was working on the iPad since 2003 and we never saw it until 2010. Google hype something and the world and his dog are beta testers. Look how long it took Android to get something resembling smooth scrolling on the devices. 5 software updates and 3 or so years of chip development.

[terps530]

thanks doc- i follow now

Apr 29, 2013 7:52:56 GMT -8 @greggthurman said:

Apr 29, 2013 7:00:51 GMT -8 terps530 said:

arent we at the level where we people said they were going to sell, because we are going to top out and then go back down to make a new bottom. then get back in? or has that changed?

I don't like this feeling. I WANT to believe this is the long awaited breakout, but I've been down this road a couple of times, only to discover its an expensive dead end.

What are others feeling?

i feel good. i've felt good since earnings and never had any panic feelings when we dipped under 400 here or there (like I would have previously). I think part of it is that I don't have the funds to buy anything else now (thus the temptation is limited). I have gotten fooled going in too early on these mini-runs at least 3 times now, so I'm a bad judge, but regardless I like this one.

other than june 430/440 which I got just before earnings, my remaining positions are in 2014 and beyond, so i also feel less anxious due to that.

edit: also holding this 430 level by end of day i think would be amazing.

[moltenfire]

The daily graph looks like a rocket, is the buyback really that much of a factor?

[frqntflr]

i shouldn't be surprised by this, still something to see it in the WSJ ... Stock Analysts Tell All!

blogs.wsj.com/moneybeat/2013/04/25/stock-analysts-tell-all/

found the link on Dalrymple's loopinsight.com

[Mav]

Now this? THIS is a pro gap...candidate.

Very nice green day so far!

[Mav]

Well, $50B >> $10B. And biggest buyback in history.

$100B in capital allocation and leveraging the debt market to its advantage = incredibly bold moves by Apple. Luca Maestri (if this keeps up, Maestr(o)?) may be quite the factor here.

[Red Shirted Ensign]

Apr 29, 2013 8:13:06 GMT -8 moltenfire said:

The daily graph looks like a rocket, is the buyback really that much of a factor?

The buyback and the means by which it may be utilized has changed the game...IMHO.

Last Friday was an eye-opener, as Apple finally blew through pinning efforts at two likely levels, on very good volume. If the years long game of pin the price on weeklies won't be tolerated by Apple any more (and they can certainly exercise their 50 billion dollar sledge hammer on such a goal), then suddenly buyers and sellers, option writers and others need to look at things a bit differently.

So, think of Apple's buyback power as a nuclear arsenal, capable of being used to influence events. And, as with nukes, sometimes just the threat of use is all that is needed to change attitudes.

[staralpha]

On a technical view, 421 was ignored this morning, 50 SMA @ 433.34. Getting close to that level right now.

www.barchart.com/cheatsheet.php?sym=AAPL

I bought a 430 weekly this morning at around 422. I held longer than my plan was, but now not sure where my exit point is. Don't know if I want to try to see it go past 433 or get out and sit pretty the rest of the day.

[Mav]

Nukes tend to be able to annihilate the world several times over. Not sure about MAD and buying AAPL.

Why not just say Apple can Buy the Oceanic Trench, not just the Dip?

[Mav]

420 may be a tradable floor level.

Pro Gap Day may portend better things for a not-overvalued, massively oversold stock.

Daily MACD-h was a signal but the followthrough was extremely strong. I really have to recalibrate on a day like this but at first glance it certainly looks like AAPL _could_ have continuation over the low/mid 430s0 eventually, just don't know if it's 2-3 weeks or tomorrow. ;D

[Mav]

AAPL doesn't have to break the SMA-50 daily on the first try (though it did, briefly). The micro uptrend seems to be gaining steam, really.

Not trading AAPL as much as I "should have" (luckily, having risky OTM butterflies "helps" in this specific situation), and I may be too pro-AAPL for my own good, but I'm thinking resistance at 430/433 currently has higher odds of bull flag/rest stop over nasty correction/H&S trigger.

[staralpha]

Seeing the possibilities of the noontime reversal. No more being greedy.

3x 430 May 3 Call In @ 2.15, Out @ 7.05.