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1. The Bullish Cross Apple Model Portfolio
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THE LIVE BLOG 9:30 AM – 4:00 PM

3:35 AM — So as I was explaining yesterday, I think there is a fair chance that we had seen the bottom in Apple. And no I haven’t called the bottom a zillion times so don’t throw insults unless you get your facts straight. When you call a bottom it’s a probability event in the first place. I making the call based on the evidence I have in front of me. If the evidence doesn’t work, there is nothing I can do about that. I can only present you the evidence and give you the probability. And the evidence is pretty convincing. Now first, let’s review the previous candidates and go through why they did’t work and why this set-up is solid.

The first clear-cut attempt of Apple to bottom was at $623 a share. The stock triple-bottomed, set-up a w-recovery, $647 was the breakout point, $652 was confirmation and the stock went through the motions but failed to hold $652. The set-up was near perfect, but the bears overwhelmed and the selling won out. That was attempt #1.

Attempt #2 was when Apple hit $609 a share that one Friday. On the following Monday it set-up a bullish engulfing candlestick. Things looked good until Tim Cook decided to open his big fat mouth regarding iPad sales. I actually believe that if it weren’t for Apple introducing the iPad 4 when they did, Apple may be sitting at $650 a share right now. If Apple didn’t allow the iPad inventory to draw down ahead of the iPad 4 launch, the sell-through number would have been more apparent to the idiots on the street and the stock would be performing a lot better now. But attempt #2 failed with the iPad Mini launch where it was learned that Apple would artificially miss their iPad numbers on the quarter. Ok. No biggie.

Attempt #3 was at $576 a share. At $576, Apple fell $10.00 under the 200-day moving average and hit a 30 RSI for the first time in its history. That was the third good set-up for a bottom. We posted that weekend report in support of Apple bottoming there. It didn’t work. The selling got nasty thinks to Rockendale Fail Brokerage House.

Attempt #4 is now. First, we had Apple hit those intense extremes last Thursday which sort of stopped the bleeding quite a bit. Even though Apple is technically speaking a tad bit lower than where it closed last Thursday, what you should realize is that the absolute hemorrhaging stopped. Even yesterday’s losses hasn’t quite set substantially lower lows than the lows we set last Thursday at $533 a share. Sure Apple is a few points below that after a whole week. But we’re no longer seeing these $20.00 down days with Apple losing $50.00 a week. What’s more, just for Apple to have lost those $7.00 below last Thursday’s lows, we now have a solid set-up for a bottom. I consider this all one set-up. I consider what we saw between last Thursday and this Thursday part of the same set-up.

And this is not just with Apple, but with the whole market. Look, the previous three set-ups were excellent set-ups. But what we have here is golden. This is a lot different. This is pretty real. What we saw yesterday was nothing short of extraordinary. Apple spent the entire trading sessions under a -4M Chaikin Oscillator. Do you know how long it’s been since that has happened? You have to go back to 2011 during the October 4, 2011 capitulation and the August 2011 crash to see similar events. In both cases, it meant a bottom for Apple in the near-term.

Let me be clear about one thing. If you see Apple bottom here, and then rebound to $650 by mid-to-late December and you are shocked or surprised, then you really have no business in the market. And you definitely have business being in Apple. That result, should not surprise anyone. Period. In fact, that is a very real and distinct possibility. And if Apple is at $650 at the end of December, what do you think it could do between December 31 at $650 and January 19? Just think about that. There is a little more than 6-weeks until the end of December. We’ve seen Apple put up $125.00 in much much shorter time periods than that. Much shorter time-periods.

Apple is more oversold than it’s been in any other correction since the financial crisis. The stock is trading under a 12 P/E ratio for the first time in its history. It is trading below most stocks in the market. It’s trading at a 24 RSi and a a -32M Chaikin Oscillator. It is also trading at under a -4M Chaikin Oscillator on the daily chart.

Do you know how long Apple has been extremely oversold? For 7-sessions. Is that a super long time to be extremely oversold? Definitely not. Not by a long shot. This happens. But do you know what else normally ensues. A huge rebound. Now could that rebound come at session #8 or session #11? Sure. It could get down to a 19 RSI. But I just hope everyone here understands that by far the most likely outcome at the end of all of this is a huge rebound. Apple is likely going to recapture $600 and a lot sooner than you think. That’s the reality here. It isn’t more than a few sessions away from doing so. But every session that it remains extremely oversold feels like an eternity today. But in the annals of history, you will back at this period and say, duh! The freaking stock was at a 24 RSI. Of course it was going to rebound $150.00. What the hell else did anyone expect? Except right now, I know that at least 80% of you don’t expect that. Ok. Let’s see what happens. Let’s see what this will look like. This is what I think what our future selves will see and it will be obvious in retrospect to all of you. Obvious to me and a few others today:

Apple is sitting at a 24.6 RSI. Don’t come back and say it wasn’t obvious. Because today I’m telling you it is and many of you are saying and thinking this is mumbo jumbo. Yeah. We will see. Apple is at a 24.6 RSI, what else did you think was going to happen? This was so freaking obvoius. That is the statement that I will cut, copy and paste at the end of December.

Apple is sitting at a -32 Chaikin Oscillator on the daily chart. What else did you think was going to happen?

Now let’s think about the chain of events that I think will soon transpire that could very well reverse the sentiment and kick-off a rally. As I explained earlier, for Apple, the key line of resistance is $555.00 a share. If Apple pushes above that, there is a clear-cut path up to $600 a share. So the question now becomes, how does Apple get up to $555 a share? Because once Apple makes it back up to $600, it can work its way to $650. And if it can work its way to $650, then we’re all home free. But let’s not get ahead of ourselves. First, let’s think about why $555.00 now. Here’s why I think we will see a rebound up to $555 now. I believe the near-term indicators have clearly gone too extreme. The 60M Chaikin Oscillator yesterday got far too extreme. It got to the same extreme levels we saw at some pinnacle bottoms in Apple’s history. We’ve only see a -6M on the hourly a handful of times ever. And all lead to a $50+ rebound IMMEDIATELY. Over the past two-years, there have only been a total of five cases. None in 2012 and four cases in 2011. Each event in 2011 lead to an immediate bottom and an immediate powerful rebound off the lows. See below:

Now as we also explained earlier yesterday, during this very correction, there were five other instances where Apple fell to a -4M ChiOsc on the 60M time-frame, and in each case it immediately preceded a $23 to $30 rebound. Well that’s a key part of the overall bottoming process here. Take a look below:

Now here is why I think a $20-$30 rebound could spark a larger rally in Apple. I think one of two things could happen as a result of this. First, if the rebound is large enough, Apple could break through the $555 level and immediately break the downtrend line. If that happens, I think the rally begins and we get some huge follow through in a v-lead recovery. That’s one possible outcome. The other possible set-up could be an inverted head & shoulders set-up. I’ll show both below. Both are based on an initial rebound as a result of the oversold near-term Chaikin Oscillator:

Scenario #1: In scenario #1, Apple’s near-term rebound off of near-term oversold conditions can end-up pushing Apple through $555 resistance which could in turn lead to a spark of momentum which could finally kick-off the v-recovery. See below:

Scenario #2: In scenario #2, Apple could hit a pinnacle low at some point today, rebound up to that $555 resistance area, come back down to test the $535 area, form an inverted head & shoulders bottom, break-out of the bottoming pattern and then be off to the races. That’s a second potential outcome. See below:

So that is how I think things will unfold from here. Why? Because Apple is now not only extremely oversold on the daily chart which would indicate that an epic rally of significant proportions is sitting right at the horizon, but because I think the near-term now also suggests that a big rally is just about to ensue. We’re talking mere hours now. Not days. But hours.

What about Bob? Do you mean the market? Yes. The market. Ok. Well let’s talk about the broader market. We’re seeing the same things here. First, we have the NYSE McClellan Oscillator which hit some extremes yesterday. Those extremes I think hint at a broader market rebound is in the works. See below:

Why else do yo think we’re taking some big long positions in the SPY. For the hell of it? The SPY is extremely oversold too. We’re at a 27.53 RSI on the SPY for Pete’s Sake. That and the $NYMO is now sitting at -92.31. that’s a low level. That’s a level that suggests a solid hard-core rebound is in the cards. A rebound that I think could spark something big with Apple.

Finally, take a look at the NASDAQ-100. It’s full-oversold mode now too. At a 26.15 RSI, it matches previous correction low-points. I think this is it. We have a -92 $NYMO, the SPY and QQQ are well under a 30-RSI and Apple is testing its May lows. What else do you want as evidence that things are very likely at their low points? Really what else can I give you? Please be rational human beings here. I think the chances that Apple rebounds up to $650 before the close of December is very high. And such an event will cause the $655 – $705 spreads to go up 1000% or more from here. So just. I don’t know what else to tell you. I just laid out my case. It’s all there. Read it very closely if you need to. But this is my case. This is the reason I’m holding my spreads. This is the reason I think Apple is about to rebound.

It’s easy to dismiss everything we’ve discussed since Apple was at $623 and the different set-ups. But I think you would do yourself a monumental disservice if you dismiss it off hand. Does it suck that Apple’s $623 bottom set-up didnt’ work out and that the bullish engulfing candlestick failed and that $576 ultimately got puked on? Sure. Is that a reason to completely abandon the discipline?

I dont’ know. Let’s see shall we. The NASDAQ-100 has hit a 30 RSI a total of 7-times over the past three years not including now. Do you know how many times that DIDN’T constitute a bottom and precede a 10%+ rebound? ZERO. NEVER. It’s 7-for-7. If I move the chart further back, it’s probably higher. Do you know how many times Apple, the SPY, the QQQ, the Dow, the NASDAQ and pretty much everything else in-between didn’t go from oversold directly to overbought? Never. Every instance where we got oversold, it ended up leading to the subject going complete overbought.

It’s elastic. The deeper the seller, the bigger the recovery. Don’t be the person who allows the Apple recovery to catch you off guard. It’s soon going to happen. And when it does it will be brutal, it will be unforgiving and it will be unrelenting. Some of you who are beginning Apple to rebound will soon be beginning Apple to stop going up. That is a certainty. That is a certainty. I said it twice. That is a certainty. That’s three times. You will be beginning the stock to stop going up. And after a $5.00 pull-back which gives you hope that you might be able to get back in, it will drive up $100 in 7-trading sessions. That’s what’s in store for the future. Use common sense. People like to say what if this time is different. Well what if this time isn’t different? Have you ever just sat back for a moment and asked yourself that. Apple is at a 24 RSI. What if this time is not different. What are the ramifications of Apple going so deeply oversold. I can tell you this. The ramifications is going to be the biggest rip-your-face-off rally you’ve ever seen in Apple. It will make the parabolic rally in January look like a boring up day. That would be the equal and opposite response.

Now for those of you who can’t help but think this time is different, one good strategy to consider is this. The $900 – $1000 spread is trading at near $2.00 a contract. If one were to sell their $655 – $705 at $1.00 and buy the $900 – $1000 at $2.00, the result would be the same. Apple going to $1000 by January 2014 = Apple going to $705 by January 2013. It’s the same exact outcome. So that could very well be a way to recover. I’ll cover the merits of that this weekend.

12:09 PM — talked to key trader at one of the big three brokerage firms today. Today was stop-loss perpetuated capitulation. We may have a hammer on our hands. If Apple closes above $520, that will be the most positive overall outcome that you can possibly have today. It’s even worth a red close. A huge bullish hammer is promising. The Chaikin Oscillator has also recovered markedly as buyers have finally stepped into the market. If we get a green close today, then I hope experience has taught you what that means.

1:00 PM — Well all I can really say is that I wish the market closed right now. We would be so perfectly set-up. This is such a huge hammer. Now we just need Apple to hold onto the gains for the day. That’s it. If it can close at the highs of the day, then rebound has started. Remember, markets love to capitulate on Friday. A bullish hammer would be excellent. But shit. We have three hours. That’s the concern I have. That and the fact that the Chaikin Oscillator just blew up. So we may have just gotten our +20 but from $505 instead of from $525. Now we the daily oversold conditions to carry us through. The near-term indicators worked. Remember that all the 60M Chaikin Oscillator tells you is that you will get multi-hour +20 rebound. That’s all you can really depend on. Well today we did that get. Apple hit a -6 when it was near $505 and rebounded $25.00. Now we’re going to have to hope that the daily oversold can carry us through to the next move.

Remember, in a lot of ways, its the longer-term daily indicators which lead to the much larger $100+ point moves. It’s the near-term ones that give you the $20-$30 bursts. So this burst was all short-term in nature. Now we need the fact that Apple is at a 24 RSI on the daily to attract buyers. That and we badly need this hammer to hold. Like even now Apple can still mount a fair recovery. But it is starting to run out of time. And this hammer needs to be the start of that. If this hammer does hold and it does kick-off the recovery, then we do have more than enough time to recover. All we need is Apple to be at $650 at the end of December. That would be enough to bail literally everything out. Either that or $620 by mid-December.

1:16 PM — Look at those two green bars. Biggest volume hours since the start of this correction. That was some heavy-ass buying that we just saw. This fizzle we’re seeing now could be the formation of a higher low. If we get a higher low and a higher high, then we’re in business. The market is also sort of pulling back a little here. So it’s putting some pressure on Apple. Today is obviously a key day for Apple all around.

Again, a close above $520 would be great, but a green close even by $0.01 would be the most positive session Apple has had in this entire correction. That would be nothing short of an amazing bullish hammer. It’s still a hammer at $520. But a green close would be icing on the cake. Now let’s take a close look at Apple here on the intraday and see what could be unfolding right now and what we sort of want to see for the rest of the day. I think we could have an inverted head & shoulders set-up going on in the five-minute. It’s not textbook or anything. But it’s there:

This could also just be a pull-back. Remember, Apple just rebound straight up from $505 to $530 a share vertically. That’s a $25.00 move straight up without a pull-back. So this could just be a pull-back and a re-test of the $520 level before moving forward. Whatever this pull-back is, it definitely does bother me a little. And that’s mostly because I want to see momentum shift. I want to see the stock catch a bid. Like the move up to $530 should attract people on the sidelines to say, “holy crap, maybe Apple bottomed and it’s time to buy.”

I’ll tell you this, if Apple does close strong today. Say it’s able to close above $530 a share and that is allowed to simmer over the weekend, I could see a big up on Monday just on people deciding that they want to buy in. They may feel that (1) the stock has taken enough of a beating; (2) it’s obviously undervalued; (3) there’s momentum and (4) the stock putting in a strong hammer might prove that it has bottomed.

And now get this. If Apple does in fact close strong today and then it does have a big up on Monday. Then it’s over. It’s going to attract basically everyone. Everyone will want a piece of this. Because two back to back strong sessions would I think make people believe that the stock has bottomed. Momentum traders will then want a piece of the action and the news cycle will start to get bullish again as the media tries to make sense of why Apple is going up. They will highly all of the good news and brush aside anything that could be potentially negative. Gene Munster and every other analyst will finally be allowed to show up on CNBC and make their bull case and all of a sudden you have a full fledged rally under way. That’s how these things sort of go. That’s why we get v-recoveries. Do you ever wonder why a stock absolutely crashes only to fully regain its value in a v-recovery?

You also have to remember that we are long the SPY for a reason. Remember, we took a 40% position in the SPY in the BC Long-Term Portfolio at $135.90. Mostly because we feel the market has largely at least bottomed if not due for a very large rebound. That goes for the Dow, the SPY and the NASDAQ-100 (QQQ).

4:00 PM — Sorry I was in an important meeting today and will post my comments soon. It’s all positive obviously. Apple has formed a bullish hammer and an ascending triangle to boot. We’re going higher. You can all sleep well this weekend.

4:30 PM — alright so today we got a classic Bullish Hammer. As I noted yesterday, Apple has bottomed. That Chaikin Oscillator can be said to have worked. It worked perfectly fine. It remained oversold for 4-5 hours — which is perfectly normal historically — and then it launched. You could tell it was coming to an end. Remember what I wrote this morning. Don’t come back to me and say that you’re surprised. The stock is extremely oversold. This rally is going to be explosive. You can already tell the sentiment is beginning to shift pretty dramatically and pretty quickly. All of a sudden everyone is coming out saying this is too far, it’s time to buy etc. etc. Once the momentum shifts, you’re going to see Apple hit $600 so fast that your head will spin. And as I explained all week. All we need to happen is for Apple to get to $650 by the end of December and we’re actually home free. Why? Because at $650 near the end of December, our $655 – $705 spreads will be trading near $15 to $20. What’s more, if Apple goes into the month of December at $655, there will be a shot at getting to $700 a share. So the first move we’re going to want to see is Apple push up strong to $600. Once that happens, we just need to battle all December long to end the month at $650. That’s totally doable. You will see.

Look at it in afterhours. It’s making new highs and this is Friday afternoon. People are starting to pile in ahead of the move people are starting to see unfold. What happened to the fiscal cliff and the looming disasters? As I explained yesterday, the $NYMO told us the market has already priced this all in. Now it’s rally time. Watch, Apple will make new highs in afterhours today. You will see fresh new highs in afterhours as people step in ahead of what they know will be a huge rally to $600 next week.

The Chaikin Oscillator on Apple has recovered to -18 from -32. That is hugely important because it finally means that we are in recovery mode. And technically speaking we have positive divergence on the 60M chart too. There are so many positives with Apple right now I can’t even begin to list them. We will talk about it this weekend. Huge Bullish Hammer on the daily chart and we still have forever until January expiration.

If Apple fully recovers to $705 a share by expiration. Two things will happen. (1) I’m leaving the public realm. And (2) I will promptly shut down Bullish Cross. So a run to $705 will be bittersweet. But this correction broke me. I’m done. And there is your new fucking highs as I said in afterhours! Apple has a very good shot at $655 and it has a fair shot at getting back to $705 in a full v-recovery by January expiration. If that happens I’m g/quitting Bullish Cross.

7:35 PM SATURDAY — I’m reading comments of people doubting Apple hitting $1000 a share next year. I even read a comment that says, “$1000 is so far fetched.” “No way it’s going to happen.” “If they traded Apple down to an 11.8 P/E here, then what’s to say we don’t see that next year.”

Look. I know what I’m talking about. It’s just a very very large case to make with so many moving parts. I’m privy to a lot of information that no one here is privy to. Not so much insider info, but there are a lot of moving parts and financial statement analysis that I haven’t had the opportunity to share yet.

Right now, the biggest problem that I see is this. I think that by the time I’m able to get out all of the research to back up that “Apple $1000 in Jan 2014″ claim, it will have been too late for many of you to capitalize on it.

Think about it like this. There are two ways to fully recover what has happened here. That opportunity is there. Apple will see a substantial rebound. When it does, the January 2013 $655 – $705 and $600 – $650 will both be very reasonably priced. Reasonably priced enough for us to be able to sell those positions and then buy January 2014 spreads.

Personally, I think the $900 – $1000 spread presents with the best opportunity for so many reasons. More reasons than I can sit there and state right now. Look think of it this way. Back in June 2011, I knew the $400 – $500 January 2013 spread was money. I also had the time to lay out the base case. And then I spent more time in the coming months fleshing that out.

Even now with this collapse, that spread is still nowhere near danger of closing out of the money. We bought it at $17.20. Apple would need to close this January at $417.20 for that spread to even lose any value at all.

And I know many here are still holding that spread even now. The point I’m making here is this. There is a huge explanation for why analysts missed in Q3 and Q4 (including myself and others) and there is a huge reason Apple wont’ miss in Q1, Q2 and Q3 of next year. And there is even a larger explanation for why Apple is being valued at an 11.8 P/E now while next year it will be valued at 14-15 come the fall of 2013.

Unfortunately for those who don’t have enough faith in me, I don’t have the time to make that case right now. I’m extremely exhausted. And it’s going to take time to build that case for you. I know, Horace knows it very well and a few others I’ve spoken with for several hours about it knows it as well. There is a huge shift that no one here can even begin to imagine is taking place. This sell-off is starting to make more and more and more sense by the day. People are loading up right now for what will be a monster run in Apple.

Right now, you can buy that January 2013 $900 – $1000 spread at $2 to $3. At $600 a share, that spread would probably be worth $5.00. But so will the $655 – $705 spread. One strategy that we may do is sell our January 2013 spreads on the rebound and then go after that $900 – $1000 spread. Thats’ what we may do in the BC Apple Model Portfolio.

In fact, right now, I’m strongly considering splitting the portfolio into two different strategies. The BC Apple Model Portfolio #1 and the BC Apple Model Portfolio #2. In Strategy #1, we wait for a larger recovery that I think may happen. A recovery that might take Apple up to $650. If Apple gets up to $650, the $600 – $650 spread will go for $35 to $40 given the time deterioration helps when you are in the money. The $655 – $705 spread will probably trade near $15 to $20. That’s almost a full recovery. From there, we would then move that spread into the $900 – $1000 or $800 – $900 spread.

You have to think of it this way. We are in a major predicament. There’s no question about it. What do you think is more likely? Apple going to $705 by this January or $1000 by January 2013? On a reasonable rebound, both conclusions will result in the same financial outcome. So for those who believe that $1000 by January 2014 is more likely, then that may be a good way to go. For those that think that $705 in 2013 is more likely, then that might also be a good way to go.

The BC Apple Model #1 and BC Apple Model #2 considers both scenarios. Why? Because I’m sure there are a lot of people here that think the technicals are all Mumbo Jumbo, Mumbo Jumbo, Mumbo Jumbo. So if you believe that’s the case, then maybe dumping the $655 – $705 on a rebound and then transitioning to the $900 – $1000 for Jan 2014 might be the best play. Especially if it results in a full recovery.

Think of it this way. Worst case scenario, it will buy you time for me to lay out the case. As Apple moves higher, so will that spread. Shit if the spread is at $5.00, then Apple merely going to $930 would be a 6-bagger from here. If Apple rebounded to $800 by mid-year, that spread would rise to $35 – $40. So you have to figure that at least it buys you time for us to lay out the case.

What if right now you are thoroughly convinced that it is reckless to think Apple is going to $1000 next year and I present you with information that blows your mind? You are not going to be happy if the $900 – $1000 spread is sitting at $30.00 now right?

Now the other strategy is to bet on Apple hitting $650 by the end of December. If that happens, then you not only will get a full recovery, you will end up being in a position to capitalize on the Apple story. Because Apple at $650 by the end of December = a 15 to 20 bagger from here. At $650 in December, the $900 – $1000 spread will probably be at $7.00. So you would not only fully recover, but probably end-up making a massive gain in the process.

It really all just depends on risk tolerance and belief in the technical story. Because I laid it out for you already. Everything that I published in the last BC Weekly Summary still applies even here. It still all applies. All of it. Apple is still at a 25 RSI on the 14-day. On top of that, it has a gigantic bullish hammer. So can Apple rebound back up to $700 a share by Jan expiration? Definitely. That is a possibility. Can it rebound to $650 by the end of December? Yes. I think Apple has a fair shot at that.

But please allow us time to build our case for why Apple is going to $1000. The biggest mistake you can make is to presume that Apple will trade at a 12 P/E next fall because it traded at a 12 P/E this fall. Huge mistake. The circumstances next fall will be radically different. That’s something I’m fairly sure about. I’ll lay it all out for you. It’s just going to take some time for me to do so.

For the time being, please suspending your preconceived notions about where Apple is headed next year. Just suspend judgment for the time being. Because I’m telling you that most of you here are operating under a certain lack of knowledge that we will make very apparent pretty soon. Just give me the time to do so. This isn’t the best way for that, but unfortunately we may have to fire, aim, shoot given the time constraints.

8:23 PM — Someone just made the statement that the reason you get a 3-bagger in XYZ option is because the probability of that closing in the money is 3-1 against. That statement is ABSOLUTELY not true. Let me repeat. That statement is absolutely not true. This isn’t a vegas casino. There are so many factors at play with spreads. If this were the case, then it means everything if fairly valued at all times. And that’s not the case.

That would be like saying buying Apple at the lows of the financial crisis at $80.00 a share on the bet that it would be at $160 within 5-years means you are taking a bet that is 2-1 against. The chances of Apple being at $160 within 5-years when it was at $80 at the bottom of the financial crisis was 99.999%. I would say 1 in 10000 chance it wouldn’t happen. And it gave you a 100% returns. And I’m being very very generous. It was probably more like 1 in a billion chance given Apple’s financials, where it was positioned in the market, where the market was positioned and the likelihood of the fed introducing QE. That’s what we held a 2-year $230 price-target that was met 16-months later.

Last year in June when we recommended the Apple January 2013 $400 – $500 spread, the spread was trading at $17.40. The odds were not 5.8 to 1 against Apple closing above $500 at expiration this January. So I just want to clarify that.

Assets get undervalued all the time. It’s no different with options. The Apple January 2014 $500 – $600 call-spread is trading at $40.85. That would give you nearly a 150% return. The odds are not less than 2-1 against Apple closing above $600 come January 2014. That’s a lot of nonsense.

Things are a 14-bagger not because the odds are 14-1 against, it’s because the market is undervaluing that asset given that it is attributing today’s sentiment and volatility to a future point in time. The biggest mistake anyone can ever make in investing. And people made that mistake at the bottom of the financial crisis and they are making that same mistake today. A 14-bagger spread today in Apple expiring in 2014 has probably a 75 to 85% chance of success.