Bullish Cross Live


1. The Bullish Cross Apple Model Portfolio
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2. The Bullish Cross SPY Model Portfolio
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3. The Bullish Cross Long-Term Portfolio
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4. The Apple Common Stock Model Portfolio
1. Apple Long-Term Position: 1,175 shares x $451.71 = $530,759.25
2. Apple Trading Position: None.
Cash = $588,326.90
Positions “On Watch” are those positions which we are considering. It doesn’t mean we are taking these positions for sure. We are just entertaining the idea.

1. The Bullish Cross Apple Model Portfolio

2. The Bullish Cross SPY Model Portfolio

3. The Bullish Cross Long-Term Portfolio

4. The Apple Common Stock Model Portfolio
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.

1,569 Responses to Bullish Cross Live

  1. Apple’s (AAPL) VP Sells Nearly $11M in Stock

    Why sell all the way down here?

    • These are sells based on a schedule laid out well in advance

    • When his ex boss left, and he was promoted in August, he got a new grant of 4 times that number of shares.

      Now his ex boss seems to be back and seems to have grown his empire.

      This guy may feel to be in an uncertain position. If he loses the job he may have been better of to sell. And if he keeps the job then it won’t matter if he didn’t get the best possible price.

      I think it’s probably a hedge.

      • Don’t know about you, but if I were Dan at apple, and I was granted 75,000 shares for free, and already had existing options from years of working at apple, exercise 11,000 of my 125,000+ options before end of year doesn’t seem to be a bad idea no matter what he’s feeling. He very likely had them granted at a much lower price than where we are today. Maybe he wants to buy a nice house? But don’t think it indicates much else on its own…

        • And that grant he’s getting are RSUs not option, so very different to an employee….I usually preferred RSUs, since they have vesting largely like options, but are a grant of actual shares, with time based selling restrictions…

      • I know Dan. Let’s just say the “hedge” theory is way off base. He’s very secure in his role and has been one of the top 100 executives at Apple dating all the way back to Steve’s return in the early 2000s. He is probably overflowing in Apple exposure. And as a named executive, he has to pre-arrange his trades well in advance per SEC rules.

        Translation: think nothing of it.

  2. This guy called the crash pretty dead on.


    He is now screaming for shorts to cover. Posted it like 6 times in a row. Says stock will test 644 SOON.

    • Certainly is….how good has he been with his other calls?

      • Not good in predictions. Example from Oct 25. Quoting.
        By stockspy1 . Oct 25, 2012 10:16 AM . Permalink
        as last opportunity to milk from AAPL.”

  3. From Cobra:

    “AAPL is the king of everything, believe me, while gold or oil or anything else cannot stand the inflation but iPad will, at least iPhone would, so maybe AAPL is above all the law, not even the law of inertia could apply. But I’m just an ordinary guy, so I’d have to say that N O R M A L L Y, this rebound shall fail, most likely there’d be a new low ahead. At least at least at least (skip 100 more at least here), there’d be another attempt to make a new low although only makes a higher low. Why? See the bottom of the chart, we have a RSI new low here indicating the down momentum is strong therefore according to the “a forward accelerating car cannot be reversed all of sudden without being slowing down first” theory, a RSI positive divergence is needed before a bottom of some kind is possible. To make you understand what I mean positive divergence, I’ve also posted a past chart showing how AAPL was bottomed with RSI positive divergence.”

    • Bummer:-(

    • Actually its a very qualified statement, but sounds positive to me…

    • We need for AAPL to behave normally, which a retest would do that, there is still plenty of time and the hammer has been thrown. Maybe up Monday then a reversal Tuesday and Wednesday then up big Friday, enough to put a final nail in the coffin. That’s timing I could like!

  4. Can someone help me with TOS chart settings? I’m looking to replicate the charts AZ posts on a daily basis. I’d like to try and figure out how to read them and compare with AZ’s analysis. Any advice would help!



  5. Andy,
    I wanted to add my hope that you do not quit and close down BC. As a new member I always look forward to your excellent analysis and comment. Although I do not post much I do read some of the comment posted, I find some of it to be very insightful. As of late some comments have been of very poor taste and can be classified as desperate. Although I feel for the posters who have watched their portfolio drop by huge amounts, some have not followed your thinking and have made short term bets that have gotten wrecked. Those posters that are not following BC rules should be thrown off and not take time away from you or the legitimate members of BC. My hope is you will guild us through next year or two and then maybe transition to a SPY option portfolio as our main moneymaker.

    Recently you have said that AAPL has one or two years left and that you have thought of a better trading system based on timed trades based on PE range. Although you never outlined it fully you said you will once we get out of the January 13 options and transition to Jan 14 options. It is my hope that you see it within your wisdom to do this. I would like to quote to you from the Optimist Creed. “Forget the mistakes of the past and press on to the greater achievements of the future” This has sustained me for many years, hopefully it will for you too. http://www.optimist.org/e/creed.cfm

  6. If I was AZ I too would think about quitting. After losing 85% of the funds in BC with his advice…with that kind of performance when the stock is up over 30%…yeah I would seriously think about quitting. I don’t blame AZ one bit. Why get others hurt if you don’t have a strategy that can withstand a 3 month correction.

    If I was AZ and I was to continue, I would totally revamp the investment strategy so that the entire funds are not at risk if the stock has a bad 2-3-4 month stretch. The current BC strategy is extremely high risk…what I call Kamikazee strategy…even if it works 3 out of 4….in 1 out of 4 situations you get totally wiped out. I’d focus on 1 year and 2 year options and be trading out of them once or twice a year and rolling over to the following years as time dwindles away.

    I’ve heard Andy say a few times…the goals was to double your account balance every year…aim for that….taking the positions we did were aiming for 3 or 4 or 5 times our account balances., maybe more…now many here and AZ seems to be advocating going for 10-20 baggers for next year.

    This is pure gambling….I’m looking to invest. Longer term investing. And if I do get mostly wiped out….its over 3-4 years of failed strategy, not some approach that can wiped off the map if we have a 3 month downswing. Lots of lessons here. The real questions here is are you a gambler or are you a long term investor. From the blog this year and AZ’s strategy, I would say the vast majority are the former. I’ve been influenced to take gambles far more than I’d hoped.

    As an example…the previous year…I had 7 figures…doubled that balance…stock went on a correction, I got knocked down 50% down to my original investment at the low…not so bad…my strategy was better than the BC strategy, because I did not hold a ton of options that expired in a few months…I mostly had leaps. I can handle the fluctuations without getting wiped out.

    So I am looking forward to surrounding myself with far more conservatives and what I consider realistic risks. I still think its possible to get a double each year with options…and maybe more with a little luck…but one needs FAR more discipline. And a strategy that does not depend so heavily on historical trends that often may not be true…one can backtest any strategy that looks great on paper…this is largely the BC approach…it’s not a bad approach….but I’d guess we will continue to see patterns broken as the market adjusts to this knowledge and new situations.

    Anyway, I don’t pretend to have all the answers…just the answers for myself. To each his own.

    • Jim Sheppeck (squinky)

      Then why the hell are you here if BC is too risky for you and you’ve already figured out some Leaps strategy that you like?

      • My 1 year membership ends in February. My Jan-Feb options expire soon enough and I will transition to a new strategy that is much better for me. It’s not personal. I like Andy and the info he dispenses. I don’t like the calls and portfolio choices he’s made. I’ve just come to the conclusion that the BC strategy is not one I believe in anymore. Too much focus on short term…what I call gambles not investments. Can’t really argue with BC’s -85% results where stock is up 30% since Feb 2012 (when I joined) and than half the trades failed.

        I don’t mean to dissuade anyone else from following the BC strategy. It may work great for you. Not giving any advice. Just sharing my own realization that I have a much better that is more right for me.

    • Shaun Abraham (renjixb)


      a lot of subs (myself incl) did roll over at huge losses into leaps that technically would return back the balance (all 700-800 spreads return x8-10 from 522 and below).

      are you saying we cash out of those leaps with 60-70% possible profit in july-sept, wait for a correction to 13.x p/e and buy a jan 2015 call spread?

      • Not giving any advice. I just know that I will be rolling over into less aggressive spreads at the right time for me. And new money that I invest will be done more conservatively than what I believe BC will advocate. Need more conservative influences. I can’t believe I found a board that is more aggressive than me! By the way, in case anyone is wondering, I went into this with my eyes wide open and understand every trade I made. No one’s fault but my own. And now I have to change my influences…to help stay more focused on what is productive…in my opinion.

    • IIRC, sboyland purchased November 650-700 call spreads just as the correction was starting to pick up steam. That had to hurt. Nevertheless, his broader point is correct – a more conservative approach would be useful and we should avoid getting caught up in our own greed.

      • That is true…I did make a relatively small bet in the Nov 650-700 spreads…but that was a small pittance compared to what I had and have in Jan – Feb options for 2013. I don’t mind risking a very small percentage on a short term option, but the vast majority of my money…80-90% will be invested in long term spreads probably just less than 1-2 year spreads.

        • More like 90-95%…excuse me!

          • Responding to this stream a little late. Sboyland–seems like you are maturing. Have read no less than a thousand of you entries and I am glad to hear it. If I remember correctly you once stated you had a very nice 7 figure nest egg. Options are a quick way to make and lose money. Pride comes before the fall. As a strayed away from my own very conservative strategies and portfolio management , I failed miserably. It cost me dearly. Slow and steady wins the race Will look forward to reading your future posts to see if you can change your strategies to a more conservative one. All the best …

            • Thanks PD. I’m still in the game, but I hope to be in a much more conservative investment in the next 2-3 months and ignore any kind of short term strategies. I haven’t decided if I will renew my membership. I do like Andy even and some of tech information he shares. I hope he learns something constructive from this especially about allocation and perhaps the language he uses to express himself when he uses absolute terms to describe things. Would avoid a ton of issues and make his life and business better. He’s very smart and has a ton of natural potential. More than most. I think if he tempers the risk a bit and diversifies positions he will do fine.

              I guess I say this all, because I’ve learned a lot from him…some real good stuff about spreads…and for that I owe him a thanks. It was my choice to push the risk to extremes and be influences here. I will be here for at least another 2 months or so.

              No hard feelings for anyone here…even the hard core gamblers! Just not my style as I’m too risky on my own! Looking to temper that.

              • I wish you’d just be looking to temper your commenting.

                You haven’t added anything constructive or said anything different over your last 970 postings…

    • Great post…if the community has to thrive and be together long term, we need to be open to constructive criticism – Andy is a big boy and can handle that for sure so I am not worried about him quitting. I still firmly believe that this crash was predicated by huge Jan OI which was significantly contributed by BC and BCRAM…whether it is the MMs or hedge funds on the other side or those contracts, there are clearly big players who had the power/influence to introduce panic. Even if this stock does get there to 705 on Jan exp, I would bet that most of this community would have given up on Jan positions somewhere in 620-650 area because there will be enough doubts along the way…if it had bottomed in 580 area, that wouldn’t have been the case…bottom line is liquidity is an issue in option market and earlier in the year AZ had suggested that he would have to shut the portfolio down in a year or so due to that…I think we got there lot sooner and didn’t realize it along the way…there is still a lot of value in AZ’s BC service…it does need a tweak next year..both risk management and diversification of subs’ buying power are key issues that need to be addressed if we all survive this mess…I am still keeping fingers crossed as there is a long long way to go…

      • I don’t know if this will be constructive — how about we talk through our strategies.

        Based on what I learned from Andy during the 10-bagger era, and the initial buy and coma era:

        I’m 75% in Jan13, 25% Jan14. Jan 13 – I positioned myself mostly in 3 tranches, 550-600 (50%),600-650(30%),655-705(20%). My BEP for Jan13 is $600. I thought this was a conservative approach — I would be fine losing the 655-705 outright.

        • Shaun Abraham (renjixb)

          While those are great positions for starting out I think he’s talking about selling them and waiting for a 13.X p/e correction & thrn rolling them over to ljan14 leaps as jan13 became the front month qtrly opex.

          Of course in this case it was hard…aapl ran ahead of itself before oct earning and then hit 600 on earnings. I’d figure in a normal year we’d sell around sept-oct, wait for a correction and buy leaps on a conservative ttm p/e target.

          • I think “buy and coma” caused me to ignore the technicals because I was just going to “weather the storm.” We may very well expire ITM, which will be a +1 for the “buy and coma” strategy, but I can’t help but think my “weather the storm” mentality caused me to ignore the short term technicals — and let’s be honest, we would have made a killing trading out of the positions > $680 and buying back in at <$550. I'm not going to pretend that I would have been smart enough for that trade without the benefit of hindsight. I was not agile enough this round.

  7. ANDY…LOOK AT YOU , DUDE!!!! Now put down that crackpipe and take a hard look at the last paragraph of your 4:30 post! Yeah…that wasn’t really you, was it??? Redeem yourself and rewrite that bitch. We know you have two balls and neither one is crystal.
    Hoping for AAPL at 705 plus with several pages of “I TOOOOOLD YOU SOOOO BITCHES!!!

  8. Sboyland and bulltrade you have learned nothing from being here … Andy stresses long term leaps… You lost your asses by putting to much into short-term spreads and panic bailing at the bottom. If you were here from the beginning we have been through a correction just a bad before and Andy handheld everybody through it. We’re all in the same boat here and your criticism of Andy is not correct . Grow up be men and take responsibility for your own trading account . We’re here for Andy’s ideas and opinions ( some of the best work out there) the rest is up to us. I have blown up my account many times over the years Liston to Andy and he will help unfuck the situation . As he has done before.

    • Dude – I am here since June 11, so chill out. Even if we get out of this unscathed, this is not where you would like to be…and btw, we were never closed to wiping out accts in last 18 months…last Nov correction was a walk in the park…because 60% of our money was in Jan 13 400-500 and 20% in cash which was deployed in 363 area for Jan 370-380 spread. Going all in for this Jan correction was a mistake IMO and I understand it is hindsight…but we need to acknowledge it is bad risk management and not endorse it…else, we will get wiped out sooner or later down the road…so, chill out…constructive criticism is what separates us from fucking yahoo message board…

    • The BC portfolio is down 85% from when I joined in February 2012 where stock is up 30%. It’s down 20% from inception where stock is up 70%. I like Andy and the information he provides, but the BC Apple portfolio that Andy manages has done horribly. Not looking to argue. Performance says it all…both 17 months from inception and 10 months from when I joined.

      • It’s unfair to score the portfolio at the bottom of a correction, and months before expiration.

        • I agree…not a time to measure portfolio perf at the bottom…we should look at on Jan exp

        • Perhaps it is unfair to measure performance when we are at a low stock price. I also measure it based on the number of trades that were made this year and the net results of those trades. More than half the trades failed. And much of the advice AZ doled out, that was not BC trades, also had very mixed results. And so much focus on short term trades and moves without much focus on allocation and the future…and the global picture.

          I pointed out in May when we took our positions about how risky it might be (I asked lots of questions) about the unknown (president and fiscal cliff) issues…and that is why I did put about 10% of my money in 2014 options…that are not down nearly as much as 2013 options. Andy’s words then on 2014 options were pretty dismissive…he thought it was a waste as Jan 2013 options would outperform…again no diversification of the strategy…I suppose if I followed my own advice more…I’d have been 50% in Jan 2013 and 50% in Jan 2014 options…and probably lightened up on my Jan 2013 option in Sept at $650 or so.

          I also wish I’d listen to myself more when I saw the slowdown in earnings in the July report and then again in Oct. I really believe those fundamentals trump so much else we discuss here.

          I still think Apple has a bright future and the stock can do really well, but a slowdown in growth to me is the most major change Apple has seen in the last 7-8 years…is this time different…I thought it was, but I let myself be influenced by a more aggressive outlook than the one I had…not good for balance for me. Not blaming anyone…just changing a few things to keep what I think is a better longer term strategy for myself.

          • Shaun Abraham (renjixb)

            Sboyland so what do you see as conservative jan 2014 positions?

            • Shaun, I’m not Sboyland, but maybe we should be reconsidering the idea of using a “conservative spread” as a core position. I’m leaning more towards using an ITM or ATM Leaps and leaving them unhedged as a core position. So for example, you could buy the 2015 500 call for about $11k (or the 2014 $450 for about the same price.) The results off these won’t be as astounding as a “conservative spread” but the risk of a wipeout is significantly much lower. The downside is that calls are extremely expensive. The power of spreads could be used more as a supplemental position that we go in and out of. Personally, I’m not a big fan of holding options to anywhere near expiration if possible – you never know what unforseen circumstances might come up.

            • One example is $600 to $700 for $20 right now. Perhaps $700-$800 for jan 2015 for $16. That would be one example. Perhaps $50 less on the above if one wanted to play it more conservative. And trading out of these positions 3-6 months to the following year ahead or if the stock goes way up to above say a 15-16 PE ratio.

              I think we are in for slower growth and lower PE ratio than the past year…on average.

              I could be wrong here…but I think I’ll make a double on my money each year this way on average.

        • No it is not unfair to judge the portfolio at any time. We should have unloaded above 700, no excuses.

      • It appears you are comparing AAPL stock to leveraged spreads at the lows. There is no comparison. Do the comparison at $650 or $705, options make a huge difference.

        • Any strategy that can lose 100% due to a 25% downturn in the stock price over a 2 month period is far too much risk for me and wreckless when it comes to an antire approach. I could see if it as a smallish position. This lack of allocation in following BCs Apple portfolio and thus losing 85% of thr porfolio is the major lesson I have learned…to come up with a a better longer term strategy.

          My own short sighted news. Lesson learned. A multi million dollar lesson! As I said I have a job where I make a ton and still have money left…and hope for some rebound it regardless of the result in January, this strategy is terrible for my investment success. Just my opinion, not bible.

          • Sboyland,

            I am literally in the exact same place as you. I also didn’t listen to myself and over allocated, but the past is the past. Now just pray to get back to only a 50-60% loss in next quarter.

            I think we should continue to hold the jan spreads until at least 555 which we could see on Monday. If we blow through 535/537, we should be 555 by Tuesday. If we struggle to take out 555, I may just sell everything. If we can get through it, I will plan to hold until 580/59o. At that point, we could roll to lower strike feb calls or leaps or some combination.

            Given the strong close in market we should move up to 555 pretty quickly I would think. I just hope we don’t have to go through retest process.

          • Yes agreed this would be a better use of part of a portfolio rather than the whole portfolio also since the returns can be so high but yet so can the risks.

      • Count how many times you’ve said that same exact line about down 85% up 30% …

        I would, but I lost count….just on this page.

  9. Dave Gordon posted a great long term chart yesterday which suggests a touch on the lower trend line results in overbought RSI on daily (80 area) within a couple months… can anyone comment on where the price would need to be for RSI to get overbought by Jan expiration?

    • 720-730 approx

    • Sorry 620-630

      • How do you calculate this? I was expecting that to be in 700 range…

        • I am not much of a mathematician but a v recovery would be around 62o-630 I think. Ask Andy or edleft … Mark O might have the answer also… He got the 11.54 pe into the first q right-correct… He has a Bloomberg terminal I bet.. Andy missed that one … My brother warned me..

          • Apple never traded at under a 12 P/E, on known numbers on a GAAP basis. That is and has been my contention.

            Why would any other P/E ratio matter? Think about it. Suppose Apple goes into January 2014 with a $64 TTM and is trading at $800 a share. That would put Apple at a 12.5 P/E ratio right?

            The quarter technically closes right before the beginning of January. If Apple goes into the month of January at $800 a share, then it’s trading on which TTM? The quarter that we hasn’t been reported yet or the quarter that is about to be reported? If it’s trading on the current quarter’s KNOWN TTM, the P/E ratio is 12.5.

            Ok. Now suppose Apple runs to $900 into the earnings results, reports an EPS that brings the TTM to $90 and the stock gaps up to $1200 the next day.

            If that were the case, then the next day Apple’s P/E ratio would be 13.33. So what did we have as P/E’s before and after the earnings report. What was known before the report and after the report? Hmm?

            Before the report, Apple traded at a 12.5 P/E ratio. After the report it traded at a 13.33 P/E ratio. What your brother and apparently bloomberg are doing — which by the way misrepresents the facts — is they are apply the recently reported earnings to the beginning of the month.

            Why is that a misrepresentation? BECAUSE WE NEVER KNEW THE DAMN NUMBERS AHEAD OF TIME. So the TTM and P/E ratio Apple was trading at during the beginning of January was based off of current knowledge.

            To apply the $90 TTM to the $800 stock price at the beginning of January, would plunge Apple’s P/E ratio down to 8.88.

            So would you say that Apple traded at an 8.88 P/E ratio at the beginning of January? I wouldn’t. Because it wasn’t based off of known information. Technically speaking, a reporting period is totally arbitrary. Based on this math, Apple’s P/E should be based on a different TTM every day.

            Why? Because technically speaking, Apple could report earnings on every day of the quarter. So based on this math, known one would ever know what Apple’s real P/E ratio is or TTM is for that matter.

            Because even though we got the number at the end of January, there were earnings in October, November and December that were never reported until January. The whole time, Apple’s TTM was changing by the day and so was the actual real P/E ratio.

            There’s a difference between the REAL P/E ratio and the KNOWN P/E ratio. And what I’m pointing out is that Apple has never traded at a KNOWN P/E ratio of under 12. That is a fact. Not until this past Thursday/Friday.

  10. Andy, I am a very long time AAPL Investor and mostly long. I have dabbled in Options prior to BC, won big on some, got my ass kicked on others. I realized that I was investing based upon a buy and pray model and I definitely needed some understanding of technicals etc. I had read some of your posts on another website from a couple years ago and was very impressed, but then you disappeared. I later discovered that you had developed this blog and I hurried over and signed up. With my limited knowledge, it appears to me that this current dive of AAPL was beyond individuals tolerance levels and thus everybody freaked. Over a thousand daily comments on the BC Comment section, a lot of which were unproductive. I have prior experience with “almost losing it all” as a result of the financial crisis in 08′ and it made me much more emotionally stronger and financially wealthier, simply because I believed in the AAPL’s fundamentals. Thus, although I have been nervous about this turn-down as I too stood to lose a significant fortune, I remain firm with my positive convictions for AAPL. The rest is noise. Having said that, some of the aforementioned posts alarmed me of not only your emotional state, but some of the subs. Frankly, I have been amazed at the volume of material you continued to put out even when you were sick and then to try an address individual subs on the BC comment section. I hope you take the time to re-group and re-prioritize your energies, there is only so much that can be spread around. I would be very disappointed if the site is shut down and if it is, hopefully, you will allow current members access to existing stuff. If you continue, and if you continue BC Comments section, I wouldn’t even visit it. I didn’t join this site expecting that you would give me individual attention and was surprised when some members asked for it. With this amount of membership, I see that as an impossibility to fulfill. Well, I have blabbed on for too long. Just wanted to let you know I have appreciated the analysis you have provided. Take Care………:)

    • Couldn’t agree more.
      Your advice is far more useful to me, Andy, than the comments section. I agree the comments can be useful, but if you continue them (in effect as a forum), don’t waste your time reading them. Maybe a moderated forum could succeed in eliminating the emotional outbursts, but if not, get rid of the comments.
      I cannot understand the childish attitude of the bloggers who seem to hold you responsible for their losses. If we’re not adult enough to recognize our responsibility for our own decisions, we shouldn’t be here. And if we’re not smart enough to recognize the risks in option trades, we also shouldn’t be here. I too have suffered big losses since mid-September, but that makes me just all the more determined to learn how to better manage the risks. Your advice and comments are consistently valuable, contributing to my learning both when you’re right and when you’re wrong.

    • Right on!!!

    • I noted that on their chart they neglect to show Daily RSI, so in the other instance the Daily RSI was not below 30 and we know RSI works. I guess you could call this further evidence. Also remember this Friday and next Friday.

    • So I went back in history to see other times, it turns out that there are only two other instances where AAPL was this low RSI-wise 2008 and 2009. So that is saying something, only twice in the last 10 years has AAPL had this oversold conditions on the Daily RSI, and one of those times was the market crash. I don’t want to pass judgement on 2008 because I don’t know the circumstances, Jobs getting cancer? Today does not reflect that, Jobs had 5 years to craft the company into something that would last without him. He had 5 years to prepare a pipeline of new products and to prepare the pipeline for his eventual absence. So I’m saying it’s difficult to compare, if not impossible.

  11. Apple settles with HTC out of court. Apple and Google agree to binding arbitration.
    Could that suggest a shift away from the expensive court process for Apple?

    • Perhaps. We don’t know what Apple agreed to with HTC so we cannot make any assumptions from the agreement yet. There’s a big difference between a licensing deal with HTC where Apple allows HTC to use all their patents, and an agreement where some “user experience” patents are disallowed.

      I don’t think Samsung is going to capitulate — they are tough, and a lot of nationalist pride is involved.

      From a financial perspective, “Microsoft will generate $444 million in revenue from Android patent deals for fiscal year 2012.”… If Apple generates as much revenue from Android licensing as Microsoft, it will create $.44 EPS annually. Not much of an impact.

  12. I vote for closing comment section for entire next week.

  13. Look folks, Andy clearly has stated this investment is about buying and investing for the long term even when trying to eek out major gains in the short term. So if you have over leverage your own portfolio to not withstand short term fluctuations, then you obvoiously are not following guidance. If you had overly speculative, fluctuating investments elsewhere that led to calls and thus you had to cover using the Apple positions, that is your fault. Andy does clearly warn about the potential lower oversold ranges that Apple can go to such as this. So if your overextended your portfolio short-term forcing you to sell do to calls, that is your fault for not understanding your bank obligations. This kind of trading is not for the naive nor the unexperienced. Andy is above the board.

  14. I read some of the comments here begging Andy to keep BC open and sort of apologizing for bad behavior, negative comments, etc.

    You may be barking up the wrong tree.

    I don’t see anything in Andy’s announcement indicating that he is contemplating to shut down the site because of our bad behavior or negativism.

    And honestly, I didn’t see any of this at all. Admittedly I didn’t read all comments every day, but I skimmed them and I saw very-very few inflammatory, ad hominem attacks on Andy. I did see a lot of questions and occasional counter arguments, differing opinions, but clearly this actually ADDS to the value of the site and I am sure that Andy knows that too. [There was a single guy who called Andy a scam artist a few days ago, this I do call inflammatory. Disagreeing about TA or the role or validity of chart pattern or EPS estimates is clearly NOT!]

    As a matter of fact, I am pretty sure that (although he has a very combative style), Andy actually LEARNED from this experience too! How to handle an active, opinionated community of this size, how to articulate ideas better, how to cater to the needs of a very diverse (money, age, experience, risk tolerance) group, how to diversify a portfolio better, etc.

    Is he frustrated? Of course he is! Hell, we are all frustrated! We are frustrated “only” because we lost 80-90% of our investment. He is frustrated for the same reason PLUS his professional reputation and (as long as he makes his living from BC) his earning is on the line. There is nothing you can do about this and I don’t think that he realistically EXPECTS you to do anything about it!

    So why would a professional, like Andy, shut down the site?

    I can’t help but thinking that he may start his “next career” earlier than planned. If he shuts BC down, it is because of HIM (his plans) and not because of you! Remember the trip he took a couple of months ago to Europe with Horace? And when he returned he hinted that he (or they?) will start something completely revolutionary? Maybe this is what’s happening. Or maybe he got an offer to start a hedge fund with $10B to invest, 10% profit-sharing. Whatever. So don’t blame yourself (and ESPECIALLY don’t blame your fellow subs! PLEASE!) because (a) there is no reason for it; (b) nobody ASKED you to do that!

    And if before quitting Andy wants to see to it that the model portfolio returns to BE, it shows his professionalism (and of course to jump ship in the middle of a storm hurts a captain’s reputation too.)



    • “You may be barking up the wrong tree.

      I don’t see anything in Andy’s announcement indicating that he is contemplating to shut down the site because of our bad behavior or negativism.

      And honestly, I didn’t see any of this at all. Admittedly I didn’t read all comments every day, but I skimmed them and I saw very-very few inflammatory, ad hominem attacks on Andy.”

      I think maybe it helps to read more of the comments and what Andy’s written to see what people are reading into this (i.e. go back further to see this in a better context). There was a huge amount of criticism. It moderated into slightly more constructive comments over time (the last couple months were much better than the previous corrections). Part of it was that he banned or got rid of most of the really poorly behaving people. This is to say nothing of the email he probably gets from people, which reading between the lines of what he says sometimes, must be pretty bad at times like this.

      Anyway, you may well be correct, but I think there’s more to it than what you’re saying. The current strategy evolved from the previous, more diverse strategies, in part because people were complaining that the previous strategy was too difficult to follow, or whatever.

      • You are probably right and it is actually very helpful to identify the context we are talking about. And my perspective seems to be shorter term than yours! Thanks!

        What you are saying to some extent validates what I was alluded to: that this was a valuable learning experience for Andy too. I.e. he accepted the complains and adjusted his trading strategy. This (to process feedback and simplify things) is actually a good thing. but of course you don’t want to oversimplify a strategy either. And (as long as we “blame” subs): to blame subs that the strategy is oversimplified (or that we don’t trade puts anymore) is somehow childish / disingenuous. Andy SHOULD listen to his subs (this is his business interest too) but at the end of the day this is HIS blog and HIS business and HIS strategy.

        As he (and others) pointed out a number of times CORRECTLY: nobody FORCED you to take a trade. It is YOUR choice and YOUR responsibility. This works the other way round too: nobody FORCED Andy to make or not make a recommendation. It is HIS choice and HIS business. Maybe he changed his style for his business interest. Or maybe he thought (maybe incorrectly) that some of the criticism was valid. Or maybe he wanted the impossible: to please everybody. I don’t know. This is HIS choice and not yours or mine.

        To repeat what I said before: to me the community has value. Maybe it is too much for Andy. It is his business and his decision. He may hire an assistant to moderate. Or to filter messages for him both from comments and e-mail. But in this business (and he very well may decide to leave this business) you have to learn how to withstand a LOT. I saw way more negative comments on SeekingAlpha (that is a FREE site) than here! And I mean REAL negative, not simply “I disagree with you” that I do NOT consider negative. Probably some authors dropped out but I see a lot of them coming back for more!

  15. Hate to be pessimistic but, Apple at 705 In January and BC shutting down? That is a problem I would love to have. There seems to be more group think here the bottom is in and it clear blue skies. Unfortunately Israel has decided they want at least one more war and maybe two. The Repubs are not going to turn their backs on their god’s and masters. They will not permit raising taxes on the wealthy if their is any way they can prevent it. Just think they are willing to crash the economy to prevent a person making 500,000 a year with 200,000 worth of tax deductions from paying an addition 1500 in taxes. Think about that. With a war in the mideast and the far right refusing to budge the market goes down next week. That is just reality. Tell me I am wrong please.

    • You’re wrong. :)

    • time1234 – just remember you “tax” what you want less of. That is basic economics. I’m an independent, but regardless of what Congress decides to do I hope that they implement fiscal measures that promote job growth, not curb it.

      As for taxes, in CA, I’m taxed at a 13.x% rate (thanks for prop 30) + when you include Fed, I’m nearly at 50%. If the Democrats get their way, I’ll be taxed at over 50%. Think about that for a moment. That doesn’t include retail taxes. So, for every dollar I earn, I pay over 50% of it to the govt. Now, the good news – if this is good news – is that the loses I take (If I exit my Jan positions) I’ll be so in the red that I won’t have to pay any taxes (I’ll get a refund for once!). The thought of that does make me laugh. I’ll get a tax refund check, all of which, I will plow back into investing and educating myself.

      Bottom line: let’s leave politics out of this. I hate religion in politics as much as I disdain welfare for people who can work but choose not. I came to this country as a poor immigrant, worked my ass off, got advanced degrees, and started multiple businesses. I can’t stand our president, and I can’t stand religion in politics, and I can’t stand lazy people. What I can stand for is 705+ Jan :-)

      • Mark, politics is driving the Market right now.

        • time1234 – the problem I had with your comment was the signaling out of Republicans specifically. Both parties are guilty as charged for posturing at our expense. And yes, the market is reacting to this nonsense.

          • Manish Mallick

            all i care right now is to see a $680 + print on Apple before expiration. everything else can kiss my ass:-)

          • Mark the problem I have with your comments are they are egotistical. You hate lazy people? Who are lazy people and what gives you the right to judge? Like Romney you think Lazy folks are on disability? You are lucky you are young and healthy and only have tax rates to complain about. Also you are factually wrong with your false equivalency. The bill to end the mess has passed the Senate and is sitting at the House? What has the House offered? Nothing. They have not passed a bill. Nor even floated an idea.

          • Mark O,
            There is no such thing as a “lazy” person. There are people with mental/emotional disorders who are not getting the right care, people with low self esteem who do not believe in themselves, people with abusive and dysfunctional families who grow up believing that they cannot contribute anything useful to society because that is what they learned. And many I have met on welfare HATE it, they hate the poverty, the constant LACK, the worrying about money, putting food on the table, feeding and clothing their children. They need help until they get themselves back on their feet. And Tim1234 is absolutely correct. It is greed that is destroying this country and the unconscionable growing gap between the wealthy and the average worker. Only love and compassion for our fellow human beings and a willingness to close that gap with our hearts and our pocketbooks (by contributing our fair share) will solve the growing discontent and discomfort that many of us feel about the future of this country.

            • Well said Doc.

              I think Mark was referring to those that abuse system. Just came out Wong way.

              Obama’s polarizing talk has done a lot of damage to the country and its going to take a long time for country to recover.

              It’s really very sad he way he divided the country. He was supposed to ring us together. His war on success actually makes a lot of people genuinely crazy.

              • Hi Jack,
                Yes there are those that abuse the system but the system is in place for the majority who need it.
                Speaking of those who abuse the system, why not mention the bankers and those responsible for almost bringing the entire financial system down through the trading of illegal and bad securites?
                Obama has divided the country ? How exactly?
                His war on success? By asking billionaires to pay their fair share?
                No one is really successful, Jack, until we ALL have at the least the chance to be.

                • We can go on and on, you are coming from a good place and I appreciate that. I don’t have all the answers, but I am getting literally crushed by the tax code. I have no deductions and live in NYC. I just got hit with an MTA tax for Christ sake and I don’t even take the subway. I walk most places.

                  Now cap gains is going way up and it just brutal. I wasted so much time arguing with my left win relatives that I forgot to sell at 700 and got capture by BC, I am a hostage at this point.

                  I am all for a wealth tax. Go for it, but us working stiff are getting crushes.

                  I look forward to a New York meetup if we get out of this mess. I will organize it. I believe you are in the NY area so you can come down and we can have a healthy debate.

                  By the way, lets beak up the banks. That’s an easy decision. Jon Huntsman should have received the republican nomination. We would have all been better off.

                • I have a serious question. When people say the rich need to pay their “faire share,” what exactly does that mean? Is it a number? A percent? Or is it just “more than you pay now.”

                  In 2009, top 10% of income earners paid 71% of federal income tax but earned 43% of total income. Bottom 50% of income earners paid 2% of federal income tax but earned 13% of total income. So what really do you mean when you say they need to pay their fair share?

            • Dr Sue – you are wrong.

              There exists LAZY people, reread my sentence again “as I disdain welfare for people who can work but choose not.” Did you read that? Now read it again. That’s “who” I’m referring you. You caught one word and went all crazy, and made assumptions about my definition. As for people on welfare, I’m sure some need it – but, Im’ also certain too that we have created a system that demotivates people into achieving more for themselves.

              As for being egotistical, I have no idea where that came from. I can tell I struck a nerve with you. As for ‘greed’ destroying this country, you’re a bigger fool than I knew. Are you serious? Why the hell are you on the site then? Why the hell are you speculating on stocks? Is it not greed? If money is greed, then you are basically saying that any activity that generates currency is greedy? EVERYONE that I know wants to make something better for themselves, their family, etc…seeks currency to exchange for goods. That’s how this world works.

              • Hi Mark ,
                I never said you were egotistical. That was Tim 1234. And wanting to make money is not greed. There is nothing wrong with making money or I would not be on this site!

          • Yes, I can see how one party being obstructionist and the other trying to govern and negotiate in good faith with said obstructionists could be taken as “both sides do it”.

            I’d have to have a lot of mind-altering chemicals on board, and a total detachment from reality, but given that, I could do it.

          • + 1MILL

      • Great post. Your my new hero. Tim needs to watch the Milton Friedman videos on PBS. It was a 12 part series on YouTube.

        • Jack MF is so widely discredited that it is stunning to see his name referenced. Read Naomi Klein. I went to UW and know more about MF that I care to.

          • I have heard this from others too, but I found the Friedman videos very convincing,

            I will read Klein, I am open to new ideas.

          • Anybody can be discredited … it simply depends on what level of evidence one requires before making the announcement.  I noticed this in one review of Naomi Klein’s book: “Ms Klein is to serious social thought what a dog is to dancing: it’s pathetic but it’s hard to look away.”  This is not proof, by any means, but it is on a par with your claim about Friedman.  Just one man’s opinion. 

          • Please, let’s keep the politics out.

            You make it so hard by bringing out your Naomi Klein pea-shooter, instead of the your high caliber Krugman.

            Certainly, there are no lazy people; everybody’s giving it all they have.

    • Tim,

      Taking the top marginal tax rates to 39.6 as they were under Clinton is not a big deal as I told you before. We can even include the additional surcharge on those who make over 1 mil.

      But, we can’t keep increasing rates on long term capital gains. They need to stay at 15% and I have written my Congressman to let him know. Investment income needs preferential treatment if we want to grow the economy. When Clinton lowered the cap gains from 28% to 20% the economy surged.

      Also, if we are going to let the Bush tax cuts expire because we need make revenue then we need to let them expire on everyone. Everybody has to pay their fair share Tim. We are all in this together, right?

      • According To Ronald Reagan that is not true. Take it up with him.

        • Ha ha. You are too worried about market I think. Friday close was huge for many stocks. I think the fiscal cliff moves off front page for rest of month.

          If we can get back over 136.7 (key long term trajectory) we can go to 138.5 quick. I think Apple will actually power market above 136.7!on Monday and the fact they we will have reclaimed that level so quickly will mean that Thursday/friday morning breakdown was false breakdown.

  16. The easiest and simplest thing is for AZ not to read anything. That is what I am going to do next week. I will only read AZ’s comments

  17. Manish Mallick

    my president, my religion, my savings are all pinned at apple being at $680+ Dec end:-)

  18. BC | What r the odds of a retest?

  19. Shaun,

    It seems like you’re a little concerned about strikes for jan ’14. If it helps at all-and it may not- my strategy is to be in higher strike call spreads now because I think we could see a big run. And if we don’t, I’d still hold the spreads until expiration because I do think they’ll expire ITM. However, optimally if aapl were to rally hard to 650 area by December/January, I would reduce risk by selling the higher strike spread and going to lower strike spread + cash, and repeat throughout the year at then p/e extremes. By the summer, I will look I jan ’15.

    • Sorry for the grammatical mistakes- typing on the phone.

      • Shaun Abraham (renjixb)

        I’m not so much worried really about jan14 as much as this sell off has shaken me as to what is logical for a target in jan14? What is conservative/aggressive anymore? What is logical heading into January…a sell off down to a 12 P/E Oct-Nov and then hoping it rebounds to a 15 P/E Dec-Jan

        In Sept a $750-$800 spread for jan14 would have been considered conservative. AZ is 100% positive on $1000 by Jan14. This sell has has taken AAPL close to a 11 P/E so I dont know what from what is conservative anymore vs aggressive lol

        • Good questions to consider. Although no one knows, I think it is important to remember the growth rate and drastically slowed. Nevertheless I could easily see the normal volatility with Apple moving the price up quite a bit, but I wouldn’t bet on $1,000! That seems like a long shot, but what do I do I know!

        • Shaun, I posted this to you higher up but you probably didn’t see it.:

          Shaun, I’m not Sboyland, but maybe we should be reconsidering the idea of using a “conservative spread” as a core position. I’m leaning more towards using an ITM or ATM Leaps and leaving them unhedged as a core position. So for example, you could buy the 2015 500 call for about $11k (or the 2014 $450 for about the same price.) The results off these won’t be as astounding as a “conservative spread” but the risk of a wipeout is significantly much lower. The downside is that calls are extremely expensive. The power of spreads could be used more as a supplemental position that we go in and out of. Personally, I’m not a big fan of holding options to anywhere near expiration if possible – you never know what unforseen circumstances might come up.

          • Murali,
            Call me a wuss bit I’m down 45% and my core position is a Feb 13 (after ER and new guidance) 525/545 which is a double +….puts me back to even.
            My other positions will be in the Jan or Feb 560/580 range for 3+ baggers for no mor ethan 25% of my capital.
            IMO betting on 800 or 900 spreads for Jan 14 may produce 10 to 15 baggers but the odds of getting wiped out are then 10 to 15 to 1 against success…that’s why they are 15 baggers! We can all price our risk/return wherever we want.
            This is NOT advice to you merely what I am doing.
            Regards, EBR

            • I would argue that the odds of 800 by Jan’14 OR an opportunity to sell the a ~800 spread at some time before expiration for more than it’s going for today is a better than 15 to 1. I think across the board, Jan ’14 spreads have a higher probability now than their payouts would indicate. That’s what you get with a 200 point drop and poor sentiment.

              • I agree there is very high probability of buying an 800/900 spread now and being able to sell at a profit sometime in the future.
                I also agree that the poor sentiment now allows you to buy a ‘bad 800/900′ spread (meaing one that has a lot of risk of closing OTM) at a much reduced price. Its a bargian price for something I don’t want.

            • EBR – thanks for your input – I always read and seriously consider your posts.

              I’m curious why you think that there will be more margin compression? I would think that margins are squeezed the most right now with all the new products, and margins should improve over time like they usually do in these product cycles.

              Personally, I wouldn’t be surprised by another miss in Jan, so I didn’t make a trade for Feb. I’m mostly buying some Jan13 bailout spreads (below $600).

              • Murali,
                Re margins, certainly the GM % will improve throught the fiscal year…..from Q1 thru the end of Q4. I’m speaking about longer term, I think margin compression is inevitable in a business where the products are becoming commodtized. Apple should always have some ‘moat’ protection becasue of its ecosystem but the smart phone and tablet markets will become more price competitve over time as the differecnes between the products diminish.
                I have the impression that the sell side analysts also believe this to be the case but I could be wrong.
                Alas, with margin compression, or at least the assumption of such, we will see more PE contraction. I am assuming 11 to 14 PE multiples for the next 12 months.

        • Shaun,
          IMO, there really is no safe spread for Jan 14. Too much time, too many factors like possbile global recession, China Mobile is iffy, more comptetition, likely more margin compression, etc.
          It may seem odd to oyu but IMO there is much more safety in near term spreads after a 180 point drop and we know that the Dec Q product line up is very strong. Can we keep expectations reasonable?
          Now all we need for a good Jan/Feb is for the analysts, mostly indpendents incl. BC, Horace and Nansen, etc to lose those $16 EPS estimates and produce more reasonable estimates ($13 to $14) so they dont set the bar too high resulting in another miss.
          I will go on record again…I like bC, Horace and Nansen but those publishing $16 estimates are part of the problem, not the solution.

        • Your concerns make sense. I have thought about them too. Do I think 11 is the new low P/E on a go forward basis? No. I think, like A.S. said a few days ago, that will be the outlier, much like 18 was the outlier on the last parabolic run. I’m also not going to need anywhere close to 1,000 to recoup my losses from this recent debacle. And I think if you’re patient there will be a couple of opportunities to scale up and down positions. At a 15-15.5 P/E I will likely not hold anything, even what appears to be conservative. And I will hold more cash in the future until we see a 12 P/E or so. One has to consider not only E(v) but also RoR.

    • Sensible. i think a big run is very unlikely. Negativity is everywhere and a war in the middle east? But this is sound advice. In fact if a big run occurs getting out entirely or hedging with puts is what I plan.

  20. Does the fact that Apple was at around 700 for four or five days with low volume, but it was only at 505 for a few minutes with very high volume mean anything ?

    • To me, yes. We had a curved top and a V bottom. I think that the May correction looks very similar on the charts and it was a V bottom with no retest.
      We have all experienced the fallibility of rely on past patterns to guide forward evetns but its worth considering.
      As an aside, I’d bet a bottle of Belvedere that Einhorn’s fund is buying this week.

  21. Generally selling climaxes occur with high volume. But define high? Volume has been much higher lots on this dive.

    • Tim,
      Fridays volume was the highest since March and I believe the 3rd or 4th highest of the year. It definitely qualifies as a high volume day.

    • Tim, the volume was great on Friday, that’s one of the main reasons the hammer is so powerful. There was also very little volume down below 515. Most was above it and the bull flag pattern it traded in between roughly 522-588 was very bullish.

      We should gap up Monday I would think. 535/537 is first resistance zone,

  22. To All, general reminder….its a 3 and a half day trading week. Thurs is tirkey day and the stock exchanges close at 1 PM on black friday.
    If you are trading/holding weeklies, better check on timing as i think there are some quirky things happening this week re settlements.

  23. Andy,

    I found these posts on Thursday and Friday from Nick Nansen. I guess he feels some of the heat from being a logical bull in this drawdown in his note about being “unloved.” Just in case misery loves company, I thought I would share it with you. Nice meditation about maintaining your composure at times like this. I hope you feel more appreciated based on the feedback after the resignation threat.

    The negative sentiment is through the roof. This is the final important bottoming signal. Apple is totally unloved. I am totally unloved. Apple and I accept this condition. That is who we are. We are unloved.
    There is really nothing more to say. I am OK with being unloved. Apple is OK with being unloved. At this point we will just sit by the side of the road and wait patiently for a change. I am worry free because I accept this condition totally.
    I believe in Apple and I believe in myself. I am content to wait patiently. Patience is the soul of wisdom. It is the hardest thing to master. I will no longer answer anxious questions about how low we can go or when will we bottom. It is irrelevant. Just be quiet and wait. You will recognize change when it slaps you in the face.
    In the meantime, contemplate being unloved. Think about what it means to be unloved. Think about the low expectations. There is a certain peace in the acceptance. Enjoy this state while it lasts. Like everything in life, it will change all too quickly.

    I do not believe any of the negative sentiment. I have laid out the positive case for Apple. I believe that this negative sentiment will turn around quickly when the price starts recovering and the news stories start reflecting more positive aspects of Apple. I believe we are close to a turn around.
    There comes a point when we all have to decide what we believe and take responsibility for our own decisions. If you really belive in the current bear case for Apple, then you should protect yourself and let Apple go. I am positive on Apple and I am sticking with it. I have laid out all the positive resons why I think Apple will recover to new highs either before January earnings or after January earnings.
    I am at peace with my beliefs and I take personal responsibility for them. I will quietly wait for the change to happen.

  24. PLEASE AZ: if you ever answer one question for me, let it be this one, right now (because I have to make a decision with some spare cash right now, probably Monday, and I don’t want to blow it):

    Your post a few minutes ago said: “At $650 in December, the $900 – $1000 spread will probably be at $7.00.”

    I don’t understand: I bought the $900-$1000 spread when AAPL was around $638, and checking my statement, I got it at $11.4, on October 9. You’re saying that only 2 months later, at a higher price, the spread will be as cheap as $7? Could you please verify? I would have thought that time-decay is small enough that if we come back to $650, the spread would go back to at least $11.

    I.e. i’d love it to be an awesome deal like you said, but i’m confused about the numbers you quote…

    • Shaun Abraham (renjixb)

      Go to option calculator from google…it should show you roughly what you want

    • It’s hardly time decay David. It’s the combination of a few factors….

      Cheap valuation of options due to sentiment and outlook and also volatility isn’t high.

    • In Dec @ $650 the J14 900-1000 would be between 140-150% higher than it is now, depending on when in Dec, and Imp Vol.

      Current Imp Vol is 35%. If we go up to 45%, you would be up 240%. If Imp Vol went down to 17%, you would be 84% LOWER at end of Dec: all at AAPL 650.

      • IV will never get down to 17% on long term leaps. (My calculator shows now at 33%) This spread will stay around 28% to 35% for most of the time in the next 13 months.

  25. damnit andy im with you, thelma and louise style…you can’t shut this shit down. not til everyone on this board is retired. Hoping for a nice run into earnings to recoup some losses then get a nice 10 bagger for 2014…get some rest brother. ill follow you and look forward to u laying out the case for 1000. my concerns arent apple, just macro, but im always scared of those issues. have a good weekend

    • Yea, I am with AZ too. Sounds like he is feeling better.

      Macro is my biggest concern too given diminishing returns of QE and the fact that we are in first year of presidential election cycle.

      The thing that scares mr most is the chart in the link below where AZ says we need to take out 1600 or look for major correction. See link below. It was one of AZ’s best pieces of work


      • The financial stress index (FSI) has increased moderately for about 3 weeks in a row, so the macro situation is slightly precarious.  I believe the fiscal cliff is driving the FSI higher, while progress is stalled in Europe.  I think we’ll be fine after these issues fade into the background …

        • Makes sense. Hopefully Greece gets the bailout, Spain requests assistance and the Germans let Draghi proceed with OMP soon.

          How soon can we get progress in Europe in your opinion. I haven’t keep up with the news as I have been captured by BC, Apple and my short term spreads.

          • Jack – I would hate to venture a guess (about Europe) … If I knew, I would be the only one who could predict that complicated situation.  I have a sense that the main problem (driving the FSI higher) is the US fiscal cliff and uncertainties about its resolution.  Though I don’t believe the situation will spiral out of control, the fear/threat is a situation developing like in 2008 where financial markets closed down. After it happens once, the memory stays alive in the minds of corporate CEO’s and bankers for many years (as it did in the 1930s).

  26. According to the options calc. the Jan 14 900-1000 spread is 2.58 now and will be 8.50 on Christmas with Apple at 650. http://new.optionsprofitcalculator.com/calculator/call-spread.html

    • I now this sounds reckless, but that’s only a triple. I think given the hammer and drawdown, it would be better to hold until at least 580/590 and then roll out. Don’t you agree?

    • Yes, by my calculations around $8.00, but the much better news are that even if Apple will be at $670 on Sep 1, 2013 they will be worth around $2.73 at 31.8% volatility. That means the initial capital will be well preserved at very low price for nearly a year.

    • Hmn, so that spread this second is a 37x bagger. If I give it a few days to see the evidence that we are in a huge updraft (i.e. confirming the validity of a certain guru’s predictions) to get confidence to buy in, then I might go from merely a 37x bagger to a 20x bagger or so (if i bought in at, say, 600).

      I could probably live with that. Though a 37x bagger does sound good. :) But holding it to a mere 800 and bailing sounds pretty freakin’ good too, if we get to that point at the expected time…

  27. Just read AZ’s post.
    Great to see that he is back in the game with a very positivee outlook and good energy, even though he is exhausted.
    Out of respect for AZ I will refrain from furthering posting my concerns re a $1,000 price target until he develops his case but don’t assume I am assured by his ‘absolute’ statements re technicals working or Apple’s future price levels because I am not.
    I will wait for him to make his case with facts and evidence and reassess accordingly.


    • EBR17: I like to see a multitude of opinions. It makes me think. I have found yours valuable as well.

      In your opinion: suppose you are scared of AAPL *finishing* at $1000 at Jan2014 expiration (because even if AZ is right and we hit $1000 by then, given that 20% corrections can obviously occur anytime) it would be dangerous to count on that price at expiration.

      But looking at the performance of that spread, it sure looks to me like in the short term, it wouldn’t be super-dangerous to buy that spread it out to offer bailout points for those who want it over the next 6 months. So buying that spread now, and taking time to think it through doesn’t sound like an insane call to me, particularly if the money isn’t do or die (which, in my opinion, should be the case with *any* money you put in just about any option, as recent events have proved).

      Love to hear your opinion, if you feel I’m missing anything. For example, if AAPL only makes it to 700 by next September, I’d be safe with that spread. And I think that is a reasonable gamble, while I sit and ponder. Thoughts?

      • DB,
        As I posted earlier I don’t want to comment further at this time re any $1,000 prices or spreads. Also I don’t really have anything of value to add, positive or negative, to your comments, sorry.


  28. Steve Hamilton

    Andy’s back. “We will defend our island – we will NEVER surrender”
    -Andy “Winston” Zaky.

  29. It was me that made the connection that the price/bagger is correlated to the risk and probability of success.
    Another one of AZ’s ABSOLUTE statements in his rebuttal. I would have thought he would have learned by now.
    I will re affirm and detail my statement again, sure there are lots of factors involved in pricing options such as time decay, volatility, sentiment, etc but as any good TA knows all of this is reflected in the charts/prices.
    Once again the market has priced in all of these factors and has vauled the option, not me or BC.
    If the market felt that there was a lot greater than a 10:1 chance of a 10 bagger closing fully ITM, then the market would value the option higher while considering all of the factors already priced in.
    Enough with the absolute statements. How can one expect to retain credibility when one repeatedly says “We are not going to miss” and misses the bottom 3 times at least.
    Call your statements opinions, thats what they are they are, not absolutes!
    If you statements were absolutely correct rather than just opinions your membership base would not be down 75 to 95%!

    • The way I see it, options are priced irrespective of technicals. So if you ignore technicals the pricing of options could be then be viewed as related to the probability of success, but I think you’d be wrong.
      And I don’t believe anyone believes that AAPL follows a random walk and TA should be ignore. If you believe in technicals then there would have to be inefficiencies in the prices of options. Each option is priced relative to other strikes (600, 605, 610, 615 etc all have to be priced efficiently relative to each other) i.e. the price of the 600 call has to be in-line and relative to the price of the 605 and the 610 etc. Volatility will of course raise or deflate option prices but it affects all the strikes in a relative fashion. That said, if TA works, and it points in a certain direction and a certain magnitude, then some inefficiencies would have to exist, no? How would the market price potential magnitude and direction efficiently, it couldn’t? In that, a 15 bagger would not necessarily be a 15:1 proposition simply because options do not price in technical analysis outcomes.

      ie, If we believe 630 is a 50/50 by jan 2013 and we’re sitting at 550, the 630 call won’t be priced as if it was a 50/50 proposition simply because it’s impossible for options to be priced this way?

      Would love someone to comment so I can verify if I am thinking about that correctly.

      • Not sure if you are right/wrong or partly either. You lost me in your thread, sorry.

      • I have no idea either, but I think the options pricing is in large part based on 15% – 20% eps growth. I could be totally wrong.

        I think Andy believes the assets are underpriced because he is counting on 40% eps growth.

        Andy is convinced that apple can grow sales, gross margin and eps mug more than most investors expect.

        We just need to see the evidence sooner rather.

    • I don’t think the market prices correctly. Come on: the return on a $750-850 was about a 4x bagger just a month or so ago. But now it’s more than 10x. If AAPL comes back up in the next 3-4 weeks, the price will return to approximately where it was.

      So clearly one of those prices (4x vs 10x) was totally totally wrong in terms of its risk/reward payout. I fail to see how the swing of AAPL by 100 when you’re 14 months away has *anything* to do with the odds of it hitting the expiration price 14 months in the future. But the return 14 months in the future is influenced so heavily by the price right now that I feel that something is seriously out of whack.

      Not sure which price is wrong, but for sure, one of them is…

      • I dont disagree with your conclusion that something seems out of whack.
        Unlike AZ, i do think option pricing is set the same way that vegas sets its sporting book odds. its not a mathematical equation determiend by the MMs. its based upon supply/demand, bidders/sellers, just like Vegas.
        Do you think the Bellagio sets the odds on an NFL game based upon the teams records, player injuries, home field advantage, etc. Nope.
        When I was a CPA I did a lot of criminal fraud forensic accounting in Vegas. Bellagio doesn’t care about the odds only aobut balancing its books or over/under bets by giving odds that preserve their spreads. Its the bettors, the buyer/sellers that determine the odds based upon their expectation of success or failure.

        • The only thing the MMs can influence directly is vega. Everything else is beyond their control.

        • This is the first time that the term sporting has appeared on this page.

          In the context of Vega up to here we have been discussing putting your money on black, etc.

          What is the basis for your assertion of what AZ believes about sporting book odds.

          I know people who make a very good and consistent living out of horse racing.

      • For instance,

        Jan 2013 calls:

        ATM 530 is priced at $29. All other strikes would have to be efficiently priced based on that ATM call. They can’t be out of whack. If the market wants to add or remove volatility then that call could be $19 or $39 but the rest have to follow efficiently else the market could capitalize of the pricing inefficiency.

        Thus, options pricing are present looking only and cannot take into consideration oversold conditions, overbought conditions and all other TA indicators that indicate longer term momentum or corrections. So if you subscribe to anything TA and something tells you that 600 by jan 2013 is a 75% likelihood then you can capitalize of the fact that the call option won’t be priced with what ever TA indicator you used to come up with that 75% figure. It just can’t.

      • None of the prices are wrong or were wrong. Everything is about the IV.

        At the time when Apple was making new ATH the IV was high and therefore the spreads prices were high too. Now on the other hand the IV is not so low at all but the stock is falling off the bed every day so according to this the options and spread are perfectly priced.

        I think Andy summarized it perfectly so many times and today too:
        “…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.

    • EBR17 — I’m sorry. You thought I would have learned what by now? If what you are saying is true, then I have been extraordinarily lucky in most cases. And I’m sorry, I refuse to believe that’s the case. If you think that, then why are you investing at all? If you think that the value of spreads reflect the actual probability, then you are gambling. That’s not investing.

      I’m sorry, but I can’t even have a rational discussion with anyone who thinks that the odds of Apple closing >$600 in January 2014 is 2.5 to 1 against. Sorry. But we will NEVER see eye to eye on this.

      Investing is all about finding value in an underpriced asset. It isn’t gambling as you put it. And you don’t even realize that your statement has reduced all investing to gambling.

      If that were the case, then anyone who got it right is lucky and anyone who got it wrong just failed because the probability was against him.

      Apple at $80 at the bottom of the financial crisis was an extremely undervalued asset that was almost sure to appreciate in value by a very significant margin in the coming years. Right now, Apple is extremely undervalued and its underlying derivatives are extremely undervalued.

      Just as they were at $235 in August 2010, $310 in June 2011, $363 in November 2011, $522 in May 2012 and $505 in November 2012.

      This isn’t vegas bro. If you believe that, then what’s the point of investing at all? You’re better off not investing or if you choose to, then go to vegas and bet it on black.

      If playing a game of black-jack = investing in Apple, then why spend all of the time and energy even analyzing it? That would seem to me to be an extraordinary waste of time.

      This statement regarding option pricing and odds are not true. Sorry. But it is simply not the case. But believe whatever you want to believe.

      • Amen to this post. It was the realization during the financial crisis of 08′ that AAPL was tremendously undervalued that saved my bacon. I stayed with AAPL long and it made me a small fortune. It was poor subsequent Option strategies that has gotten me twisted, but not insolvent. Learning here from a lot of you. Thanks!

  30. “A 14-bagger spread today in Apple expiring in 2014 has probably a 75 to 85% chance of success”

    This is an example of one of the worst statements a prudent financial advisor can make, IMO.

    • I don’t think it is quite as straightforward as that. The Jan 14 500-550 is $24.00. Do you think that it is 2:1 against AAPL being over 550 by Jan 14 expiration?

      This seems like a conservative spread, but a 2:1 bet is not a conservative bet. It is one or the other.

      • Lemonship,
        The market prices these securities with attributes of risk, volatility, costs of capital, transasctinal costs, etc. I don’t price them. If the market thought they awere a 90% sure thing do you think they would see st a 2:1 return?
        Are the markets so,etimes inefficient, yes and that creates opportunity such that bC is trying to capitalize om, IMO.
        As I’ve stated above, its my opinion, that from where we are today I am not comfortable with predicitng any Jan 2104 pricing, others obviously are and thats fine.

        • “The market prices these securities with attributes of risk, volatility, costs of capital, transasctinal costs, etc. I don’t price them. If the market thought they awere a 90% sure thing do you think they would see st a 2:1 return?”

          It has nothing to do with all you have mentioned. The current IV of this spread is 35%. That is very high btw. If Apple was trading today at $600 that spread was worth @ 40.66 and that is around 23% return. Think about it 23% when the stock is sitting 9% above $550.

          On the other hand if Apple was trading at $500, at today IV this spread would be at 18.76 = 166% return and the stock has to go 10% for the spread to be fully in the money.

          So the options are priced according to today market only! Nothing to do with TA of the stock. Otherwise, if one think very conservatively that in Jan 14 the stock will be at $750 the 700-750 for Jan 14 should be worth around $25 while it is actually only at 7.55.

    • It’s because I’m basing it on the underlying stock and what that stock has ahead of it. So I would first analyze the reasons before arriving at that conclusion.

    • ““A 14-bagger spread today in Apple expiring in 2014 has probably a 75 to 85% chance of success”

      This is an example of one of the worst statements a prudent financial advisor can make, IMO.”

      Hmm. Ok, maybe he could have said bullish spread. I wouldn’t try buying any 14 bagger Apple 2014 bearish spreads.

      Otherwise I think is is a carefully thought out comment.

  31. I thought you might like this article from The Washington Post Politics iPad app. Petraeus scandal puts lifestyle of four-star generals under scrutiny
    This article may suggest that the military budget will be cut much more likely. A positive.

  32. EBR17 Yes the volume was high on the lows on Friday. Monday as AZ has said is often the day a move up starts. Well and good. All the long term trend following charts are on sell signals. P&F, Kagi, 3 line break, and Renko. The weekly volume is low compared to the spring lows. A remember a tout at the race track saying “Seattle Slew 2 to 1, mortgage the house”. Well he was right. But this could be a pause before the war and politics take the market down some more.

    • Actually, I didn’t look at volume for the week just the day of Friday.
      Yes, a lot of credible TA I follow think we will have only an interim retracement up $30 or $40 and then resume the current long or intermediate trend downward.
      Assuming we are definitely out of the woods is for a more adventurous investor than I.
      I see/understand both arguments of why the glass is half full or half empty.
      Maybe thats why I am so much more comfortable with Jan/Feb 2103 spreads from the current pricing and knowing the current product launches, demand levels and improving supply situation. I have little confidence in what the situation will be like in 12 mos and hence am not itnterested in jan 14 spreads at this time. They may be fine or even spectacular investments for other folks.

      • By the way, regarding supply, I went to my local sprint and AT&T store and he said they had very high levels of iPhone 5s and both also said a large shipment of iPad minis will be in Monday.

        Sounds like apple is fully stocked and ready for shopping season. Assuming all this inventory was maxed and shipped as of end of October/early November, that gives app,e full two months of productions (Novermber and December) to exit the quarter with a full channel fill.

        That bodes well I think.

        • Sorry about all the typos. I blame my ipad.

          • :-) All of a sudden, I hate all my Apple devices…

            • LOL. Next week is our week brother!

              • Fingers crossed man…will believe it when I see it…Friday before this one also had a reversal from 530 area to 547 and it closed green only to be down 20 on the week…I understand the volume, oversold and the hammer part but mkts can stay irrational longer than we can stay solvent…fucking knew about that crap so long…never mind…still holding back on my Canadian desert wine and content with a Napa Pinot Noir for now:-)

                • It really was very encouraging. Last time I went to both of these stores they had nothing in stock.

                  I actually spoke to the AT&T regional manager for manhattan who is responsible for several stores and he said they were fully stocked with moe phones than ever.

                  The guy at sprint also said the iPhone 5 was selling much more than galaxy.

                • I feel good about, but certainly anything is possible.

                  I think you will be back to the chateau de quem before you know it.

                  I just got my annual sea smoke shipment in today. I just hope they billed me at time of order 6 months ago rather than at time of shipment.

                  I am too afraid to open the Amex. This is nuts!

                  • I say we pop the D’yquem when AAPL gets back to that 666 level. (I’m predicting that for next week….only bc this week is a short trading week ;-)

          • I blame my poor eyesight.

        • Yes, thats great news and is what i am seeing in SD. The reason I like it is that it will hopefully allow for a lot of units to go to China when they start selling in the next few weeks. I was worried the domestic market woudl abosrb all of the production.

  33. YOY share price growth typically mirrors EPS growth in Apple…2011 was an exception because of Jobs departure and price grew only 30% while EPS grew 80% YOY for fiscal 2011 …guess, that stall was partly responsible for parabolic rally early this year along with blowout in Jan…so, for Apple to be at 1K in Jan 14, the share price should atleast be 650 by Dec end because I don’t see how EPS will grow more than 50% even in the most bullish case…that 650 no is also in line with 60% EPS growth this year that has already been accomplished (27.6 Oct 11 >44.16 Oct 12)….60% share price growth from 405 last Dec end also leads to 650 for this Dec end…I think it needs to get there for a fair shot at 1K in 12 months..

    • I hope revenue growth doesn’t mirror website traffic growth! 15% rev growth would not be good for bull case. We need 30-35% to keep the story going strong.

      @comScore: Apple Sites see 15% YoY increase in US Q3 unique visitors #SOR12 – http://t.co/qUeGEjat

      • Most ppl stateside buy it from stores…only recently have they introduced the store pick up option for online purchase and that will drive more traffic online

      • jack, lets hope that there the reason for a ‘low’ 15% increase is the rapid increase in Apple stores but more, the even faster growth in number of carriers that sell iPhones and iPads.

        • I suspect there is a good reason. In fact, if we checked we might find that traffic growth last year was only 18% or maybe even 14%.

  34. Andy,

    Hope you are feeling better bud! Appreciate all the hard work you do!


  35. Can someone explain why at this point it would make sense to buy spreads over straight calls for jan 2014? I would think at this point you wouldn’t want to cap your upside for a cheaper price? Any opinions most welcome.

    • Andy talked about this at length at 650 about 2 months ago. The case was very compelling.

      If you can find the link that would be great. I have asked for it about 10x now.

      If it made sense at 650, it should make more sense now!

    • The short answer is that spread make more sense in most cases, but today or possibly in January that might not be the case.

      • Thanks for the reply Jack. At this point, i think it’s better not to cap upside with this depressed levels. If this slingshot theory still works – this may be the best slingshot ever and this straight calls may explode in value!

    • Scott Parkhill (sparkhill)

      One word: leverage. In most situations, vertical spreads provide greater leverage and a higher rate of return than calls, at a lower closing price.

      Looking at Jan 14, with a little rounding to make the numbers easy, the calls are priced:
      700 – $25.00
      800 – $12.50
      700-800 spread – $12.50 ($25.00-$12.50)

      For every “straight” 700 call you buy, you can buy two 700-800 spreads. Assume you have $1000 to invest. You could buy either forty $700 calls or eighty 700-800 spreads.

      Look at the value of your $1000 investment for different closing prices on Jan 14:

      closing price 700 call 700-800 spread
      qty 40 80
      <700 0 0
      725 $1000 $2000
      750 $2000 $4000
      800 $4000 $8000
      900 $8000 $8000
      1000 $12000 $8000

      Sorry about the crappy table, but you see that the stock would need to reach 900 for your 700 calls to be worth $8000 while the 700-800 spread gets you there when the stock is 800. Above a stock price of 900, the 700 call would beat the 700-800 spread but that is a lot of added risk. And, if you believe the stock will hit 900, then buy the 800-900 spread for $6.5 and end up with $15,000 on your initial investment.

      Read the linked page and then run some numbers for your scenario to see which works better for your desired outcome.

      • Scott Parkhill (sparkhill)

        OK, the table is illegible. Try this:

        • Hey Scott,

          Thanks for your response. Thinking of strategy. I was looking to sell the open ended call when Apple hits 15,15.5, and 16 PE’s over the course of the year and buy back under 14 PEs. What happens to the pricing of the 700 calls vs the 700-800 spread if Apple is sitting at 800 in July? Doesn’t it make sense that the straight call would be worth more if we aren’t planning to hold to expiration anyway? Thanks for the analysis. Anyone’s responses most welcome.

          • Scott Parkhill (sparkhill)

            You can always run your scenarios through an option calculator, but generally, the fact you can buy twice as many spreads (in this example) overcomes most other factors.

            Zaky is far more thoughtful and elegant in picking his spread strategies than many people realize. He will likely publish a buy-sell strategy based on PE and, honestly, he will be more articulate than I ever could be. Do what you are comfortable with for now and transition to whatever Zaky recommends in the next couple of months.

            • Thanks Scott for your insight. Hope Andy does go through this issue because the price is very much depressed and this may one of the few scenarios where the straight call is actually a better risk reward.

  36. Was the July run to $705 after an earnings miss, and Andy pointed out that shouldn’t have happened, was that a manipulation to precipitate this flash crash? It was a run on low volume, which was not intended to last. It was intended to fail, thus triggering a series of stop loss triggers that would bring AAPL back down to more profitable levels, especially looking at next year. It was a classic pump and dump. Thoughts?

    • The reason I ask is because it has implications to recovery.

    • Why buy at $700 if the price could be $800 to $1,000 next year when an investment in a kinda risky scheme could bring the stock back to ~$500. Looks totally manipulated to me, flash crash that won’t end after a run from $600 to $700 that shouldn’t have happened. Well those kinda tides can turn quickly.

  37. “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. . . I know and Horace knows it very 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.”

    I certainly hope that AZ has access to more information than me and thus he has deduced the basis for the extraordinary share price growth he is projecting but can we at least pose possibilities? Horace routinely states on the Critical Path that iPhone growth correlates strongly with the number of distributors selling the phone. Is it plausible that in 2013 Apple (a) signs a deal with China Mobile and (b) the Brazil Foxconn plant becomes fully operational and Apple has already inked deals with several large distributors in South and Central America that will propel growth for this fiscal year? I am uncertain of the number of distributors in these markets. Yet even if Apple trades at a P/E of 15 that implies an EPS of $63.33 (given a stock price of $950) and given a EPS of $17 for Q1 2013 Apple’s TTM EPS would be $47.29 and thus Q2 2013and Q3 2013 would have to average $17 to attain this projected EPS. Given how analysts are forecasting a slowdown in the smartphone market in general and iPhone specifically, there optimism would have to be driven by (c) a new disruptive Apple product, which I presume is a refinement of the current Apple TV replete with an outstanding number of content distributors. I suppose a + b + c = Bora Bora for the rest of my life :)

  38. EBR wrote a little while ago:

    “Unlike AZ, i do think option pricing is set the same way that vegas sets its sporting book odds. its not a mathematical equation determiend by the MMs. its based upon supply/demand, bidders/sellers, just like Vegas.”

    This is incorrect. Option price *is* determined by mathematical equation (although not developed by MM-s) and NOT based on market expectations.

    The price of a spread (obviously) is simply the difference between two option prices. I hope we can agree that a call will not sell for more if I buy it straight or if you buy it as part of a spread? (Let’s ignore bid/ask difference for a minute.) Options pricing has NOTHING to do with ‘baggers’ and such.

    The one variable in these equations that changes day-by-day is the volatility . The others (time to expiration, current price, risk-free interest rate and dividend) are pre-determined and/or change very slowly. And volatility is also objective in the sense that MMs can NOT manipulate it.

    Options prices between different strikes and expirations are efficient and NOT determined by MMs! If they go out of whack, arbitragers step in and correct it. There is no such thing as negative or positive sentiment or EPS expectations in option pricing!

    The option price (again: let’s ignore spreads, those are just an arithmetic manipulation) does include the volatility — in some sense this is the market’s ‘expectation of the price movement. (How and when to use historical volatility, that is a PAST fact as opposed to implied volatility is beyond the scope of this discussion.)

    And this indeed a mathematical formula, so the option investor (the same was as the stock investor) has an ‘edge’ here: he can argue / assume / bet that because of some future event these purely mathematical equations will NOT apply.

    Sorry for the long rant: I just wanted to point out that although option speculation may feel like Vegas, option PRICING is definitely NOT Vegas.


  39. For the love of all things holy: PLEASE CLOSE THE COMMENTS SECTION

  40. Tomorrow I will go to the Valley Fair Mall in San Jose where Microsoft has a bigger store than Apple and I will see many more people at Apple with many boxes going out the door. That is is my way of dealing with the temporary situation of the price of Apple stock. That is to me the BEST EVIDENCE. Some people go to church. Whatever works for you is great.
    My only complaint with Apple is that they do not explain the advantage of the cellular option. It separates the Ipad Mini from the Kindle etc.

  41. Folks ,

    As I’ve said before, I am fully expecting at least $63 ttm next Oct and $74 Jan 2014, I’m expecting a mid 15 PE and a price of $1000 before year end, that’s mostly due to the rise of TTM to $74 within that Q, at $74 Apple will be will be above $1000 even at 13.50 PE compressed with the Jan report. However, The only issue I see at this point about Apple closing at $1000 next year is the number of BC members that get into 900-1000 spreads, that could turn into a situation where Apple surpasses 1000 next fall but only close at 950 on expiration week only to gap above $1000 with the earnings the week after, so you won’t get the full value of those spreads if there’s a big open interest on them, obviously it’s way too early to think of that now but it’s something that needs to be monitored in the final months of next year. So if you are fully expecting these to be in the money u should have a higher target of 1000 so it’ll have a $100 cushion. I think once it hits 1000 it’ll hit $1100 as well to make it a $1T market cap, so u should also have a internal higher target if u want to bet on the full 1000 close. I also think the stock will split before then so maybe all of these will be a non issue, just something to monitor. As for me I’ll mostly be playing it with open ended calls maybe 700 strike. Let’s see. Best wishes to a quick recovery to highs !

    Btw from Andy’s tone today u should feel better about him not closing shop in Jan if he’s still guiding for 14 spreads !

    Good weekend everyone !!

  42. Andy. Thanks for your insight on how we can unfuck the current situation. I will get home from vacation on Monday sometime and will dig into my options plan going forward, but you present 2 possibilities and I may use a combination of the two, as I still feel that a late Dec $650 price is possible. Israel has stepped up attacks on Hamas in Gaza, and I hope this does not ruin our Monday. I have the same drawdown as most here on Jan spreads, but have not viewed my accounts on vacation….who needs to ruin a vacation. But Friday’s action gives hope we have bottomed, need follow through or it is just a bounce. I already have Jan 900/1000 but will look to reposition more at the best time, maybe a potion on this current run and more later in Dec. Please know many here including me have not lost faith in your abilities and your analysis….I will take your word that the facts of the argument for a $1000 in 2014 will be compelling and will continue to follow your lead. But my number one goal is to recoup my drawdown, and if it takes a year, so be it. It’s a draw down, not a secured loss. Thanks again and hope you are recovering your health soon. Dan

  43. Rob Isenberg (robise)

    Hi Andy,

    I’m another member that has almost never commented and I wanted to take this opportunity to say a heartfelt thank you. Your work has been nothing short of inspiring to me. I’ve learnt more about investing in this last year that in my entire life up to that point – and I’ve only scratched the surface of your material and haven’t had the time on a daily basis to learn all the lessons that you’re trying to instill. I feel privileged to have access to your thoughts and material.

    From what you wrote, I’m mot clear whether your decision to quit BC was purely about the stress/hassle/emotions of member comments during this past correction, or whether you’re fed up with the stupidity of people in your industry who can be so blind as to misvalue Apple to this degree (or something else entirely).

    Far be it from me to tell you what you need to do, and what’s right for you, your life and your family.

    What I will say though is that I appreciate the opportunity you’ve given us. I don’t take it for granted. You’ve inspired me to see that I have a shot at becoming financially liberated through investing over the next 2-5 years. And I’ll be an avid member of BC for as long as you’re willing to give us.


  44. Positive divergence
    NASDAQ100 Hourly Shows Upward Momentum Going Into Next Week

  45. Andy,
    Like nearly all of the posters this weekend who don’t want you to fold BC, we would like you to reassess your decision over the next two months. You have made a major difference to the 99% of us in our investing lives and it has all been positive. The 1% who spew at the mouth are plain wrong, disrespectful and should not be part of our community.

    Please keep in mind that 99% of the members are with you and they need you, your dedication and your knowledge.
    Richard Tauber

  46. iPad mini 2 weeks wait .ipad 4 no wait .that worries me

    • Why? They changed the connector and CPU, so no ramp up and initial demand spike is involved with iPad4 release. There wasn’t a backlog of demand for the iPad 3, so there shouldn’t be a backlog for iPad4. I wish Apple could do these surprise upgrades more often…people waiting on a new device kills demand in the short term.