Wednesday, January 6, 2010
ACCESSIBLE TERRAIN
A PIZZA DAY
It is on Wall Street anyway. The market ended flat today for the second day in a row as traders and investors try to make up their minds about the new year and where to put money to work. The technology sector was weak, while the agricultural, metals, and oils were strong. The financials were flat. So a mixed day with a flat result. Sounds like a pizza does it not? A flat food with mixed ingredients. The sector with the most noticeable move has been the oils. Many of these we mentioned as plays in our newsletter and most hit their respective profit targets today (after just two days). See the list below. Several others went sideways and we will continue to let them take a rest and enjoy the pizza until it is time to punch the time card and go back to work again. The question is will they punch in or out? We will soon see.
TRADE THE EXPECTATION AND SELL THE EVENT: APPLE PROVIDES US WITH A GOOD LESSON
For the last few weeks AAPL has been moving up on rumors about some new “tablet” device that could be announced in late January. We even mentioned this as a possible trading opportunity if AAPL would pull back some and give us a trade heading into this and its earnings (scheduled for January 20). Then the rumors actually became reality as the rumor was confirmed with possible ship dates for the new device in March. As is so often the case with rumored news, especially with AAPL, the rumor is tradeable but once confirmed the trade is usually injured, if not dead. AAPL dropped almost $4.00 at one point today after the news was confirmed and even after Gene Munster, the senior analyst at Piper Jaffrey, made some bullish comments about the company pre-market. One of my rules is I trade the expectation and sell the event (especially when it comes to earnings). Most likely AAPL will be volitile between now and the end of January but since some of the news is out is the trade out as well? Not saying one way or the other but we will soon see.
BATTLES WON (PROFIT TARGETS HIT): DOW, HP, ACI
BATTLES LOST (LOSS TARGETS HIT): NONE
THREE (3) NEW ENTRIES TODAY.