Andy Zaky

Exploiting the Downside of the Markets

LOL. This article is late to the game man. The S&P500 is getting close to the previous bear market lows and the NASDAQ is approaches rock bottom prices that we haven't seen since the tech bubble collapse. The risk reward for shorting here is way off balance. There's maybe a case to short AMZN here with a P/E that is twice that of AAPL, GOOG and RIMM. But shorting AAPL and RIMM here is a dangerous game. GOOG might make for a good short as the market is laboring under the belief that on-line advertising has disappeared. How long this could be kept up is anyone's guess. GOOG and AMZN are maybe shorts if you're in for a very quick trade. But I wouldn't even think about shorting AAPL or RIMM. That's just stupid. AAPL has been steadily outperforming the market over the past few weeks and while the NASDAQ continues to make new lows, AAPL has yet to break its low set in the first week of October. RIMM has been on fire as of late. Shorting these stocks would have been advisable during the first week of October, but doing so now is a disaster waiting to happen. If history has taught us anything, bear markets end with inverted head and shoulders and when the market rebounds, it does it fast and furious.

Here's how the S&P, NASDAQ and DJIA bottomed in the 2001-2003 bear market:

stockcharts.com/h-sc/u...=$SPX&p=D&st=2...

stockcharts.com/h-sc/u...=$INDU&p=D&st=...

stockcharts.com/h-sc/u...=$COMPQ&p=D&st...

Notice how each of them ended their respective downtrends with an inverted head & shoulders. Also, the 74' bear market ended in the same manner. Inverted head and shoulders.

Now take a look at this bear market. I see a distincted left shoulder, and a head in progress.

stockcharts.com/h-sc/u...=$COMPQ&p=D&yr...

Shoulder at 1,542.45; head being made right now; and I imagine we see a massive rally in December as hedge funds try to cut their losses on the year. I could see the NASDAQ testing the neck line at 1700. Then sometime in January, I see the NASDAQ putting in a right shoulder. If the economic data starts look positive, this bear market will be over by March. And you want to short here? You're playing with fire.

Is Apple More Undervalued Than Other Tech Sector Stocks?

To Grouch:

Actually it will. That is current deferred revenue. Current in that it will be recognized within 1 of the date of the statement of deferred revenue. It will be recognized from September 28, 2008 to September 27, 2009.

Is Apple More Undervalued Than Other Tech Sector Stocks?

To Grouch:

Actually it will. That is current deferred revenue. Current in that it will be recognized within 1 of the date of the statement of deferred revenue. It will be recognized from September 28, 2008 to September 27, 2009.

Netflix May Dominate The Online Video World, But With What Business Model?

I guess you fail to understand that Apple owns 90% of the video download market right now.