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2-2-10 Morning Market Update

|Includes: AAPL, SPDR Gold Trust ETF (GLD), IMPM, SIRI

9:10am  (originally posted on Kudrna's Stock Market Blog)

As I’m writing this, we are up about 2 pts but swinging between positive and negative.  If this bullish move from yesterday can be trusted at all, today needs to be solid as we are still oversold.  I feel the action yesterday was only an oversold bounce that brought some shorts covering and now they will initiate new positions to do some damage.  I’m sticking to quick trades and not fighting the momentum, whichever way it goes.

SPDR Gold Trust (NYSEARCA:GLD) is up a few points and I’ll keep my eyes on it.  If the dollar continues to weaken over the next few days, Gold should increase and net me nice little gain.  I’m still eying Apple (NASDAQ:AAPL) as well.  It is around $195 so far today and I’m going to watch the charts to see where it settles.  AAPL is trending around the 50 day moving average with some downside momentum.  I don’t think we will see it move all the way to the 200 day moving average but if we did, I’d be buying on the way down as the risk/reward in Apple is too good to pass up.  Even right now, I’d feel content to buy for the long term (6 to 12 months).  I see the buyers who are getting in recently being pressured out by the lack of upside momentum and AAPL still dipping to $190ish or lower but if the market begins and upward trend, that may change.  If not, I don’t see a whole lot of upside spark happening just yet in the stock so I should have plenty of time to buy at favorable prices and will remain patient.

Sirius XM (NASDAQ:SIRI), unlike AAPL, is hitting 52 week highs with upside momentum on the charts.  They have recently been leaking positive news before their earnings reports.  My concern is if they are pricing in the good news before the earnings creating some selling pressure after the earnings release.  I’ll have to watch the charts and news to make a decision leading up to the earnings release.   SIRI has a lot of room to gain in the PPS and I feel they should be valued higher than $1 but because the stock has been hated by most for so long (you’ll always find someone bashing this stock.  The Street.com tends to do that often), I have to take that into consideration as I’m trying to maximize my gains but protect them as well.  I’d rather sell some shares if it peaks around $1 only to pullback where I can rebuy for another leg up.  That is one way to responsibility maximize profits while protecting capital.  Yes, you won’t always be perfectly accurate in these calls but if you are afraid to sell, you will end up losing more in the long run for that bad habit therefore having to make even larger gains just to makeup those losses and get back to even.  As an individual investor, selling is one of the most powerful tools you have….don’t be afraid to use it.  SIRI has some great upside though and unless something negative comes to light with their earnings release, I’m in for the long term.

Another company that brings me excitement for the upside is Impac Mortgage (IMPM) which I haven’t discussed a whole lot lately.  They seem to be in-between large moves to the upside that happens every few months with breathing room in-between moving towards the 50 day moving average.  I expect that trend to continue and will buy more shares closer to the 50 day moving average before the next jump.  I see a powerful trend forming here with a lot of room to move as this once was a stock over $200.  Do some research and be ready to decide what to do when they announce earnings.

I’m going to leave it there as I want to take a look at the action now and update again shortly.  We are up about 70pts as I’m finishing this article so I’m interested to take a deeper look to see if we can trust this and finally gain some upward momentum.  Good luck out there.

Mike





Disclosure: Long GLD, SIRI, and IMPM