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Trading The Bounce In Apple! AAPL, GMCR, AIG, BBY, HPQ, CLF, WLT, ANR, MOS, CF

|Includes: Apple Inc. (AAPL), AIG, BBY, CF, CLF, GMCR, HPQ, MOS

Happy Thanksgiving!

Since last Friday's amicable showing by the Congressional leaders, who seemingly were on an "amicable' path to reach "some sort" of agreement on the budget to avoid the "fiscal cliff" (yes, many qualifiers are needed when one talks about politicians!), the market seemed to be in a better mood. AAPL, in particular, after being beaten down from $700 to $500, enjoyed a nice 2-day bounce.

We started trading AAPL immediately after the bounce started, when the stock was at $512:
November 2, 2012
08:43 | Ecstatic Plays AAPL ($512.00) Bought to Open 1123C510 Dec 510 calls, at $12.50

We locked in profits along the way and continued to roll up. Yesterday morning, we took profits on the 525 weekly calls with an overnight profit of +117%. Then, we rolled up into the 550 calls and cashed those out for an intraday +113% gain. Here are some of the profits that we took in the past couple of days:

  • 07:54 | HappyTrading AIG ($32.50) Sold to Close 12C31 Dec 31 calls, at $2.00 +55%
  • 07:01 | HappyTrading GMCR ($29.00) Sold to Close 12C25 Nov 25 calls, at $5.30 +91%
  • 12:50 | Ecstatic Plays AAPL ($565.40) Sold to Close 1123C550 Nov 550 calls, at $17.80 +113%
  • 07:54 | HappyTrading GMCR ($26.70) Sold to Close 12C25 Dec 25 calls, at $3.70 +34%
  • 07:30 | Ecstatic Plays AIG ($32.65) Sold to Close 12C31 Dec 31 calls, at $2.16 +67%
  • 07:05 | HappyTrading AAPL ($548.50) Sold to Close 1123C525 Nov 525 calls, at $25.00 +117%
  • 12:14 | Ecstatic Plays AAPL ($524.00) Sold to Close 1123C520 Nov 520 calls, at $12.20 +17%
  • 09:06 | Ecstatic Plays AAPL ($523.00) Sold to Close 1123C510 Nov 510 calls, at $18.70 +50%

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GMCR had a nice 3-day pop, running from $23.5 to $30.4 this morning. We cashed out the rest of our position in GMCR for a +91% profit.

BBY lost more than 13% today on a bad quarterly report. With shoppers going more and more online, especially for electronics, Best Buy's business model seems increasingly outdated. HPQ was down almost 12% after revealing an $8.8 billion write-down for its recent purchase of Autonomy. The overall sentiment on the company was very negative, with disappointment in its business and board of directors.

Coal stocks were weak again, after Goldman Sachs downgraded CLF to "sell"! CLF shares were down more than 12%. WLT fell 3.52%. ANR lost 5.15%. MOS experienced a nice bounce today, trading above $53 before settling down to close at $52.35. Apparently, buyout rumors for MOS are circulating again. CF added more than $2.

The market basically ended flat today, with a small bounce at the end of the day. Technically speaking, the market is consolidating after Monday's big rally. We'll look at the charts on another day. After such a sharp sell-off in the month of October, Monday's rally was certainly an attempt to draw a bottom. But, we might not be ready to just keep bouncing from here. This market is still very much news-driven. So, be a little more cautious. Black Friday's retail numbers could be important to watch. Since a lot of stores are trying to get ahead by opening on Thursday, we may get some insights on Thursday night. One thing, though, SPX did manage to stay above 1380 today.

Remember, Thursday is a holiday and on Friday, the market closes at 1 pm EST (10 am PST).

Good night and HappyTrading! ™

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