Thursday – Trading in an Untradeable Market

What a mess!

As we predicted, AAPL dragged down the Nasdaq yesterday but the rest of the market did fairly well with NYSE advancers outpacing decliners on decent volume.  71 stocks made new 52-week highs vs. just 26 making new 52-week lows and, as you can see from Dave Fry's AAPL chart – even AAPL managed to find some support at $536 for the moment.  

We bought back our AAPL covers, as planned, and now we are hoping (not a valid investing strategy) for a bounce – preferably before we drop back to test that $505 line.  It was certainly unexpected to get such a sharp move down in a single day – AAPL lost the ENTIRE market cap of all but the top 83 of the S&P 500 companies in a single day ($35Bn), which is really amazing as just 30M $550 shares being traded ($16,500) so, even if every single one was a sale with no buyer in site – the company still lost more than twice as much market cap as the total of all the shares sold in one day.  

Obviously we like AAPL down here (anything below $555) so I'm not even going to get into that one again.  You can sell the 2015 $400 puts for $51 and that's a net of $349 on AAPL, which is another 35% off the current price and, if you don't like AAPL enough to take that deal – why are you even looking at the stock?  On Tuesday, we shared our $25,000 Portfolio positions and one of them was SVU, where we sold the Jan $4 puts for $1.60.  Yesterday we got some good news regarding an asset sale and the stock flew up to $2.90 and we'll probably take the quick profits and run because we're not loving the deal – despite the positive market reaction.  

As I said on Tuesday, there's no shame in cashing out our winners and getting back to cash into the new year.  There will certainly be plenty of things to trade in 2013 if we have some cash to deploy.  In Member Chat on Tuesday, for example, we were discussing how to best play LULU, who had earnings this morning and my comment to Members early in the morning was:  

If I were going to play it – I'd say

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