Monday, November 27, 2006

Mid Afternoon Market Comment

For all the reasons outlined this morning, the stock market is lower.

We initiated a put position in Apple (AAPL) earlier this morning and are presently sitting on a gain of about 50%. We stand at the ready to sell before the close. I have nothing against Apple per se, it will likely perform well going into earnings, but following its huge run (with that tell tale parabolic look on the chart), it should come as no surprise that it would run into a bout of profit taking especially on a down day for the overall market. At some point soon, the stock will likely cross the $100 mark, but not before some healthy consolidation.

Here's a 5 day Apple chart... classic double-top.

IF there is a final hour scamble in the overall market for the exits ahead of economic data this week, the $89.00 level could be tested today.

We also picked up calls tied to the Volatility Index (VIX) since the market has become, well... more volatile. The VIX Dec12 calls are also up around 40% at this point, and we may take a quick profit before closing.

Gold is trying to get back to the overnight highs, now back above the $641 level. We're still looking for a run toward $645 as the dollar continues to struggle.

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