This will be the first in a new series of daily blogs with some observations about today’s market action, especially as it applies to the current ideas I have in front of subscribers.

Open LEH Puts:

Well, the trade is working well so far. Earlier today I was up $2k on an $8k investment from last Friday, and tempted to lock in. Gave back $500 so far. However, since LEH was down yesterday on a huge up day in the markets, I have no reason to believe the stock is ready to head back up. Some downgrades today from brokerage firms, and they are rumored to be awash in bad mortgage paper. Let’s hang in another day.

VTOK: New Idea

The response to new idea VTOK was pretty anemic. I believe the story is reasonably compelling, but I don’t think the market really gets how big the Amerivon relationship will be. More will come out in the future.

SPKL:

Stock continues to languish on light volume. The company is doing great, but the stock needs a catalyst to get it moving again. They came out with their 10K, so I will do an in depth BLOG on it. Big winner in the next bull market.

EFSF:

Stock firming a little in a pretty brutal micro environment. I like the second test of the lows, and some volume starting to show up. Might get some legs in this one.

PNWIF:

Showing some signs of life today as it is oversold in a news vacuum. Costco services should start soon. Big winner in the next Bull market.

AAPL:

I missed it waiting for the all time bargain basement steal. I don’t believe the volatile madness is over, so might get another chance.

CREE:

In no man’s land. Sticking with my plan. I have my 2k shares in the mid 28’s- will buy more if I see it back in the $25 to $26 range- will sell calls against it in the $30s. Today, nothing to do at $29+.

Overall Market:

After a huge week and a big Monday, the market should be giving some ground, but it’s not. Bullish, but still half the day to go. The environment is finally improving a little, and perhaps the micro will start to show some signs of life before too long.

Absolutely astounding. AAPL is getting beaten into oblivion, and I for one couldn’t be happier as I still love this company, and am currently out of the stock.

In short- yesterday’s earnings report was awesome- They beat the highest estimate by $.14 per share. $9.6 billion in revs and $1.6 billion in profits- AAPL ended the quarter with $18.4 billion in cash- up $2.7 billion from the previous quarter. Yes, they can pay the bills.

MAC sales were way ahead of estimates, but iPod sales poked analysts in the eye and came in a bit light. (some are guessing the iPhone is eating into iPod sales- you don’t need an iPod if you have an iPhone)

Here’s the rub- Apple forecasted a little downturn in Q2 (calender Q1)- they are looking for $6.8 billion in sales and $850 million in earnings. Pathetic. Why bother even opening the doors- just kidding.

Wall Street is freaking out over the stock right now, and AAPL is getting absolutely hammered. The traders are no longer in charge, but the margin clerks are, with both fund managers and individual investors being blown out of AAPL left and right.

You might think of AAPL as a technology company. I think of it as a consumer electronics/digital revolution company. And, I still believe there is a lot more growth ahead.

Where are we headed? You are not going to believe this, but here’s what the chart is telling me:

Yes folks- here’s where I believe the stock has a chance to go. Believe it or not, $108.50 is my number for an absolutely screaming, irresistible buy. There are no assurances it will get there, but there’s a chance.

Here’s a monthly look at the stock, going back to late 2006 when the stock was $50, and Wall Street just started to understand the power of the digital entertainment revolution- AAPL is the poster child for that transformational change.

I believe, in this irrational market environment, there is a chance the stock will give back a whole 61.8% retracement of that entire move. Once the .382 level gave way, the .618 level moved into the crosshairs.

There will be many more years of growth ahead for AAPL- the new notebooks are unbelievable, and iTV will start to grow.

Since we are looking at a monthly chart, you have to think in monthly terms. Another words, if you take the plunge at that level, think about where the stock will be in months, not days or hours. Put on the mute button and cancel out the ambient noise about the sky falling.

We might not get there, but if we do, I will be ready to take advantage of the situation. If both the stock and the market stabilize, I will revisit the chart.

This might seem a little far fetched, but that’s the market we are in right now.

Comments and questions are welcome.

Steven Jobs came out with fantastic news on iPhone sales, and the new Mac Airbook. The stock was close to $180 today, and is now getting absolutely killed.

I liquidated all postions at about $172- looking to get back in when the bloodbath is over. More when the smoke clears.

This is the third time it has happened since I’ve been recommending this stock. It was victimized by a severe sell off relative to the market- not the company. Two out of the three times (August and November), I stepped up and jumped into the stock by investing in some very high priced calls.

In August I took a long term position, which even if I sold on Monday after a 20 point drop, has worked out fantastic. In November, when the stock swooned from $190 to $155 in three trading days. On that trade, I turned $16,500 into $24,500 in one day.

I hope to do it again. I love these irrational, emotionally driven sell offs. I hope I’m right again.

I bought 10 $185 Feb Calls today at $14.25 ($14,250 investment). Let’s hope it’s deja vu all over again.

In the interest of time I’m not going to put up a chart. Next week I’m hoping for some post holiday stats or some FED intervention next week to send the market higher. The stock could easily rebound 10 points.

Also, next week is the Consumer Electronics Show in Las Vegas, followed by the MacWorld report one week from Monday. Lots of reasons for the stock to rebound without the FED intervening.
If it drops again on Monday, I’m pretty sure I will add to the position.

In some ways Apple has been the best idea I shared with you in 2007. As the stock breaks through the $200 barrier, which was my original price target (now ratcheted up to $225 two BLOGS ago), I have formally changed the price target/SSL to $225 and $175 respectively.

AAPL’s charge through $200 is bittersweet for me as I wrestle with the next dilemma. As I previously disclosed, I still own 10 Jan 130 calls at $12.30- about a $12,300 investment. As the stock breaks through the $200 barrier, that investment is currently worth about $71,000- that’s about 7 times my money since the middle of August- one of the better trades I have made in a long time.

Here’s the problem- these options are going to expire the third Friday in January, and I want to keep a long term position in Apple- one that can appreciate with the next two waves of growth- specifically the dramatic growth of iTV along with dramatic growth in MAC sales.

Have you heard the term “Halo Effect”? Apple has it. Everything the company does is angelic. The positive vibes emanating from several of their product lines (iPhones and iPods) are carrying MAC sales up with it. iTV will follow next year. Did you read what happened today? Rupert Murchoch signed on to provide movies to iTunes from Time Warner. Why fight the rising digital tide in entertainment distribution?

Here’s the chart, dating back to my first edition on the company in August. I’m definitely tooting my horn on this one a little, but I’ve earned the right:

Nothing but good calls and a fun ride on this one. I hope you were on board.

So, what now? I’d like to have some kind of position in this stock for the next couple of years, but it’s awfully tough to buy up here. Between now and the third Friday in January I have to either sell my calls or exercise the option, which might not be a bad idea.

I’m not sure how to do it yet. I will continue to hold on to the options into January as I believe there could be another leg up as the volume of AAPL products sold during the Holiday Season pushes the stock a bit higher. I believe the big surprise will be in MAC sales, where the success of the iPhone combined with the positive reviews of the new Leopard Operating Systems are fueling demand. As a percentage of the overall PC market, MACS have the most upside, and they are now becoming more main stream.

What to do stay invested in AAPL? A very high class problem, but none the less still a problem. I’ll let you know.

Comments and questions are welcome.

Apple- to buy, or not to buy on this big sell off- that is the $billion question out in front of us right now, and I’ve been thinking about it all morning.

Here’s why AAPL has gotten crushed in the last week- it’s a consumer stock, and Wall Street has decided after being continuously wrong for the last five years about the death of the consumer, the consumer is finally dead.

My personal unscientific survey does not agree. I have gone to a couple of malls of late and canvassed a few of my friends- the only ones curtailing spending were those associated with the residential building market- they are in a full blown recession bordering on depression- it will be tough sledding for some time. The malls I’ve been to lately have been jammed.

However, Wall Street feels that with oil prices rocketing, consumers overleveraged on their homes, and savings rates low (that’s a whole other issue- in my view, US consumers do not use savings account for savings- they put money in homes, 401ks, etc to create wealth. Not figured in the US Govt’s savings stats), the US consumer, who represents 82% of GDP, is dead. Hence, APPL isn’t going to sell as many iPods, iPhones, and Macs as previously thought.

So, is this a buying opportunity in a stock that has been extremely good to OTC Journal subscribers, or an ongoing problem?

Here’s a chart of the big fall move in the stock- if you had jumped in when I did, you participated in a big way.

As you can see, the $161 level was the .382% retracement, which should be a good level to jump in.

This is just a seat of the pants analysis, but I believe there are a lot of investors who have lost a lot of money betting against the US consumer.

I am still holding my Jan 130’s calls I paid about $12 for. I just jumped into 10 Jan 155 calls at $16.60, which is probably way to much to pay for those options. If the stock trades back up, those options will probably move about $.50 for every $1 the stock moves.

Today’s 5 point drop below the 38.2% retracement level is a little troubling, but these numbers are not exact- they are ranges. If the stock trades down to $150, I’ll probably take my loss and sell. If not, I’ll hang in there for some positive news. Techs are getting hit a bit today as money is starting to roll back into the oversold financial sector.

This will allow me to hold those options to and through the Holiday season, which I suspect will be great for AAPL.

Pretty risky with all the negative press, but the sell off is no doubt being fueled by hedge fund managers desperate to make sure their gains are logged before the stock really hurts them. Remember, these guys live month to month, and their mantra is “don’t lose money”.

I’m jumping in, realizing I’m taking a bit of risk. Comments and questions are welcome. I might add to the position if the stock starts showing signs a health.

Despite the huge personal win in SPKL, my position in AAPL has been the biggest win of 2007 from a trading perspective.

I took my position when I published the August 18th edition. I mention it near the end. I bought 10 January ‘08 AAPL calls at $12.30 per call- total investment $12,300. I purchased the right to buy 1,000 shares of the stock at $130 until the options expire in January.

The stock closed at a little over $170 on Friday, and that $12,300 investment is now worth about $43,000. A fabulous trade for two months, and one of the best of my life.

I am tempted to cash in. The chart told me $172 was an LPO (logical profit objective) for the stock. However, I have been doing a little reading of late, and I just might hang in there, or perhaps only sell half.

Here’s what’s happening in my view.

• Early returns on the iPhone are coming back with huge customer satisfaction numbers.
• 16% of respondents who are planning a cell phone purchase in the next 6 months are planning to buy the iPhone- that’s an amazing number
• At the end of this month, Apple is getting ready to announce a whole bunch of new products- the new Leopard operating system is driving the highest MAC sales cycle in history
• iPhone sales won’t peak until about 2010- long growth cycle
• iTV could take over the holy grail of entertainment- the family’s den.

In short, I now believe AAPL could be headed to something more like $225. Here’s the problem- do you buy it here? I hope you already own it, but if you don’t pray for a drop off into the mid 150’s- it may never come, but who knows. Tough to buy at this lofty valuation, but you might just want to hold your nose and take the plunge.

If you bought it when I first recommended from the $95 to $124 range, there might just be more upside, so you might want to hang in there a little longer despite the huge win.
Comments and questions are welcome.

Dropping the price of the iPhone by $200 for Christmas- Imagine that. Early adopters are pissed- can you blame them?

If you don’t own AAPL, or don’t own as much as you want, this news is heaven sent as the stock is selling off.

Look at the bigger picture, ask yourself the following question- will AAPL sell more or less iPhones with the new pricing structure? My guess is they will sell more.

You put more iPhones in peoples’ hands, and what does that do?- in my view it pushes MAC sales. Then it pushes multi media digital entertainment sales, and brings it a bit more main stream.

Whether the market believes the iPhone has been more or less successful than hoped for, it is still disruptive technology. No one has produced anything like it.

So, my past entry levels have been $93 and $124- pretty good calls. Let’s look at a good level to jump in now if it keeps selling off:

The stock is now trading at a very favorable entry level. However, if the market keeps focusing on the “R” word (recession), it could sell off a little more.

If you see it at $124, that would be ideal. $132 is still a pretty favorable entry point considering it touched off $145 last week.

SSL now should be around $120.

Comments and questions are welcome.

I don’t really have any comments on AAPL today. I just wanted to get a BLOG up so investors could ask questions or provide comments. If you would care to comment on your iPhone or Mac, that would be appreciated. Feedback on iTV would be welcome as well.