AppleOption Short-Term Portfolio in the final days prior to option expiration will enter a backspread ratio trade.

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AppleOption Short-Term Portfolio sees this temporary fall in Apple shock price as a function of nearing option expiration. Market makers and hedge funds are manouvering the share price to optimize their portfolio. We will keep a long term bullish focus and buy on the dip.

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AppleOption Short-Term Portfolio is taking profit on a few options. Collectively, the portfolio will gain $5,321 after closing out 3 positions. This move will bring the portfolio to nearly 50% cash.

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Apple stock today has climbed over $5 and reached the $188.70 resistance line. It touched this level and then fell back. We will use this as a short term indicator of potential stalling of the stock during option expiration week and will enter the following trade.

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The XLF is the S&P Financial Sector ETF (exchange traded fund).

Fund Profile: (from Yahoo Finance)

“The investment includes companies from the following industries: banks, diversified financials, insurance and real estate. The fund will normally invest at least 95% of its total assets in common stocks that comprise the relevant Select Sector Index. This fund has adopted a policy that requires it to provide shareholders with at least 60 days notice prior to any significant material change in its policy or its underlying index. It is nondiversified.”

Year-to-date performance is down -10.32%. It is also down from the 52-week high of $38.15. The financial sector has taken a big hit, and this years low for the XLF was $22.29. While in the short term the fund might drift lower, AppleOption has a price target of $32 by the end of the year. Just last week we were trading above $27.50.

Chart Examination. The 5-day shows major consolidation to the $26 strike. In fact there is a major support level at $25.82 and then again at $24.75. On the 3-month chart we see the 50-MA support at $25.71, while both the 5-EMA and 20-EMA sit at $26.40. We feel the timing is good to buy into the XLF.

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Weekend reading caused us to stumble upon a company called Nanosolar. They claim to have developed a process to develop 100x thinner and 100x faster solar cells. The next great IPO to keep an eye on.

http://www.nanosolar.com/

Week 19 of 2008 trading is finished.
Take a look how AppleOption has performed against the market this year.

S&P 500 -4.77%
Dow Jones -3.12%
NASDAQ -5.89%
Apple -7.39%

AppleOption Short-Term Portfolio (STP)
      Started the year with $10,000
      Current portfolio value $17,048.60 (after commission/fees)
      Year-to-Date Gain 70.4%

AppleOption Long-Term Portfolio (LTP)
      Started the year with $25,000
      Current portfolio value $28,297.62 (after commission/fees)
      Year-to-Date Gain 13.1%

Index Condor Portfolio
      Started the year with $10,000
      Current portfolio value $10,352.87 (after commission/fees)
      Year-to-Date Gain 3.5%

If you are not yet a member of AppleOption, sign-up today and discover how we trade. We’ll teach you by showing all of our portfolio trades in real-time. Join AppleOption Now!

S&P 500 5-day

Dow Jones 5-day

NASDAQ 5-day

Apple 5-day

S&P 500 3-month

Dow Jones 3-month

NASDAQ 3-month

Apple 3-month

     
AppleOption Short-Term Portfolio

The STP made a bold move after Wednesday sell off. This trade alert uncovered many of the current positions. We spent the remainder of the week waiting for a light volume rally, as the goal was to be covered into the weekend. Our desired covering price was never reached and now we hope nothing drastically turns down over the weekend. There is good news about the iPhone (see the Apple News discussion below). We may be lucky and see a update sooner than later which would work in favor of our portfolio’s current position.

AppleOption Long-Term Portfolio

As Apple continued climbing it’s way back to $200, our the LTP made the following trade to keep our portfolio balanced. We are well protected to the downside for the near term, as Apple has had a fantastic run. It now requires a healthly consolidation and much occurred during the later half of the week. The sell off was on small volume, 24 million shares (down -42%) from the typical 42 million shares traded on an average day the last 6 months. Unless there is an iPhone announcement in the next few days, the stock will likely continue a bearish consolidation. Look for major support levels at $178 (3% decline) and then firm support at $169.90 (7.4% decline). The portfolio is well positioned heading into option expiration.

Index Condor Portfolio

By request of multiple AppleOption members, the focus of this portfolio is in the process of restructuring. In addition to iron condor trades, we will also perform other trading styles that are applied to a host of index ETFs. The portfolio had no trades this week as we prepare to transition the overall trading style of the portfolio.

     
Up-Coming Earning Reports: for a full listing of companies

Monday May 12th
      McDermott - MDR
Tuesday May 13th
      Electronic Arts - ERTS
      Applied Materials - AMAT
      51job - JOBS
Wednesday May 14th
      nothing major
Thursday May 15th
      Autodesk - ADSK
      Hewlett-Packard HPQ
      JC Penney - JCP
Friday May 16th
      nothing major

Apple News:
Over the weekend, we noticed that the iPhone is “currently unavailable” from the Apple Store Online. Earlier in the week the cell carrier O2 in the United Kingdom also posted that they were “no longer available.” We are seeing a clearing of the product channel, the 3G iPhone is expected sometime in June. However, if the supply channel is nearly empty this might cause an earlier release.

AppleOption Short-Term Portfolio is announcing a trade alert.

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