Selloff next week?

[Grieve]

Miserable jobs number today, and market action has been weak recently already. Could finally get that long awaited sell-off next week. If it's like 2010 or 2011 (which both started the year strongly as well), it could be pretty steep - maybe 10-20%.

Worth going short, or selling and buying back later ("sell in May (April) and go away"?) I still think the year will finish out very strongly, and I'll definitely hold my financial and Apple spreads.

Earnings season starts next week as well (Alcoa on Tuesday, then Google, JPM, WFC, etc). Analysts have been lowering estimates for a while. Either that means earnings season will be very bad, or they've lowered them so far that it's an easy hurdle to beat...

[Breand]

Heh I was thinking the same thing today. I hope so, I really want to unload the TZA that's been an albatross around my neck.

[Vanraw]

yea I have some long shorts all ready. Nut also sitting on a load of cash in my IRA waiting for dip.

Euro trash is still flopping around too.

[Grieve]

I haven't sold yet...actually bought more AAPL call spreads yesterday. Including a Jan 2013 $900/$940 spread...costs $310, pays out $4000 - worth a shot! Also some $810/820s (cost $170 each, pay out $1000 each).

[Vanraw]

Only question now, is how low will it go.......

At some point we will have a good entry point. But I don't think we have seen the bottom yet.

[Breand]

I still need another 13% gain on TZA just to break even.

[Grieve]

All depends on earnings.

I bought a couple of calls in stocks that were down a lot today and are reporting earnings before options expiry.

[Grieve]

Alcoa beat, that's a good start!

[amins]

Strangle Option / volitility / play for earnings are interesting.

I've come to find that setting it up 2-3 weeks before the earnings and then dumping right before worked better than setting it up 3-5 days prior to earnings and dumping after. The Volitility Crush just kills profit.

[Vanraw]

On earnings, interesting take on what this guy expects. 7 of the 10 S&P sectors will disappoint. Unfortunately for me, is he thinks Financial sector is one of the winners.

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[Grieve]

Well you guys are definitely getting your selloff! Looks bad again today. This is going to be a key week, with lots of big earnings reports, especially Apple, but even good results may not trump the craziness in Europe (plus the "sell in May and go away" mentality).

[Vanraw]

China manufacturing down 6 straight months. This sure seems like a leading indicator to me.

[Grieve]

Should be a good day tomorrow - Apple crushed again! So much for all the Verizon and ATT panic. I bought more options today...glad I stuck with my guy feeling...

[Breand]

was so close to buying more today, but got caught up with work and didn't get to it...my loss.

[Grieve]

I don't think you are too late. Multiple analysts have one year price targets over $800 now, and one has a target at $1111. That's his expectation for the stock price within the next year.

The iPhone 5 is going to be huge, especially in China, and if they launch iTV before the end of the year as well...I think $1000+ is very possible.

Last week a couple of people from my Shanghai team were over to visit. What do you think their priorities were outside of work hours? Exploring? Visit the tourist traps? A few beers? Nope...their number one priority was for me to take them to the local Apple store, where they loaded up on iPhones and iPads to take back for family and coworkers in China (yeah, they are cheaper here than in the place they are made - go figure).

20% of this most recent quarter's revenue came from China - 300% of what it was a year ago. And China Mobile, the biggest mobile operator in the world with 660 MILLION subscribers, doesn't even sell the iPhone yet. It almost certainly will sell the iPhone 5. If only 10% of those subscribers buy it, that's 66 million new subscribers...compared to 35 million iPhones sold around the whole world last quarter.

So...I think there is plenty of growth left, and I think $1000 is going to arrive sooner rather than later.

Remember, you can always take the low risk path and buy way out of the money call spreads. I bought another 9 Jan '13 $900/$910 spreads yesterday before the numbers came out. Total cost, $270 plus commission. Total potential payout, $9000. You can still buy them for $55 each now...

[Breand]

I will take a gander, may be time to finally dip my toes into that.

[Breand]

Tomorrow is going to be brutal. JPM just had an emergency call saying they lost 2 billion in 6 weeks. They are down 7% in after hours. May finally get to unload my TZA!

[Grieve]

Yeah, I was just gonna post the same thing and ask if you still had your TZA.

I have JPM, C and BAC, of course...

[Jakensama]

Last week a couple of people from my Shanghai team were over to visit. What do you think their priorities were outside of work hours? Exploring? Visit the tourist traps? A few beers? Nope...their number one priority was for me to take them to the local Apple store, where they loaded up on iPhones and iPads to take back for family and coworkers in China (yeah, they are cheaper here than in the place they are made - go figure).

That cheaper here part is going to be a bottleneck to chinas growth, especially if they continue to not cater to the lower end. The Nouveau Riche in Shanghai love their expensive toys (these are the people that support a mall that is entirely higher end designer shit - Gucci, Prada, Hermes - in a city where you can get the exact same articles with one miniscule different stitch down the road on chi pu lu...), but the average Chinese in the cities that aren't shanghai are going to have a hard time jumping on that bandwagon when you can get so many knockoffs or other brands much cheaper. I've never seen so many bootleg ghetto tablets as I did last time I visited the folks.

Also, the bigger a player apple becomes in China the more fun its going to have dealing with the government. Google can testify to how fun that is.

[Breand]

I still have C and FAS but I bought those in Feb 2009 so they couldnt have gotten much lower than that heh.

[Grieve]

That cheaper here part is going to be a bottleneck to chinas growth, especially if they continue to not cater to the lower end. The Nouveau Riche in Shanghai love their expensive toys (these are the people that support a mall that is entirely higher end designer shit - Gucci, Prada, Hermes - in a city where you can get the exact same articles with one miniscule different stitch down the road on chi pu lu...),

I found the same thing when I was in Bangalore. I was a 5 star hotel next a super-high end mall (with machine-gun toting guards outside), and literally a few yards away were these incredible slums.

but the average Chinese in the cities that aren't shanghai are going to have a hard time jumping on that bandwagon when you can get so many knockoffs or other brands much cheaper. I've never seen so many bootleg ghetto tablets as I did last time I visited the folks.

I don't think Apple will go very low end, but they are rumored to be coming out with a 7" tablet for $200-250 later this year. And they will probably keep dropping the price of the iPhone 3GS.

I was reading an article the other day about the Chinese tradition of "Guanxi" ("begging the cow's butt"!), where workers are almost compelled to buy their boss expensive gifts (like iPhones or iPads) in order to gain favor and promotions, as well as "mianza" ("maintaining face"). It also pegs the number of upper class elite at 70 million. Here's the article - a good read:

http://seekingalpha.com/article/516541-w...nate-china

Also, the bigger a player apple becomes in China the more fun its going to have dealing with the government. Google can testify to how fun that is.

They are already having fun with the government, via the Foxconn "controversy" and the Proview case. They are handling both pretty well I think, though. You also have to look at this way. Apple indirectly is responsible for the employment of hundreds of thousands of Chinese. Do you think the government there wants to risk Apple moving operations to somewhere else and putting all those people out of a job?

[Vanraw]

Yeah, I was just gonna post the same thing and ask if you still had your TZA.

I have JPM, C and BAC, of course...

I still have my FAZ, so Im glad. Im still in the red though.

The main question I have at this point is how low will the market go. Spain is a major focus now on top of JPM. However, Im thinking on triggering on the FAZ and taking the "less of a loss" then gambling on a larger drop.

What do you guys think the worse case is for the overall market now? I think we might see some volitility for a soem time now with a channel on the dow between the 12.7k to 13.2k area.

Over all the earnings have not been bad.

[Breand]

well I am amazed the lemmings are keeping last night's news contained to just the banking sector.

I think Europe could very easily keep the market depressed for some time. I'm not sure what the bottom would be, though.

[Grieve]

Tough to say right now...US economic news seems to be getting worse, as well as the Europe problems. And a lot of people follow the "sell in May and go away" mantra. I think we'll be higher by the end of the year, but who know for the next couple of months?

I bought some September JPM calls today, though. I think they will come back from this.

[Breand]

Annnnndddd Im out of TZA. Finally down to a 4% loss...I'll take it.