Tuesday, March 30, 2010

BAGAKOAA March 30, 2010 We need some people in the game.


March 30, 2010 We need some people in the game.

Consumer confidence was basically flat, up from a dismal figure of a month ago but just barely above a four month average. That was my guess so give me another point in the game. What is really concerning is the lack of volume. No one is trading.

The market got off to a good start and by the time I hit the office it was in slightly negative territory. I knew immediately it had to be the ORP effect. Yes Obama, Reid, and Pelosi were on TV and the market was down 46 points from where I left. They got done signing “the bill”, and then the market came back a bit.

I decided to take some profit. I took profit in most of my double digit gainers including AAPL, IBM, INTC, CVX (not quite double digits), RIG, COCO, GD, ARMH, RPM, (Closed that position), GIS, MCD, BA, a HD Call, and an INTC Call. I also adjusted a couple of other portfolios accordingly. Then I reset some stops in light of recent gains. Most of my stops are at 8% below current market levels.

Here is my reasoning. There are a lot of short and or put positions that are hurting right now from hedge funds that sold short or puts in January. They will have to buy their way out of those position soon. Their investors will be wanting cash for tax purposes in the next week or so. I am leaving town to go see the Masters and decided to take the profit now before what I think is going to be a 4-9% adjustment around the 8th of April.

Besides that if you recall, I got out of the market at the 11,200 level in Sep 2006 as I thought the market was way too hot (and I needed some cash). I still believe in this rally that started around the 19th of February, but I think we have come on a little too fast a little too soon and we have done it with very little volume. Kinda weird. So between the market being a little too hot, people needing cash for taxes, the hang over from what should be a pending short squeeze and more importantly my absence, I felt it was a good time to take a few chips off the table.

If I knew I was going to be around and in front of a computer for the next several days I would have stayed in and moved my stops up for the short squeeze then made a couple of more bucks. All I can say is watch your stops.

In closing tonight, a couple of people asked me about AAPL and where it will go. There are target prices of 300-320. These are very doable numbers. There are whisper numbers of 6 million iPads in the pipeline. (Two of them are mine and could be here by Thursday!) Today’s bump was due to a CDMA version of the iPhone for the Verizon network later this year. We have heard that one before. Another case of “buy on the rumor” and quite a few people did. Once the Euphoria of the iPad settles and some players take some money off the table, look for a correction to $211.50 and that will be the closest you’ll be to 200 for a long time I think, but what do I know.

Salve Lucrum.


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