The SPY made a low of $137.13 this morning. Some notable names in trading today were Molycorp (MCP), Sears Holding Corp. (SHLD) and Apple (AAPL). MCP jumped 16% on news that the company was acquiring Neo Material Technologies. The street is obviously reacting well to this news by bidding up the stock. SHLD continues its meteoric rise and was up another 3% today. This rise is pretty amazing considering shares were left for dead in January, trading around $30. APPL was up AGAIN today. It feels so weird saying, but it does not surprise me. Shares were trading up 0.66% to $545.64 in late afternoon trading. The European finance ministers approved another $47 billion aid package to help Greece. This was approved by creditors as well as the swap holders. Have a good Friday everyone.

Goldman Sachs cuts Q1 GDP forecast to 1.8% on trade deficit data,ha what a joke. This is the fourth GS GDP revision in two weeks. Hmm, is a Goldman “fade trade” coming to a city near you? US trade balance is the worst it has been since October of 2008. Dennis Gartman reported on CNBC that he is extremely “bullish” on Gold in terms of the Yen.

AKS- is higher .31 or (4.37%) at $7.34 after the all important NFP jobs report. In my opinion, this is an oversold technical bounce in the stock. The increase in PPS has nothing to do with the companies fundamentals. In my opinion, I see continued selling pressure in AKS in the near term.

Chart Glance: Broader Moving Averages prove that GMCR is still in a down trend and momentum indicators do not show an oversold stock as of yet.
Support 1:$47.50 Support 2: $45.00

GMCR: SBUX is up nearly 3% on news of a “single-cup,” home coffee machine. This doesn’t bold well for GMCR. GMCR were among the few “BIG PLAYERS” in the “single-cup” home, coffee machine space. SBUX presence really creates complications for GMCRs business model. Bank of America downgrades GMCR to “neutral.” Will GMCR continue to drop off a mountain? Is the GMCR upward momentum over for now? Traders love playing the SBUX/GMCR spread (Long SBUX, Short GMCR) and it seems to be working out well for them

ARE THE MARKETS HALTED BEFORE THE BIG JOB REPORT TODAY..??

Hedge Funds have found a loophole in Greek CDS. If this Reuters report is true, this can cost Athens more than 3 Billion Euros. Gold is trading at $1700 once again as Silver is approaching the $35 level. I guess investors want a good inflation hedge to add to their portfolios. 30Y Treasuries had its largest 2 day rally in nearly two months. Will there be more JPY weakness to support the thesis that risk is back on? Also, the ES average contract size traded was the highest its been in nearly 2 months. Are the big boys anticipating a nice size move after the NFP Job report? In my opinion, the USD will continue to weaken putting a bid under Crude Oil sending it over $107.5 again.

Unprofitable: This trade is unprofitable if DNDN closes under $8.62 by April 20, 2012.  The most this spread can be worth is $1 minus the $0.38 I sold it for, so my maximum loss is $0.62.  I am risking $62 per 1 lot to make $38 on this spread.

Reason I Like This Trade: When DNDN was trading $9.25, I saw someone sells 6668 DNDN April 9 Puts for $0.95.  This is very bullish activity, so I wanted to get LONG the DNDN.  I wanted to make a goof risk vs reward trade, so I thought this was a great way to play DNDN to the upside.  In Our “LIVE” Trading room talked about this trade in real-time, but have to be in the room to hear to LIVE.   

UPDATE 3.9.2012 With DNDN popping the minute these Puts were sold, the Put Spread is currently worth $0.24.  Even though this Spread is up about 35%, but I am leaving it on to not chop up myself in commissions.  

UPDATE 3.12.2012 With DNDN lack of movement, this Put Spread is worth $.24.  Once again I will leave this trade on, so I do not chop myself of commissions.

UPDATE 3.15.2012  With DNDN trading in a small range, time is on my side, so I will leave this trade on for more profit potential.

UPDATE 3.22.2012 With DNDN not selling off to the $9 level, this trade looks safe and the Put Spread is currently worth $.22.  I will leave this trade on for more upside profits.  

UPDATE 4.9.2012 This spread is currently worth $.08, I am bidding $.05 in the book for it to take profits and move on.

UPDATE 4.16.2012 Another Put Spread that I should have closed, because now it is worth $.38 and I will leave it on hoping for a POP in DNDN between now and Friday.

UPDATE 4.23.2012  I took this spread off a little too early and bought it back for $.13.  Taking profits and moving on.

Read more about closes by www.keeneonthemarket.com

When weakness occurs in equities, this is generally what you want to see for confirmation. Even at $600, Apple’s valuation is not outrageous. If you are using next year’s forward EPS estimates of $48. That gives you a P/E of around 13x. This is still very reasonable, but my fear is that being long Apple is becoming a very crowded trade. Every day I hear someone talking about it and when the whole world thinks they know something special, it generally does not bode well as time goes on. The volatility in Apple is become much greater as well. In 2011, Apple rarely made intraday swings of 10-15-20 points, but now it is becoming normal behavior. Apple is the greatest company on the planet and there is no argument about that, but stocks do not go up in a straight line forever and that is a fact. It feels like investors are looking at Apple as an asset class, instead of a company that is driven by products. I firmly believe that Apple must close above $545 if the market continues to uptrend in order to continue its rise. If not great risk/reward short sets up might start to appear.

Written by Cameron Patrick
@Cam_Patrick

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