Headline - Not out of the woods yet
Last night Dodd Frank held off on imposing further limitations on Gold ownership. However, it looks like another hike in margin requirements is imminent. We are still long Gold with an expectation of a short term correction to 1550.
I am expecting a stock rally as we traditionally get this time of year. This will bring down Gold and Bonds. I still expect our Bond ETF to pay off before Christmas.
I have added 9 specific undervalued stocks to the portfolio. These stocks are in strong seasonal sectors but I was holding off on adding them to the portfolio until apple came out with their earnings. The earnings came last night and disappointed. AAPL was down 10% in after hours trading. It has recovered well this afternoon to 3% down.
November and December are traditionally the strongest time of the year for stocks and we want to capitalize on this factor. The temporary correction in Gold we are expecting will be met with an upward run in stocks. Everyone on Wall Street & Washington wants a year end rally in the markets so I think it will happen.
AAPL is the deciding factor. Everytime Steve Jobs has left AAPL in the past the stock has tanked. It will happen again there is no leadership and noi innovation in AAPL without Steve Jobs. It is a matter of when. AAPL is now the largest company by market cap on the Nasdaq. When AAPL tanks it will be the same as Intel in 2000. It will take down the whole stock market with it.
I am looking to short AAPL on a rally back to 420. The Jan 2012 AAPL puts at a strike price of $300 are currently trading at 2.50 up from 1.90 yesterday. I have added AAPL puts to the portfolio aswell. I would advise you keep an eye on AAPL it's a matter of time.
In the meantime there may be some money to be made on Q4 market exhuberence. The 9 new stocks with buy price, exit price and stops have been added and can be found here.
Just make sure you have your stops well in place.
Best,
Robert McManus
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