I am long Apple and Google going into Monday morning via in the money weekly options. I will not be one of those people fighting this tape. We are in an up trend, this is a bull market. Prices are going up not down, yes we could reverse, but we could also continue upwards for the remainder of the year. QE3 could be the catalyst that keeps us going with the Bernanke Put back stopping the financial sector. In Europe Draghi is also doing whatever it takes to keep the financial world on track. These are strange times we live in with an unprecedented amount of government interference with the free markets. But we can not fight the FED or the ECB, while the music is playing we really have no choice but to dance. This is likely the creation of a new bubble, but we need to profit form the trend before it bends. For the time being the game is short the US dollar, long gold and Silver and long equities. We still have to cut or losses short, and manage position sizing, but this is the direction we should be trading in.
Apple is currently in a short term range of $693/$705 since breaking above $700. It would be good to consolidate here for awhile before making a run to $750. Once again I do not understand the doom sayers. This is NOT a speculative bubble, this is a stock with a 16 P/E that is growing at 78% in earnings so far this year. This is a value stock with growth stock fundamentals. It is not even over bought at these price levels. This stock goes up and is revalued with its real earnings growth. Investors and traders still can not believe that it can continue to grow with its size of market cap. But Apple keeps proving that it can. I will go to the side lines if we fail to hold the $700 line by the end of the day, but I have great confidence in this stock continuing to trend upwards until something really changes in the company or the market.
Google is on track to hit its all time high of $747 based on current price action and fundamentals. This big cap is in the 17th best group in IBD with a 25% annual earnings growth rate and 23% ROE. The chart is exactly what I like to see, support around the 5 day ema in an uptrend that is getting stronger. I expect this stock to hit its all time high this week. I will however be stopped out if it plunges back near its 5 day ema and does not recover it by the end of the day. This is what a monster stock in an uptrend looks like. I would not short this stock with my worst enemies money, there are not great odds in fighting mutual funds while they are accumulating a favorite stock.
