Friday Morning Update

Apple Jumps, as Expected

By Bryan Bottarelli
Friday, June 19, 2009 10:12 AM EDT
Fri, 19 Jun 2009 14:12:00 GMT

Dear Bottarelli Research Member,

Good morning.The major market averages are opening to the upside, but I’d characterize today’s upside move as “dull.” In other words, the bulls are still trying to lift the markets higher, but their recent efforts have only lead to minor upside moves. As you can see from the Dow chart below, the last seven (7) up-market days have resulted in very minimal white candlestick bodies. This indicates that the upside momentum is losing steam.

INDU

Furthermore, the leadership in the financial sector has all but disappeared. It’s sure a bummer when the government isn’t pumping billions into the financial sector, huh? For these reasons, I’d like to remain positioned to the downside via our DXD July 46 Calls (DXD GT) and our FLR July 50 Puts (FLR SJ).Hold.

FLR

At the same time, shares of Apple (AAPL – NASDAQ) are moving up today, which has pushed our AAPL July 140 Calls (APV GH) up to a high of $5.40. This supports my thesis from yesterday, which said that recent statistics show that Apple’s iPhone is now cutting into RIMM’s Blackberry market. Hold for more upside.

AAPL

And finally, the GDX is hammering out support at the 50-day moving average, which should ultimately benefit our GDX July 40 Calls (GDX GN). I recently learned that Northwestern Mutual Life Insurance (the third-largest U.S. life insurer by 2008 sales) bought $400 million worth of gold for the first time the company’s 152-year history. This tells you that more and more investors are becoming aware of gold’s appeal right now, which should lead to higher prices going forward.

GDX

As always, I’ll continue to keep you updated as the trading day progresses. But until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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