Apple Surging Today After Deutsche Bank Raises Price Target To $375 (AAPL)

Deutsche Bank (NYSE: DB) analyst Chris Whitmore has raised his price target on Apple (NASDAQ: AAPL) shares to $375.00, the highest on the Street. “Apple is beginning the strongest product cycle in the company’s history, led by the iPad and iPhone 4 release later this week,” he writes. “Initial demand for the new iPhone is incredibly robust based on initial demand indicators including: pre-orders, search trends and supplier checks.”

During the current trading session, AAPL shares have gained 1.24% to $273.51. The 52 week high in the stock is $279.01. The company now has a market cap of $248.88 billion. AAPL is trading at a trailing P/E of 23.21, a forward P/E of 17.30 and a PEG ratio of 1.23

Benzinga

2 Day Rally

Keystone Trading Group -Market Update The market continued it’s 2 day rally today. The Dow closed up 111.32, and the $SPX up over 14 points closing at 1103.82.The $SPX has been pushed back up near its 20MA at 1109. The volume over the last 2 days has been unimpressive and makes us believe that we have more room to go to the downside.The up volume was almost 100 million less per day than the volume that we had last week on Thursday and Friday. Apple, (AAPL) and Amazon (AMZN), the two strongest stocks over the last year have also been showing signs of relative weakness. AAPL traded down .05 from the open today and AMZN was down .63 from the open. These stocks led the way up and could very well be telling us that we have not completed the correction. The Financial sector was a pillar of strength today as many have seen opportunity as these stocks had pulled back hard and that the chance of Obama plan to put further restraints on them looks like it is dimming. Golman Sachs(GS) and JP Morgan (JPM) were the strongest of the bunch, yet both are still trading below their 50 and 200 day MA. We will continue to trade both sides of the market, however, the order flow still remains to the downside. Therefore, our expectations for follow through are minimal to the upside and will look to book profits sooner on our long positions and will look to build short positions into this rally.

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Morning Quickie$

Keystone Morning Quickie November 10th 2009

Market Commentary

Futures are slightly down this morning after a impressive rally yesterday. As impressive as it may have been, we must take not of the lack of volume that was associated with the run up. The Dow Jones made yearly highs at 10023, however the $SPY failed to make a new high and is sitting below the significant resistance level of $110.

A big reason for the rally was due to the G20 meeting in which the leading nations gave no indication to removing stimulus. The US dolard made 15 month lows as both Crude oil and Gold continued the stellar rally. Many believe that the price of Gold is a bit inflated, but as always we will not try to pick a top, but rather wait to buy pullbacks or wait for signs of a reversal.

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Technical Levels

50 Day 200 Day
S&P 1056 1008
DOW 9765 8647
NASDAQ 2100 1805
Keystone’s Trades

CVS Caremark(CVS) Short sale – After gapping down on earnings last week on an exhaustion volume bar, CVS has rallied back and recovered some of the losses. However, we believe that this is nothing more than an opportunity to position ourselves for a short. We will look to see how it reacts around the 200 EMA ($31.78). If we show signs of weakness early this morning, we will enter the trade on the first rally.

Closing Price:$29.79

Target: $27.49

Stop: $31.76

20 EMA:$34.64

50 EMA: $35.97

200 EMA: $31.78

Apple (AAPL) Long – Apple has been tried remain above the $200 “psychological” level since December “07. It failed back in “07 and after their earning release in late October it once again breached that level, only to sell off and retrace back to $186. Yesterday it once again has risen above the $200 level and we believe that it is there to stay. Technicals strong, fundamentals strong. A must own stock. Buy the pullbacks.

Closing Price: $201.46

Target:$210

Stop:$193.66

20 EMA:$193.46

50 EMA:$186.05

200 EMA:$141.82
Economic Calendar

7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
8:55 Fed’s Lockhart: Emerging Trends in Real Estate
9:00 Conference: Cross-Border Insolvency Issues
10:00 Job Openings and Labor Turnover
10:00 Q3 Metro Home Prices/State Resales
10:05 Fed’s Yellen: The Outlook for the Economy and Real Estate
11:15 Fed’s Rosengren speaks
1:00 PM Results of $25B, 10-Year Note Auction
7:30 PM Fed’s Fisher: Economy

Notable premarket earnings: ARM, BZH, DSX, JASO, TYC
Notable postmarket earnings: AONE, ATO, CLWR, PAAS

Top News Stories

EU casts shadow over Oracle’s Sun. European antitrust authorities formally objected to Oracle’s (ORCL) proposed $7.4B takeover of Sun Microsystems (JAVA), issuing a statement of objections that focuses on whether Oracle ownership of Sun’s MySQL database software would reduce competition. The move doesn’t necessarily mean the EU will reject the deal, but should delay the process. The U.S. Justice Department, which has already signed off on the combo, reiterated that the merger is “unlikely to be anticompetitive.” Oracle, meanwhile, said the acquisition “does not threaten to reduce competition in the slightest,” adding that the EC’s concerns “reveal a profound misunderstanding of both database competition and open source dynamics.”

Lending standards loosen. A smaller percentage of banks tightened lending standards in Q3, according to the Fed’s loan officer survey, but credit conditions remain far from a comfort zone. About 25% of banks tightened standards on good quality real estate loans, down from 75% in July 2008. Banks tightening standards for credit cards fell to 15% from 35% last quarter, the lowest percentage since April 2008. And 15% of banks tightened standards on commercial and industrial loans, down from 80% in October 2008. “We’re back to just normally tight, not pathologically tight,” says an economist.

U.K. most at risk of AAA downgrade. The U.K. is most at risk among large developed economies of losing its AAA rating, Fitch said Tuesday, but the ratings service maintained its stable rating which it said “reflects our expectation that the U.K. government will articulate a stronger fiscal consolidation program next year.” In response, U.K. Trade Minister Mervyn Davies insisted Britain’s sovereign rating is “absolutely” safe, and said the government’s “been very clear that over the next four years there’s going to be a program to reduce the public debt level.” In May, S&P put the U.K.’s AAA credit rating on negative outlook, saying it would make a decision after the government makes its intentions clear.

Moody’s sees AIG comeback. AIG (AIG) will be able to repay its $60B Fed credit line and “much or all” of the Treasury’s $69.8B investment if financial markets stabilize, Moody’s said Monday. In a vote of confidence for CEO Robert Benmosche’s strategy of rebuilding some of the businesses AIG previously targeted for sale, Moody’s said, “We believe that the slower approach to restructuring could help AIG to generate more favorable values from its business portfolio than would be the case under rushed asset sales.”
Employment trends turn corner. In perhaps the most bullish employment report since the onset of the recession, Conference Board reported its Employment Trends Index rose 0.7% to 89.3 in October from 88.7 last month. “The

Employment Trends Index has likely turned a corner in September, and the historical relationship between the index and employment suggests that job losses will end in early 2010,” the group said, adding, “While layoffs have certainly declined in recent months, we still expect to see employers adding hours to their existing workforce before hiring will strongly increase.” The improvement was driven by positive contributions from measures of jobless claims, temporary hires, industrial production, and sales. Conversely, Gluskin Sheff’s David Rosenberg said unemployment may hit a post-war high of 13% as growth stagnates. “This is going to be the mother of all jobless recoveries. At the beginning of the year, who was calling for unemployment to go up to 10%?”

Hedge funds alive and well. Hedge fund assets may top the previous high of $2T by the end of 2010 as double-digit returns lure investors, Deutsche Bank says. “We fully expect to see material inflows into 2010 and beyond. The expected growth is reflective of continuing institutional demand for increased risk-adjusted returns in the face of low bond yields and disappointing passive equity performance.” Global hedge funds have rebounded faster than expected, recovering to $1.53T in September from $1.33T in March, even as regulators turn up the pressure to increase scrutiny of the industry and amid some high-profile scandals.

Barclays accused of huge Lehman heist. In a recent court filing, Lehman’s creditors claim Barclays (BCS) received Lehman securities valued at $50B for just $45B in cash, accusing the U.K. bank of the “largest theft in banking history.” Some Lehman executives who negotiated that deal, the complaint asserts, knew they would receive offers to work at Barclays, and received or were offered plump compensation deals. At the time, the deal was presented in bankruptcy court by Lehman’s lawyers as a wash.

Cadbury bitter at Kraft’s bland offer. Kraft (KFT) took its offer for Cadbury (CBY) directly to shareholders, disappointing investors who had hoped Kraft would sweeten its original bid of 300p and 0.2589 new Kraft shares for each Cadbury share. Kraft said its proposal “offers the best immediate and long-term value for Cadbury’s shareholders and for the company itself compared with any other option currently available, including Cadbury remaining independent.” Cadbury, not surprisingly, recommended shareholders “emphatically” reject Kraft’s (KFT) “derisory” offer, which it says “is worse than the proposal that the Board has previously rejected as fundamentally undervaluing Cadbury and its prospects,” due to a drop in Kraft’s share price. The cash and share offer originally valued Cadbury at £10.2B, but is now worth about £9.8B. Kraft now has 28 days to publish a prospectus on the offer for Cadbury shareholders, and 60 days to collect enough shares to clinch a deal.

Google picks up mobile ad leader for $750M. In a push to expand its digital advertising empire to cellphones, Google (GOOG) agreed to acquire mobile advertising start-up AdMob for $750M in stock. AdMob is a leading seller of banner ads on iPhone apps and mobile-specific web pages; the acquisition could help establish Google as an early leader in the small but rapidly expanding mobile phone advertising business. Aggregate sales of mobile ads were just $160M last year.

Madoff payback fund could swell. Settlement talks between Madoff trustee Irving Picard and lawyers for the estate of Madoff investor Jeffry Picower are making progress, with Picower’s family lawyer saying discussions range between $2.4B (the amount Picower withdrew over the six-year recovery period allowed for the trustee’s claims under New York State law) and $7B (the total amount of his withdrawals over several decades). The estate is large enough to add at least several billion dollars to the $1.4B the trustee has gathered so far.

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how to be a patient trader

Michael Jordan was very famous for “letting the game come to him.” He didn’t take a shot every time he touched the ball, he was patient to get a feel for the flow of the game.

If you ever hope to become a consistent trader it is imperative for you to be disciplined. Discipline is the secret key. The ability to follow your plan to the letter (assuming you have a plan!).

There are so many aspects to trading that discipline applies to but I would like to touch on one in particualr that is easy to fix and can help you with your very next trade.

Stop trading both sides of a stock!

Our job is to find an institutional order and climb on board for the ride. Institutions do not flip flop the side of a stock they are accumulating or dumping. Neither should you if your goal is consistency.

Find a stock that is a long only or short sale only and be patient to wait for a set up to get invloved in that direction only.

If you should happen to get stoppped out, stick with the stock and get ready to enter again.

Long or short only, easy to remember and a great visual tool.

Good day traders ALWAYS talk to themselves

When you see someone talking to themselves it may look a little scary, when you see a trader doing it at his desk what you see is someone who is ready to earn money. Sometimes questions are the answers. In order to be prepared you must know what you are going to do no matter what happens.

 

I am very big on quotes/metaphors and such to give me visual images when I need to take action toward any goal, not just tradingTrade scenarios are built upon deciding what is probably going to happen next but consistent profits come from know what you are going to do definitely going to do next.

 

This will probably happen, this is what I will definitely do

 

One of the most common emails I get is “My timing is off.” Timing comes from anticipating not from reacting. You can only anticipate if you spend most of your time building if then scenarios.

 

Most new traders spend a good deal of their screen time looking for a spot to enter, looking for the next trade. In reality you should spend most of your time looking for institutional order flow, identifying an edge. If there is no obvious edge why would you look for an entry price?

 

Some questions you should be running through your head all day long:

 

• Is there an obvious edge to the market?
• Are the market internals telling a story?
• Is there obvious insitutional order flow in my list of stocks?
• If I have no edge what do I need to see for me to want to get involved? What levels would make me sit up in my seat?
• What price makes the most sense based on risk reward?
• What do I want to see on the tape AFTER I get filled?
• What don’t I want to see after I get filled? What is my plan if it moves in my favor/against me?
• Where will I add to the position? Where will I scale out?
• Is today a trend day or range bound? Am I trading the type of day unfolsing or am I trading what I want to see happen?

 

This is just a small list, but it gives you some ideas.

 

Talk to yourself and wait for the answer. Actually listen to the answer.

 

If you are simply reacting to every wiggle and jiggle in price action you will never find consistency.