I like earnings season not only for the volatility that comes from the day a company reports. I also like it for the information that I am able to gain from trading and watching the price action of a particular stock.  This information gives me an edge the next day, which gives me a higher probability that my next trade will work in my favor.

AAPL reported last night.  Here is what I am looking for.  We saw AAPL trade between 126 and 124 all day.  When the SPYs traded below 84, AAPL still held above 124 and only broke below briefly. Once the market found its footing, AAPL quickly traded up to 125 and then to 126 where it was met with massive resistence.  What I would like to see tomorrow to open a long position in APPL, is for the market to continue to move higher and the SPYs to stay above 85. If AAPL can break through 126.25 on higher than usual volume, I will be long AAPL.

But you need to keep in mind that this stock is up about 60% from the low it put in on January 20, 2009 at 78.20.  It is also a market stock.  So, on the flip side, AAPL is a great American company, and I own verything Apple: The iPhone, iPod, Macbook, iMac, iTV, and even my 2 year old daughter has a iPod, but if the market starts to roll over and the SPYs go through 84, I will look to short AAPL below 124.  If the SPYs go through 82.60, I will look to add to my short position through 122.  AAPL does have the possiblity to retrace back to 110, but I will let the market and the stock tell me if that is where it is heading.

Good Luck

Jtoma

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