It’s an endless source of angst, hope, fear, optimism and fodder for my readers — Apple’s  AAPL -0.77% current trading and investment set up. For me, personally, it’s still our biggest position and there’s a whole lot of cross currents around this company and stock right now. First, the good: *Apple’s still one of the [...]

Here’s what I was reading and thinking about this morning when I wasn’t shooting hoops outside in the brisk mountain air. The Biggest, Baddest Bubble of Them All – David Merkel writes: “The biggest bubble, waiting to pop, is that of [I don't want to give away the plot, so click through and read through [...]

This question was just posed in the Daily Chat area on TradingWithCody.com, and I’ve been getting variations of this question all week. Everyone I know and here as well seems to be bullish .. even me. A thought comes to mind if we need to hedge portfolio. I would love to hear what you folks [...]

The phrase “jump the shark” comes from a scene in the fifth season premiere episode of the American TV series Happy Days that aired on September 20, 1977. In the episode, the central characters visit Los Angeles, where a water-skiing Fonzie (Henry Winkler), wearing swim trunks and his trademark leather jacket, jumps over a confined shark, answering a [...]

Here’s what I was reading and thinking about when I wasn’t cutting wood this morning. CBO Solution to Budget Crisis – Everyone Bend Over! – Bruce’s title says it all. His words, not mine. I might call it “The next Black Swan”. That said, you have to read his column, because his conclusion absolutely blew [...]

Cross-posted from TradingWithCody.com, where I post all my trades in real-time (a service not affiliated with Marketwatch). With the Nasdaq now at 11-year highs, highs it hasn’t seen since the good ol’ dot com bubble days of late 2000, it’s time to revisit the question that everybody’s asking once again, “Are we in a new [...]

A few weeks ago, when the stock was trading at about $18 a share, I wrote a column called, “Seagate: A wildly cheap stock with a chart that’s on fire. First off, I want to thank Robert Marcin, whom you’ve seen me call “The best value investor I know” for tipping me off to the [...]

Good morning and welcome back to the office. It started out as a slightly higher market and it’s faded into a slightly lower market. I’d like to see a 2-3% pullback to start scaling more aggressively into a net-longer stance than I have right now, and this kind of action can lead us there. Let the pitches come and don’t be in a rush if and when the markets start to crack.

Speaking of pitches, here’s another very high-risk earnings trade: Amazon calls. (Click here to read about how I was wrong about SanDisk’s report last week, but being wrong comes with the territory.) I’m buying some April calls with strike prices above $200 per share.

To review, buying calls means that I’m betting that the stock is going higher because for every call I purchase, it gives me the right to buy 100 shares of the underlying stock for the predetermined strike price. If Amazon is right now at $190 and I pay $5 for one call, that gives me the right to buy 100 shares of Amazon at $205 per share on the third Friday of April. (Options always expire on the third Friday of each month.)

Then if the stock goes up to, say, $210 tomorrow, that call option will be worth probably about $10 to $12 each because they went from being “out of the money” to “in the money” after the stock passed $205. And if the stock goes down tomorrow to, say $170, then those call options will likely be worth about $2 or less because they are so far from being “in the money” since the stock would have to rally from $170 to more than $205 before the third Friday in April for those calls to be worth money before they expire.

The reasoning behind buying AMZN calls today (counterpoints to each reason is in italics and parenthesis):

• The stock is still down from $246 where it was last year, and has been hard hit since last quarter. (Of course, it’s also up in nearly a straight line from $160 in the last few weeks.)
• Few tech traders I know are willing to buy AMZN ahead of earnings this time because of the big hit they took after last quarter’s report. (But they’re also definitely “bullish” on the stock, even though they won’t put their money where their mouth is.)
• The Kindle Fire likely outperformed expectations as much as the iPad did for Apple last quarter. The question is, will the big bump to the revenues that come from selling so many Kindle Fires make analysts and investors happy? (Or will the hit to the gross margins that will come from selling Kindle Fires make analysts and investors wince?)
• Earnings estimates from the sell-siders for Amazon this quarter are as disparate and wide-ranging as I’ve ever seen. Some guys expect a loss of more than a quarter per share, while others are looking for nearly 90 cents per share in earnings. The “whisper” number (the number that most of the bulls are expecting to see as we head into the report tonight) is for earnings per share of 20 cents (1 cent ahead of “consensus estimates”). That sure could lead to a big jump if the company delivers on the bottom line despite the big Kindle Fire numbers I’m looking for. (Then again, that would also likely lead to a sharp selloff if the company’s top and bottom lines both come in light.)

Here’s the stocks part of the transcript from today’s chat from TradingWithCody.com (click here to see my latest positions) an independent service not affiliated with Marketwatch.

Q. Feet to the fire Cody…GMCR tonight, calls or puts? I’m bullish on GMCR due to lot’s of keurigs sold over Christmas season. A. GMCR has been flagged by David Einhorn, one of the greatest shortsellers/fraud-finders extant, as having questionable accounting. That leads me to believe that eventually that stock is going MUCH lower than today’s $55 quote. That said, I have no idea about whether any of that will matter tonight, and in fact, if the company reports “good numbers” tonight (whether those numbers in coming years have to be restated is another matter), that could very well force a squeeze among the many shorts who have blindly followed David’s short thesis. Feet to fire, I’d guess higher tomorrow, but as a bear on the stock overall, I wouldn’t trade it to the long side without a better edge on tonight’s earnings than just “a lot of kuerigs sold over the holidays”. And to be clear, I’m not in any way mocking you in repeating that logic back to you…I used a variation of that same logic with the “lots of Kindle Fires were sold over the holidays” earlier this week too.

Q. Longish dated GOOG calls here? A. Yes, I like longish-dated GOOG calls here with the stock near $575. It’s headed to $2000 by 2020, IMHO.

Q. Hi Cody! I had just missed you last week. I was asking your thoughts on EA before earnings tonight. Analysts are split in their expectations but EA has been tight-lipped on SW:TOR performance since that first weekend after release. It has been beat down more than the other game makers. A. The contrarian in me likes the horrid EA chart and the fact that it indeed has been beaten down much worse than the other video game makers. I’ve been buying Ataris, Nintendos, Intellivisions, Segas, and Playstations on eBay lately, but I actually haven’t connected any of those or my old Xbox 360 since I moved into my new house and I haven’t played hardly any home video games in a couple years now…meaning I have no edge in what video games are hot and what’s not. Good luck tonight!

Q. Hi Cody, do you think LPS will be able to get the lawsuit dismissed? A. It’s not just one lawsuit that’s going to take down LPS, it’s the fact that their entire business model is based upon a software that enables MERS title chain of transfers which are inherently illegal and immoral and flawed and there’s no escaping that their business will be destroyed one way or another as MERS is abandoned. LPS is also a convenient scapegoat for the entire mortgage servicing industry.

Q. If the market starts a pullback in the next week, does NFLX feel it big-time? Thinking about some short terms puts with a 120 strike. A. I still don’t think trying to game NFLX is a good idea for my capital. The chart says it’s going higher, but it’s also straight up doubled from its recent lows. Still down 60% from its recent highs. And this is a multibillion-dollar company. I don’t know if it will tank with the markets or if will trade on its own fundamentals and I don’t know whether the markets already overpriced the recent turnaround or if the recent turnaround is sticking.

Q. Hi Cody, do you think is a good idea to play QCOM earnings report? A. QCOM’s hitting on all cylinders and the quarter should be great, a la BRCM last night. That said, I’m not sure what’s priced in with QCOM here. I’ve cited it many times as a great long-term investment, but trading earnings means you have to be right about the “better/worse than” from the report and the markets’ reaction to that “better/worse than” from the report. You’ve seen miss a couple of those types of trades in the last week or so. Feet to fire: I’d bet higher on QCOM tomorrow, but I am not tempted to play it with my own money at all.

Q. Would it be a good idea to add to SNDK calls here? A. Yes, I do think adding to Sandisk in the mid $40s will probably work out very well in the next year.

Q. Cody, I know you remain bullish on STX, but any thoughts on taking some profits on the March calls? A. The company really might be paying out a $2/share annual dividend by the end of 2012, and if that’s the case, this stock will be north of $40. Even without that, I think the stock is just too cheap for me to sell given all the plates lined up for it this year and into next.

Q. Hi Cody, any new thoughts on VIX? In the past, you thought it might benefit from upward or downward volatility but do you still hold to that? A. I feel like a total idiot on this VIX trade. The markets haven’t been volatile at all since we put it on and the calls have lost a lot of value. I’ve not forced any further trades or averaged down or anything so the loss is minimal, as you guys, but that doesn’t mean I don’t feel like an idiot about the trade. I don’t know if and when I’ll add to these VIX calls, but I don’t plan on selling them anytime soon either. Not enough value left in them to sell now vs. the fact that they do give me a good hedge in case the markets do get crazy volatile. Mea culpa on this so far, though. - Cody, it’s nice to hear an analyst who will admit to the losses as much as the wins (of which you have had many) and it keeps me faithful, so thanks!

Q. Independently I wanted to make a trade on VIX, because looking into the past (at the time of purchase), we couldn’t get Aug, Oct and Nov out of our heads, it was hard to see that the landscape had changed. I’m not sure what that means about the future, but the markets are certainly very different than the exciting days last fall. A. True words you speak there. And I’ll bet we’ll be able to say the same thing in six months about how different the markets are then than they are right now. (I might have just messed up the tenses in there, but you get my point…markets do change and these markets will change too. When and in what direction are the questions, of course!)

You can meet next week at 2pm EST at http://tradingwithcody.com/chat where you can ask me anything.

Cody Willard writes Revolution Investing for MarketWatch and posts the trades from his personal account at TradingWithCody.com. At time of publication, Cody was net long Google, Seagate, VIX, Sandisk and net short LPS.

Here’s what I was reading and thinking about today when I wasn’t preparing for another week of a earnings blitzkrieg.

Politics/banking (is there a difference anymore?):

Indicator Update:  An Avalanche of Data

Obama Bluffs on ReFi? – Why do welfare programs for homeowners get a free pass? How are homeowner welfare programs a “liberal” cause anyway? How about help for renters, as I’ve asked for years and years? Every bit of goverment assistance for the real estate industry comes out of the pocket of people who don’t own real estate. Just sayin’.

Financial Systems and Italian Cruise Ship Captains

So Why Hasn’t SEC Enforcement Chief Robert Khuzami Resigned? SEC Only Now Investigating CDOs Created on His Watch at Deutsche Bank

Democratic Senators to Push ‘Buffet Rule’ – NYTimes.com - Yeah, that’s all we need, more taxes for the Republicans and Democrats to spend. Forty years ago, corporations accounted for nearly 40% of Federal Tax Revenues. Today they account for 6%.  Republicans need to stop pretending that they are fighting for “lower taxes” and START FIGHTING AGAINST ALL FORMS OF regulation capture, bailouts, and corporate welfare. Democrats need to stop pretending that they are for “even playing field” and START FIGHTING AGAINST ALL FORMS OF regulation capture, bailouts, and corporate welfare.  Bailouts alone added $6 trillion to our national debt in the last four years and now we have to deal with Warren Buffett’s “millionaire tax” strawman. Taxes are a small part of how the government redistributes wealth.

Gingrich’s January Haul Is $5 Million – Who sends these Republican/Democrat millionaires money? You don’t have a better place to help with your donations? People who send politicians “donations” truly make me sick. Bad enough that you people vote for Republicans and Democrats but to take your hard-earned money and just send it to them so they can propagandize more? You Republicans and Democrats truly make me sick.