Options In Focus: Apple Bear Vertical Follow Up and U.S. Stocks Rise Despite Mixed Economic Reports

In truth, I like nothing more than to say things were different. Unfortunately, that would be in direct denial of the reality facing a recently described and now less- sweet looking bear vertical in Apple. In Friday first hour, shares of AAPL demonstrated enough early leadership to afford a bit of follow through on Thursdays mischievous action as to force a bearish pattern breaker. Today price break above recent highs of 204.31 was discussed on Tuesday as being the basis for the right shoulder within a detailed head and shoulders pattern. It goes without saying, although it was at the time, a breach of those levels would constitute a breaking of the formation.

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While such action would be to the chagrin of any would-be bears, money management based on the nefarious price breach could substantially reduce those traders known maximum risk on the position, barring an even harder and counterproductive price gap. [Read the full article]

The second estimate of the fourth-quarter 2009 GDP came in higher than previously thought and was above views. But the spending component was weaker than expected.

The Chicago PMI unexpectedly rose. But sentiment and housing data came in below economists’ estimates.

Stocks dipped on the week, but finished the month on the plus side. The Nasdaq jumped 4.2%, S&P 500 2.8%, Dow 2.6% and NYSE composite 2.2%.

Deckers Outdoors (DECK) gapped up and bolted 13% to a 17-month high. It cleared a 113.20 buy point from a cup base. Late Thursday, the footwear maker beat views with a 29% rise in Q4 earnings and a 15% gain in sales.

Warner Chilcott (WCRX) rose 4% in heavy trading. It finished just pennies below its 50-day moving average. The drugmaker reports Q4 earnings Monday morning. Analysts see profit jumping 50% to 60 cents a share. Revenue is expected to surge 143% to $588.1 million. [Read the full article]

Friday’s price gains capped a week of strong performance for Treasuries as a string of weaker-than-expected economic data, including a surprise jump in new jobless claims and plunging consumer confidence, had investors scrambling for the safety of lower-risk government debt.

“We are getting a little more concerned about growth in 2010; some of the data are suggesting that after the big inventory pop in the fourth quarter (of 2009) that things are not looking too hot for the recovery,” said Kim Rupert, managing director of global fixed-income analysis at Action Economics.

The benchmark 10-year note’s yield eased to 3.61%, its lowest in more than two weeks, from 3.64% late Thursday.

The market got a batch of economic reports Friday, including February consumer sentiment, fourth-quarter gross domestic product, February business activity in the Midwest and January home sales. [Read the full article]

Utilities have been laggards so far in 2010. As of Friday’s IBD, the Dow Jones Utility index was down 7% for the year. That made it the worst performer among the 23 indexes IBD publishes daily on the “How’s the Market?” page.

Problems for utilities have included: cap-and-trade legislative efforts that could hurt coal-related utilities; a lack of clarity on dividend tax changes; and a sluggish economy.

Some of these troubles are fading. Cap-and-trade appears comatose, if not dead. The economy is slowly recovering.

One other plus, at least for some utilities, is President Obama’s recent boost to nuclear energy.

Southern Co. [Read the full article]

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