Buy the Rumor and the News

 | Sep 12, 2012 | 2:04 PM EDT  | Comments
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Stock quotes in this article:

aapl

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FB

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elli

In spite the intent focus on the new iPhone, the trading in Apple (AAPL) has been relatively sedate. But it is picking up now.

The bears are anxious to sell the news and the bulls are working on squeezing them.  The best approach to many trades, lately, has been to buy the rumor and buy the news. No one seems to be in much of a rush to take profits anymore. They just keep on buying because who wants to fight the Fed?

Facebook (FB) continues to run and once again there are very strong bids under this market. Given how the market acted on the ECB news, which was well anticipated, the bulls are betting on an euphoric response should the Fed roll out QE3 as expected.

I'm looking for more long exposure, but this market has not been producing many great setups and I've been a net seller simply as a matter of discipline. I continue to like Ellie Mae (ELLI), which I mentioned recently. They are involved in electronic mortgage origination technology, which should be a good play on the better sentiment in home builders as well as possible Fed action involving mortgage backed securities.

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