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Two Ways To Play: Apple's Juicy Apps


Strengthen your portfolio in good times and bad.

U.S. to Muddle Through?

The Wall Street Journal reports the U.S. economy is poised for an ugly finish for the back half of 2008 as consumers continue to deal with stagnant wages, falling home prices, tighter credit, and layoffs. Faced with these conditions, economists have downgraded forecasts in recent weeks to a weaker second half as opposed to what most thought would be a period with signs of economic recovery.

Further, one Goldman Sachs economists said "We are on the cusp of a renewed deceleration in growth" with growing risk of foreign demand weakness washing back onto U.S. shores. For trading context, read Todd's Random Thoughts: Rotation of the Rally.

From the Bull Pen: Will companies like Campbell (CPB) continue to benefit in the back half? Near-term sell-stops can be set below $36.

From the Bear Cave: Bears might see a downside play in General Electric (GE) and can fade (read:sell) the rally into the $31-$32 range. Buy-stops can be set above.

Apple Chief Says App Sales Surge

According to the Wall Street Journal, Apple (AAPL) CEO Steve Jobs said that users of the online software clearinghouse, the App Store, have downloaded over 60 million programs since it started a month ago. While many of the programs were free, Jobs said that the company sold an average of $1 million a day for a total of about $30 million in sales last month. If the trend continues, the company could get $360 million in new revenue a year. But Jobs said it isn't doing much to stand in the way of direct profit in the business. The company is keeping 30% of the proceeds (enough to cover expenses) while 70% goes to the developers. His bet on these applications for the iPhone is seen as the same bet where iTunes made iPods more desirable.

From the Bull Pen: In the short term, is Apple poised for a breakout to the $180-185 level? Bulls can take that trade with sell-stops set below $165.

From the Bear Cave: For a downside tech play, bears are watching the "slow crawl" back to resistance in Texas Instruments (TXN). Entry at $28 if and when the stock reaches that level.

For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.

Quick Check Around the World

Asian trading closed with the Hang Seng -0.12%, Nikkei +1.99%, Sensex +2.22%, Taiwan +1.62% and Shanghai -5.21%.

Over in Europe, traders find the CAC +0.53%, DAX +0.38%, FTSE +0.68%

As of 8:10 AM EST, S&P Futures are up +3.20 points to 1295, and Nasdaq futures are up +5 points to 1929.

A Look At Commodities

Commodities are mixed. Crude oil is up +1.06 to 116.26. Gold is higher +2.80 to 860.60. Silver is lower -0.050 to 15.280, and copper is off -4.05 to 336.00.

The dollar index is down -0.033 to 75.818.

No economic events on the radar today.

Good luck and have a happy Monday!
No positions in stocks mentioned.

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