Steve Jobs Speaks, Market Listens

Apple’s (AAPL, $93.11, up $2.36) CEO Steve Jobs spoke about his health this morning and the stock has rebounded sharply. The stock was lower in pre-market trading but turned positive when he responded to the market’s worries about his health. Unfortunately, stocks do trade on the health of a company’s CEO because people wonder if they will still be able to do the job. Mr. Jobs put many of the rumors to rest even the “stories of me on my deathbed” when he said he was fine and that he would continue to run the company while he takes treatment for a “hormone imbalance.” The market took the message as a relief and Apple has opened higher this morning. The news comes a day before the annual Macworld show opens in San Francisco. Apple’s stock had been drifting lower since last month’s announcement that Jobs wouldn’t be attending the event. The stock fell from $100 to the mid $80’s where it found support. Today’s news was crucial in the stock’s next direction because the company has a lot riding on Jobs and the Macworld show. Apple’s marketing chief Phil Schiller, not Jobs, will deliver the keynote address but that has been known for quite some time. There is talk of an iPhone “mini” but Apple needs to announce a price cut for its laptops to keep the momentum in its stock price going. Look for a continued rally throughout the day but I wouldn’t be surprised to see the air come out of the balloon if Wall Street doesn’t like the news out of Macworld. The January 95 calls (QAAAS, $3.10, up $0.90) have opened strong and could make a run to $4 or $5. I would make this a one or two day trade only and if the stock starts to fade by the end of the day, make it a one day trade. Rick Rouse Rick@OptionsMentoring.com]]>

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