I was greeted by a picture of a young lady's smiling face this morning as I opened the front page of today's Investor's Business Daily. She was "showing off her new iPhone 4 outside the Apple Store in Orlando, Florida." Yes, you could tell she was a very happy person. She would be even happier if she had also purchased some of Apple's stock.

"Apple's newest smart phone was selling briskly Thursday as thousands of people lined up outside stores around the world to become among the first to own the device. Some stores sold out completely within hours," said IBD. Demand is expected to outstrip supply for months to come. Apple and its partners took more than 600,000 pre-orders on June 15, the first day people could reserve the iPhone 4. Some analysts say Apple could sell 1.5 million units in the first two days. Apple plans to ramp up production from 1.5 million iPhones a month to 4 million in July; then to a quarterly run rate of 15 million by December. Even with this homerun, iPads and iMacs continue to fly off the shelves.

All of this has not gone unnoticed. A Reuters story this morning reported that Oppenheimer estimated first-day iPhone 4 sales at 1.5 million units. Moreover, Oppenheimer also raised its fiscal 2010 earnings estimate for Apple to $14.52 per share and fiscal 2011 estimate to $17.96 per share. Our current 12-month forecasted earnings estimate, EPS, is $14.77 per share. This means that we expect Apple to be earning $14.77 per share 12 months from now. So it appears that Oppenheimer may be a bit too optimistic.

But let's take a look at a two-year Standard Graph of Apple. Adjust the graph to show EPS in the lower portion in place of RT. Note that 18 months ago, 12/24/08 to be exact, EPS hit a low point of $5.11 per share and it has going up ever since, slowly at first; then by leaps and bounds. So who knows how high Apple can fly? Oppenheimer raised its price target to $345 per share and 42 of 46 analysts who follow the stock have either a "strong buy" or "buy" rating on it. So what's keeping you from taking a bite of the Apple?

Professor Navvaro of the University of California said on CNBC last week that he likes Apple, but can't afford to buy the stock...its price is too high. Whoa, we solved that problem a long time ago. In fact, we wrote about how you can control substantial shares of Apple stock with very little capital outlay on April 23, 2010. If you read that essay and didn't understand it, never fear, Jerry's here.

Mr. D'Ambrosio, one of our best instructors, will illustrate how to set up a trade which could produce the largest returns you've ever had. So visit the VectorVest University to see Jerry's great "Strategy of the Week" presentation: "Apple Mania."

BP gapped higher at the open this morning and the MACD histogram on my Intraday graph in VectorVest 7 RealTime turned positive at about $32.40 per share. Is now the time to buy?

Some investors think so. The stock hit an intraday low of $29.00 per share on June 9th and it has been consolidating ever since. A big-time investor, who invests in distressed companies, appeared on CNBC's Fast Money show last week, saying that BP has incredible financial strength, it will survive and he's buying the stock in large chunks. I believe his comments had a lot to do with stifling BP's downward movement. Moreover, Ms. Maria Bartiromo also said last week that Dubai was rumored to be buying the stock.

On the other hand, numerous money managers and other assorted guests have appeared on CNBC, saying they are not buyers...it's too dangerous, its problems aren't going away soon and it may go bankrupt. So when would be a good time to buy this stock?

The time to buy this stock is after it has stopped going down in Price. When, pray tell, would that be? It has stopped going down when it starts going up, and that's not a joke. For example, the positive MACD histogram indicates that BP's Price has started to go up. But it's a very preliminary signal that only Aggressive Investors or Traders would use. I've been Short BP since mid-May and I covered my position this morning, but I'm not buying just yet.

As for Prudent Investors, they should consider buying this stock only on a much stronger, more reliable indication that it has stopped going down and has started to go up, i.e., when it passes, "The Acid Test." I wrote an essay about "The Acid Test" on December 8, 2000 and it is well worth reading.

To see how well "The Acid Test" works, let's take a look at Yahoo!, for example. Please access an All-Weekly Graph of YHOO. Delete Stop Price and RT, change MA3 to a 30-week period and add MA1 to show a 10-week moving average. Now remove Price so that you can clearly see the 10-week and 30-week MAs. Note that the 10-week MA crossed down through the 30-week MA on 05/12/00 at $62.84 per share and stayed below the 30-week MA until 12/21/01 when YHOO was at $8.46 per share. It had an "H" Rec and the rally failed. VectorVest finally gave YHOO a "B" Rec on 10/11/02 even though the 10-week MA was below the 30-week MA. This up move lasted until 03/04/05, when YHOO was $32.36 per share. A similar analysis on BP indicates that downturn has just begun and it could be a while before "The Acid Test" signals When to Buy BP.

P.S. While you wait for BP to get a "B" signal, you should consider buying Clean Harbors, CLH, who should make a fortune from the disaster.

THE PAYDAY PORTFOLIO REPORT.
I gave my presentation on the PayDay Portfolio last Saturday and it was very well received. It was videotaped and is now being edited. We hope to have the report, including PowerPoint slides and CD, ready for delivery shortly. As of last Friday, June 11, 2010, the $100,000 paper portfolio which was started on January 8, 2010 has received $16,159.00 in deposits from Dividends and Option Premiums.

SWING TRADING WITH KILLER BREAKOUTS.
Three weeks ago, Jerry D'Ambrosio gave a dazzling presentation on Killer Crossovers. Not to be outdone, Mr. Todd Shaffer, Manager of Research, has been working feverishly on an equally dazzling set of searches. So join Mr. Shaffer at the VectorVest University to see his equally dazzling "Strategy of the Week" presentation, "Swing Trading with Killer Breakouts."

This market is starting to remind me of late 2008, early 2009. The VIX is high and our Market Timing Indicators are low. But we're not near the sorry state that existed back then by a long shot. For example, the VIX hit an incredible high of $80.86 on November 20, 2008 and it hit a high of "only" $45.79 on May 20, 2010 when the Mighty Dow dropped 376 points.

But we know from long experience that when the Buy/Sell Ratio, BSR, goes below 0.20, the market is drastically oversold and it's time to be looking for an explosive rebound in stock prices. Indeed, the BSR closed at 0.12 on May 20th and the market rebounded to the extent that the Color Guard signaled a green light in the Price column on June 3rd. Admittedly, this rebound was only a teeny bounce compared to the 30-day rally which followed the November 20, 2008 selloff, but it has significance in that it failed to develop into a sustainable upturn as did the November 2008 rally. In both cases, the market moved to lower lows. In 2009, the final low occurred on March 9, 2009 and in the current instance, the Price of the VectorVest Composite hit an intraday low of $22.69 per share on Tuesday, June 8th. Will this be the ultimate low for this downturn?

It could be, but don't bet the farm. The good news is that the June 8th intraday low of $22.69 was two cents higher than the previous intraday low of $22.67 hit on May 25th. The bad news is that the BSR closed at 0.13 on May 25th and 0.11 on June 8th. I would have liked to seen it close above 0.13, but there's still more good news. The market has hit higher intraday highs and higher intraday lows each day since Tuesday, June 8th.

The best news is that the Futures took a real shot this morning due to a poor Retail Sales report, but recovered quickly on a better-than-expected Consumer Sentiment report. This shows that bargain hunters are alive and well. But they aren't as greedy as they should be. Upside volume has been weak and leads me to label the June 8th low as a Tentative Bottom.

TAMING THE TIGER WITH BEAR CALL CREDIT SPREADS.
Due to the extreme volatility we were experiencing in late 2008, we made a series of presentations with the theme of "Taming the Tiger," i.e., coping with volatility. The way to do this, we said, was to execute low-risk trades by hedging your bets. On 12/05/08, for example, we illustrated how to protect yourself by hedging your short stock positions by buying out-of-the-money Call Options. We then followed up with more presentations incorporating this theme. Now is the time to re-visit this low risk approach to making money. To see how it's done, visit the VectorVest University to see Mr. Glenn Tompkins, who, incidentally gave our first Taming the Tiger presentation, give this week's outstanding "Strategy of the Week" presentation, "Taming the Tiger with Bear Call Credit Spreads."

On October 2, 2009, I wrote an essay called "Double Juicy." It was part of the "Retirement" series of essays in which I described how I would go about generating $50,000 of income per year from $500,000 in financial assets. This essay described a strategy which finds optionable stocks paying dividends of at least $2.00 a year and yield at least 4%. It was called, "Optionable 2x4s." That evening, Mr. Glenn Tompkins, Manager of Educational Services, illustrated how the "Optionable 2x4s" Strategy could be used with the Option Rate of Return Tool to capture both the juicy dividend payments and the juicier option premiums.

Even though Mr. Tompkins made the implementation of this strategy look easy, I was concerned that the requirement of selling Covered Call Options to generate income was adding too much complexity for most of our subscribers. So I wrote another essay the following week called, "Managing Your Retirement Stocks." It also became clear to me that selling Covered Calls must be a vital and necessary part of any retirement strategy. I consider the gains that one makes in Capital Appreciation as cushion, but dividend payments alone cannot provide sufficient income to meet our goal of a 10% annual return. Therefore, I thought long and hard on defining a simple, no guess-work, mechanical technique of consistently generating substantial income from the "Double Juicy" concept. I believe I finally designed a rules-based system that will work.

This system is based upon the idea of receiving a nice cash payment at least once a week. When I was a kid I used to get paid in cash at the end of each week, and I found that no matter how rotten the week was, the cash payment always made me feel better. I have never gotten the same feeling from receiving a check in the mail and having my pay deposited directly into a checking account is for the birds. Nevertheless, we live in an electronic world and I still like money. So I decided to take my electronic payments on Fridays.

From the studies that we have done so far, it appears that a $100,000 portfolio will deliver $20,000 to $30,000 per year in dividend and option premium payments with this system. These numbers do not include gains or losses in stock prices. As you can imagine, however, the money received in payments can mitigate any damage done to your capital position. Another thing I like about this system is that it doesn't require a lot of attention. You only have to look at your portfolio once a week.

We are planning on introducing this system as a Special Bonus to attendees at our One-Day Options Course in Los Angeles on June 12, 2010. So why are we not presenting it as a "Strategy of the Week" presentation? Because this material would normally be part of our Options Course and I want you to learn how to trade Options. If you have already taken our Options Course, we will ship a report to you after June 15, 2010 for only $29.00. Simply, call 1-888-658-7638, and ask for the report on The Payday Portfolio.

A SLICK PROPOSITION.
As a layman, I marvel at the technology used in deep sea oil drilling. As a former Chemical Engineer who designed and built plants, I'm repelled at the sloppy, reckless work that led to the BP Oil release taking place in the Gulf of Mexico. As an investor, betting against BP early on was an easy way to make money. But there were times when it looked like they might actually "plug the damn hole." If successful, it would have given BP's stock price a boost. If not successful, BP's stock price would continue to slide down the slippery slick. There's a trade for every situation and Mr. Dan Misch, another one of our best Instructors, will demonstrate how one could have made money when the outlook was dire and when it was hopeful, but not certain. Please join Dan at the VectorVest University to see this week's intriguing "Strategy of the Week" presentation, "A Slick Proposition."