I received my Kindle Fire last week and was feeling delightful playing with the gadget.  When iPad came out, I thought about buying one for myself but I just couldn’t justify spending $499 for a gadget I knew I would not use much since I like to do most of the work on my trusty PC.  However, I’m aware of the “mobility” factor for millions of users out there.

Here is why I think the Kindle Fire “may” impact Apple’s iPad sales growth.

1)      Parent with 2+ kids may not want to buy each kid an iPad for X’mas.  For the price of one iPad, parent can buy 2 Kindle Fire (Yeah! one for each kid!)

Each kid can now watch their own movies, play with their favorite apps, etc while traveling with parent (either in car or airplane).

2)      With a much smaller form factor than iPad, taking the Kindle Fire with us wherever we go is a no-brainer.  In other words, Amazon has taken the tablet PC to the next level in mobility!

3)      Amazon has an amazing name brand that associates with reading, video, and music.  Thus, people will more likely buy the Kindle Fire over other non-Apple brand tablets out there.

Will it replace iPad2?  I don’t think so.  iPad2 definitely has its advantage giving its size and features; but the Kindle Fire has the “potential” to take away prospective customers who were thinking of buying an iPad but now prefer the Kindle Fire giving the 3 points I mentioned above.

In summary, by January Apple earning report, we will know if the Kindle Fire impact iPad sales.  And if it does, the price action of Apple won’t be a pretty sight.

Disclosure:   I bought Apple Jan 2012 380 put option since price action last Thursday broke thru AAPL Nov 14^th pivotal low. I also have my mental protective stop near the top of Nov 14^th pivotal low as well in case I’m wrong.

What’s an interesting Sunday reading.  We’ve two opposing views on AAPL that is typical of any stock exchange..  And I’m not about to regurgitate more of what is already out there except to paste another take below:

http://www.fool.com/investing/general/2011/11/13/the-next-battle-over-apple.aspx

10banger post’s title “Apple is under attack” is accurate for AAPL’s price action for the last two trading days although the content of his post support a bearish long-term outlook.  Ben3, on the other hand, continues to support the positive AAPL long term “growth rate”.  In order for AAPL to reach $500, it must have sustainable growth rate in spite of competition.  Don’t forget Kindle Fire which Amazon recently increased its production run by an additional 1 million units.

In my opinion, the best indicator as to future direction of AAPL is not what we believe will happen; but what the price action is telling us.  While the bull and the bear have their own fundamental beliefs in supporting their view points, their beliefs must be attuned to the price action of the stock in question.  Otherwise, by insisting on being right when the price-action is telling you otherwise, I’m afraid you won’t find Mr. Right when you give back all your AAPL profit or ended up in red.

Btw, giving all the AAPL rumors and fierce competition out there, my opinion is that the AAPL next earning announcement will become the pivotal point for future long-term direction.  In other words, I will label that earning date at a gambling bet and will avoid putting any position by then.

Market opened higher!  No follow-thru from yesterday big down day.  Stocks I sold yesterday were much lower now even with Dow Jones up 100+.  Time to test the water and do some bargain shopping!

Yes, some of these there… yeah, that’s one too.  Wow, that’s one still on sales!  (Btw, I’m only picking those that hit the bottom of the Bollinger band).  While sitting back to enjoy my new purchases, I realized that the plate I used to hold these purchase was getting warmer… before I knew it, it was hot!  Ouch!

What do you do when you touch a hot plate!  You snapped your hand away so fast you could punch yourself in your face if you didn’t get your head out-of-the-way.  I sold all my new purchases without even thinking about it.  Do you think about moving your hand when it is being cooked on the hot plate?  Unfortunately, I didn’t get my head out of the way fast enough so I kind of punch myself in a face a bit.  No worry, no bruise.  More like a slap on the face.

And thus begin another day of trading without thinking much.  Trust me, you don’t want to think much when trading.   Going in=Action; getting out=Action.    It is that simple!

Don’t be like: Going in=worry… OMG!… “Why me!?”… tear forming… keyboard on the wall… endless debate on the wisdom of cutting losses quick… frozen to headlight syndrome… = Inaction.   Meanwhile, you butt is getting really red from sitting on the hot plate!  Ouch!  Why do you want to do that?

Be careful!

And its financial impact could be worse.  SPY chart pattern looked like it is starting the 3rd wave to the downside. If anyone is familiar with Elliot wave, the 3rd wave usually last longer than the other 4 waves.

But it doesn’t matter what we think or opinionated on today action; in my book, today action screams caution.  I moved 65% of my position to cash.  There was no thinking on my action; I just did what my trading signal told me.

You will be amazed at how much calmer you can be when you are not overly exposed in your portfolio.  Your ability to see clearly on what the price action is trying to tell you without all the noise from your emotion/thought improves dramatically.

Remember, the market will always be here; you just need to have the cash to play it.  When in doubt, stay in cash; that is my motto.

Be careful!