You have to love the "true believers."
First, we all know Apple always sandbags. But even I (and I'm a bigtime skeptic when it comes to such things) was impressed with the size of the "beat" that Apple posted up last night.
The market was impressed with it too, sending the shares up some $50 overnight and tacking 50 handles on the NDX, the exact inverse of what a miss would have done.
Yesterday I posted this in Ticks on the forum (available to gold donors):
2012-04-24 13:09:56
And then a short time later...
2012-04-24 13:44:35
Why? Well, as the above says -- I like money. I especially like trades that go my way and don't see a reason to risk turning a nice winner into a potential loser. I covered at $561.93; the trade was nutty good and had bounced off the -23.6% target. It was a bit short of the actual hit but close enough -- and if we were going to get a massive ramp, that was where it was going to come from.
Trading is about money management. I don't post trades in real time on the Ticker, although I do sometimes make posts like this showing a postmortem on those that work -- and those that don't.
Why not post them in real time on the Ticker? There are a number of reasons, with the most important being that a lot of these sorts of things are "stream of consciousness" items, I strongly dislike the idea of people playing "robot" and following someone around on their trades, and a sentence or so is about all you're going to get out of me when I've got my face buried in the terminal and am noodling on what I'm doing.
Incidentally at 14:40 I said this:
2012-04-24 14:40:22
How did that one work out?
Not so bad thus far.
Why?
Again, a technical setup. The stock was coming into earnings this morning and broke out from the top of a range that many, I'm sure, thought was a death-spiral to zero. That's a decent little cadre of people who shorted late (IMHO you're nuts shorting $2.50 stocks, but people do it all the time) and that's more than enough reason to add a bit of a news impulse to things and voila -- a nice little rampjob.
I don't know if it will hold; it might not. Then again it's a hell of a lot easier for a $2.50 stock to go to $5 than a $500 one to go to $1,000. You'd think not and mathematically a double is a double, but psychologically buying $1,000 stocks is a hell of a lot harder than buying $5 ones for the "retail guy."
Today's market is one of fickle stupidity, and therefore you have to, in my view, play a choked-down swing on your bat with good money management. That (unfortunately) means you're not an investor, you're a trader -- or you stay out of the market.
I don't claim to be some sort of guru and not everything I do or talk about works. A lot doesn't work. But if you have decent money management, which is where most people who trade fail, you can make pretty good money (albeit short-term gains and thus taxed more highly) playing this game when things go your way, and when they don't you lose less than you make.
That trades don't always work, incidentally, means you should never, ever do this sort of thing with money you can't afford to lose, and you should never, ever follow anyone else blindly. That includes me, for those who need to have it said directly. One of the tricks to the game is understanding that everyone has a different view of risk, a different style and a different focus. What works for me probably won't work for you, and what works for you probably won't work for me. An exchange of information is good, but a blind belief that you can follow someone else -- anyone else -- is likely to lead you right off the cliff.
So don't do that folks. It's dumb. No matter who the person is that you're "following."
For those who want to discuss rather than follow, in real-time, what they're doing and why, presenting their arguments and the good and bad that comes from it, the forum has a place for that for those who choose to donate to its operation. Click on the "Donate" button from the control panel and enjoy the enhanced access. Just be aware that trading is 90% discipline, money management and psychology and 10% analysis and that 95% of the people who do it shouldn't.
Really.
For everyone else the Ticker will remain as a place to look at the macro economic picture and highlight analytical views that some may find to be of use -- and others not.
As for Apple and its report last night, I've seen plenty of so-called "China Will Save Us" stories, and most of them -- if not all -- are bull****. Note that iPod sales have cratered; that's saturation playing out. The same thing has happened with the iPhone in the United States. My best guess given the game being played with the iPhone (and before you scoff look at the revenue percentage, and how the iPad is basically an afterthought in comparison) is that there are a couple more quarters of this "China" game in Apple's quiver, at which point the "big miss" will come against expectations and then the trap door will open.
The question is "from where?" -- and I intend to try to feel my way around that corner as I did this last time, profiting once again on the short side.
Incidentally, lending support to my view on this is the following from CAT this morning:
We're seeing strong global demand for most mining products and significant growth in replacement demand for products in the United States, which more than offset slowing in China and Brazil,"
Slowing in China eh? Yep...... the "magic elixer" from Bernanke and financial gamesmanship always feels real good -- right before it goes to hell. If there's one thing you should have learned over the last five years it's that the entire "decoupling" meme is utter crap, and further, that the pronouncements that "it will all be ok" are nothing more than lies intended to keep you in the water long after you sighted the first fin headed toward you.
Disclosure: As noted in the article I covered my Apple short yesterday well in front of the bell.
