How Did Apple’s Post Earnings Crash Affect You?

Be honest, I won’t tell. Did your brokerage account suffer a serious ding from that surprise post earnings crash? Who in their right mind would have ever thought that Apple’s (AAPL) stock price could fall more than 10 points after such blowout numbers?

Look, we can expect this if there were missed numbers, like margins fell below expectations, or the top line was short of the whisper number, or even if the forward guidance wasn’t up to analysts’ expectations. But this was way out there.

Apple beat most analysts' expectations, provided very positive forward guidance, and margins were at the top end of everyone’s predictions. So, what gives?

The only explanation is the old sell the news argument, that big investors ran the price up to meet the expectation of great earnings, pulling all those retail investors with them, then sold off after earnings, booking all those profits, while the retail traders like you were left standing there flat-footed and jaws dropped.

apple_watch_taptic_engineThen to add insult to injury, news breaks that the Apple Watch rollout was delayed due to some problems with the Taptic Engine, pushing price down further. But the problem was quickly resolved by Apple prior to launch, so it was really a non-issue, just good fodder for the bears and deniers. This did however leave some people wondering about Apple’s reliance on a single supplier for the watch part.

So, did your earnings trade hit a stop? Did you over leverage and take a big hit? I’m sorry for you if this unexpected event hit you hard. It doesn’t seem fair.

You probably don’t want to know that subscribers of my Apple Auto Trader service did quite well, as two of the systems traders were in short positions, netting customers huge gains. In fact, the DBOL system is still short, having booked half its position, while the MOAX system already booked all of its profits.

This is the problem with trading, you simply can’t anticipate what the big boys are gonna do to screw you. And trying to make those decisions to go short, when all your sense are telling you that Apple should be skyrocketing on great earnings, is a very difficult, nearly impossible thing to do. That’s because your emotions are all tied up in the belief that the stock should go up.

The Auto Trader has no emotions, so it just trades the strategy, and executes perfectly. Systems trading is the only way to go. The Wall Street wonks are banking on the fact that most people don’t trade with systems, leaving them sitting ducks for their pleasure. Is that what you want to be, a sitting duck?

Disclosure: None.

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Terry Caruso 9 years ago Member's comment

Did nothing but cry. Lol. Kidding. Just rode it out. Have enough invested.

Corey Gaber 9 years ago Member's comment

I bought 200 cheap shares. Love those fire sales.

Stock Vamp 9 years ago Member's comment

I've had shares since 2010. Not selling a single one.

Danny Straus 9 years ago Member's comment

It made me hold tighter. Nothing has changed. Going higher.