Big changes the last few days. Got walloped on AAPL and lost $464 after the 10% dive post earnings. I eventually sold out at $460.67 midday. By the end of the day the stock slid another $10 to $450.
I also shorted the S&P500 by buying 350 shares of SDS at $48.83 for a net leverage of ~300% on the index.
I blew AAPL big time, but I sold the trade and moved on. I should have sold after earnings release in the after hours when my thesis of a pop failed to materialize and I would have cut my loss in half.
I shorted the index at 1500 under the thinking that the market needs a little rest. This was a premature short and I need to keep it on a short leash. I need to look at buying it back around 1505 if it looks like the rally is continuing. I also need to close it out if the market is finding support near 1500 and building a base for the next rally leg.
My mistake on AAPL was looking at the weakness on the chart and assuming the sentiment was overly bearish. Had I ignored the chart and instead listened to the crowd, everyone was saying AAPL was a bargin and was a good buy. This means everyone was buying the dip and no one was left to buy earnings. I also messed up the after-hours trade by not getting out as soon as my trade failed to work out. I was holding on hoping for some good news out of the earnings call related to the dividend or a share buy-back, but it never happened and the stock tanked another $30. I need to get a lot better at pulling the plug quickly after my original thesis fails.
My SDS short was impulsive and trying to pick a top at expected resistance after breaking 1500. This is not a sound trade and I need to keep a close eye on it and bail quickly if it isn’t working out. Today the market regained 1500, but diped underneath it, but rather than cascade lower, it is finding a floor and making another assult on 1500.
A close above 1500 tonight and trade above 1505 means I need to get out and consider going long.