AAPL

I'll admit I was a little nervous last night when the futures were up so strongly, and this morning they were still up but not as strong. Todays action in the markets reinforced my bearish feelings.

 After the market close there was a lot of chatter about Apple. (AAPL) I don't usually follow Apple but have been aware that it has done well over the last few years. Looking at the chart of Apple gives some insight into the sentiment of the markets. Apple has been a darling of tech. Tech has been the strongest sector over the last few weeks. And now it appears to have made the beginnings of a top. As a lesson it is hard to find a better example. My notes are on this chart, but watch this stock over the next few weeks. I think it will be a good lesson......

It was curious that the treasuries didn't go up as strongly as I would have expected today with all the bearish indicators otherwise..... TLT:

Here is a chart of the Nasdaq index. (QQQ) Notice the volume on todays downday.

The point of these blogs is to make the point that in order to make money in the stock market by speculation one has to have the ability to change his mind when the facts change. It looks to me like the facts have changed. At least the odds seem to be that the markets will be choppy for awhile. So I think it prudent to stand aside. (I am actually short the smallcaps using the reverse ETF TWM....) But the point is that last month I was bullish and now I am not. The rally has remained on low volume and now the volume is picking up on down days. I do not argue with the market. At least I TRY NOT TO ARGUE WITH THE MARKETS.
One of the best quotes I've heard was made by Bernard  Baruch. In his book, "My Own Story" he says he is asked by someone why he has changed his mind on the markets. He replies to the effect: "When the facts change, I change my mind. What do you do, Sir?"
This is the flexibility that the speculator must strive for! Let the ego go.
Writing this blog does make that more difficult. When I make a "prediction" I want it to go as predicted. If it doesn't go as I thought, I feel embarassed. But, I still manage my trades on the best impression of the market, and my trades often change before I make my opinion known on this blog. That is why I alway say:

Control your risk!!  (Control your own risk!!)
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