This blog post could be a book but I will keep it short and to the point.

Too have been bearish on Apple this year is simply the worst possible trading method that anyone could possibly have had. They are violating every principle that I know of for successful trading that has personally made me great returns over a thirteen year period of time.

  1. The big money is on the side of the trend, until it ends, not betting when it is over.
  2. If your plan is to short Apple then you need a true strong reversal signal like an exhaustion top or the loss of a key moving average like the 20 day or 50 day.
  3. We are in a Bull Market, the money is on the long side not the short side.
  4. If you must short in a Bull market, then short the junk. Maybe a NetFlix misstep or maybe Research in Motion or Amazon because they are losing to Apple. You don’t short the best stock in the entire market, the probabilities are against you.
  5. Even those lucky Apple Bears that finally nail that short have missed a 200 point run that I have participated in and captured the vast majority of. How much did they lose with all their previous shorts? Will they finally make more money down than I made on the way up?
  6. Also,  Apple bears need not worry about the majority of Apple Bulls, we will not ride this all the way back down, we will get out when our trailing stops are hit or Apple loses key moving average supports. I bank my profits monthly on in the money call options.
  7. Most Apple Bulls are not perma-bulls there will be a time and a place where a competitor has finally started to compete with Apple and it actually starts having declining sales and earnings and the stock does start to fall and fall. One day, in a Bear Market, we the Bulls may become Apple Bears and short after Apple loses the 50 day moving average multiple times. But somehow I think then the contrarian Apple Bears will think Apple is a great value and a buy and then go long and we will switch sides and start this battle all over again as Apple plunges 200 points.

By Steve Burns

After a lifelong fascination with financial markets, Steve began investing in 1993 and trading his accounts in 1995. It was love at first trade. After more than 30 successful years in the markets, Steve now dedicates his time to helping traders improve their psychology and profitability. New Trader U offers an extensive blog resource with more than 4,000 original articles, online courses, and best-selling books covering various topics.