Today’s words to live by are:
“DO THE THING YOU FEAR THE MOST AND THE DEATH OF FEAR IS CERTAIN”
“YOU HAVE TO FACE YOUR FEARS OTHERWISE YOU WILL NEVER OVERCOME THEM”
“IT TAKES GUTS TO LEAVE THE RUTS “
So to all of you “What EXACTLY Are Your Fears” be it in the stock market or life in general. Is it fear of being wrong? Is it fear of losing? Is it fear of making a stand and being ridiculed? Fear of failure? Fear of doing something never done before? Fear of stepping out of ones comfort zone? There are all types of fears folks, the list is endless. But the phrases are true. We’re not going to cover all of this, we’re just bringing up a big piece of what it takes to be successful in the markets today and maybe one more.
It is fitting to cover a little of the above fears because of the “In The Face Of Fear” trade in AAPL.
All AAPL did prior to earnings was pullback to support at the green trend channel line. That was your cue to buy the stock ahead of earnings and benefit from the 50 point plus pop!
What did you have to fear?
In the weekend newsletter to our paying subscribers we said:
“First off this IS the kingpin of the market, this IS the name that the market makers go to to prop the market. This IS the name that the market goes to save the indexes. This IS the name that when it goes up it takes everything along with it and here we are selling off into earnings. Because of that an old adage comes to mind.
The rule of thumb is if they run ’em into earnings they tend to sell ’em off on earnings. The flip side is if they sell ’em off into earnings the tend to pop ’em on earnings so we’ll see. You can’t tell me they are not selling it off into earnings now can you.
Keep in mind it is just a rule of thumb and no guarantees. Besides given the state of the market (On the verge of another leg down, The C wave of an ABC correction if you will) there might just come a point where they will use this name to “Save The Market” so be aware of that, the buzz would be “Magically” AAPL takes off. We’ll see.”
Now let’s look at PCLN -680 to 727!!
That 680 level was the “DO THE THING YOU FEAR THE MOST AND THE DEATH OF FEAR WAS CERTAIN” Zone. But what did you really have to fear?
The stock had been stair stepping down in classic Elliott Wave form. The stock was in Grand Slam to the 50 day average mode. We gave our paying subscribers a heads up about this when we talked about what happens to the follow the out of control screamers if the markets staged a C wave. So our paying subscribers were already prepared in advance of this so you see you really had nothing to fear. Except? Risk of loss AFTER the stock had already been pummeled.
So that said what was the fear that kept some of you out of AAPL and PCLN ahead of the news? Fear of losing usually is at the top of the list. And rightfully so, we get that. BUT there is no way around it. The moment you take a trade you are at the mercy of the market and have no control because you have no gains to manage, just risk. The bottom line is that the only way you will overcome that fear is to be willing to pay the price if you are wrong. And you know what? YOU WILL BE WRONG, you will wipe out and fall off the horse, stocks WILL move against us, that’s reality and a fact. Remember what you resist (in this case letting the fear of loss keep you from doing something) persists. We’ll admit AAPL and PCLN were extreme examples but you get the point we hope.
It’s really all about how you manage that. The way we do that is to accept that “There will be times” and that we’re not perfect as nobody on the planet is. So to all of you out there who are trying to be perfectionists? The Gecko from Geico says “FORGET ABOUT IT” ain’t happening.
So for us the next time something like AAPL and PCLN stare us in the face even if we get knocked off the horse and wipe out on the trade we have two things going for us from that point forward. One is TRADE SIZE RISK MANAGEMENT and the other is Rocky Balboa who said:
“It ain’t about how hard you hit, it’s about how hard you can get hit and keep moving forward, how much you can take and keep moving forward, that’s how winning is done”
Which brings up another quick point, to those of you who at times are down in the dumps be it in the stock market or life in general (we ALL are at times so you are not alone and don’t ever forget that) just remember what Rocky said above!
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