NEW YORK ( TheStreet) -- No sane person wants to go long Apple (AAPL - Get Report) right now. They say it's a broken stock, toxic waste, a money pit. The hedge funds left the building months ago, they were equipped with first-rate smoke detectors and evacuation plans.
The retail traders hadn't a clue. They thought this building was unshakable, unbreakable. Now they're trapped and can't find the fire escape they never thought they'd need.
The little guy, the retail trader, is always the last to hop aboard a rising stock, grabbing only the last 10-15% of gains before topping out, and the last to get out as things crumble, and so they bear the brunt of the decline.
When things get really bad, like now with Apple down 40%, retailers are hoping to salvage what little capital they have left. Unfortunately, hope is not a strategy. The big players, hedge funds and institutions, they're all strategized up, and are more than willing to help retailers out of their predicament, happy to unburden them of those diminutive Apple shares.So, how do the big boys do it? How is it that they consistently outperform the retailers? Is it because they have superior information, money to manipulate the system, the discipline to run sophisticated strategies, experience? Yes, of course, all of that, and more. That's why they are called the smart money, and hold a huge advantage over the little guy, the dumb money.
There are ways for a retailer to level the playing field to some degree, but they can never match the big money resources. At the very least, an individual should gain a basic understanding of how markets move and how mobs behave. Markets move in cycles and waves, patterns emerge and with the guidance of an experienced and talented technician, you just might gain an edge. But don't get full of yourself, because if you're like most people, you'll eventually give back whatever you take in. So, I provide this Apple alert with the caveat that I take no responsibility whatsoever with how you choose to use the information. It's strictly for your entertainment. I suggest you paper trade what I'm about to tell you, learn from the techniques, and if you become a paper millionaire, you can send me a tip. Some sage advice will do.