My Take on AAPL (Updated)

Much of what I said back in my post from December is still in effect and I still am standing by my Long Term bearish stance and that we are currently in a topping pattern.  That doesn’t mean there still can’t be gains on the upside.  I would rather be long than short right now.  I am currently long

Anyways, here are is my updated chart with notes (click to enlarge):

If we do break support, I suspect some panic selling to occur. 475 to 420 price range has largely been untested and not much action occured in this range on the initial break, so don’t expect this area to act as support either.

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My Take on Apple (AAPL)

Last time I posted charts on my blog it was on Oct 1st, talking about how I felt the market will react the rest of the year. I pointed out the reasons why I felt the market was going down (election, fiscal cliff, XLI & IYT divergence) and the S&P has been down 5% since.  I hope this helped everyone that read.

Now I wanted to talk about where I think AAPL will be headed in the coming weeks/months.  Everywhere you turn this is in the headlines, seeing equal coverage along with the ‘fiscal cliff,’ ‘Obama,’ and the ‘EU.’  Lots of people have a position in this stock, whether it be long or short, including myself.  This post is meant primarily to get my own thoughts out and is based 100% on technicals.  Of course when you dive into the fundamentals, you’ll find a loads of information pushing you to various directions, but I will be giving this outlook solely from a technical standpoint.

First lets look at how AAPL has been doing over the past few years:

We have had a clear uptrend since March 2009, with only a few minor pullbacks and even a larger, secondary pullback more recently from April to May ’12.  The largest retracement was from Apr-May, which was approximately 43%.  This is below what I consider the important mark of 50% being the max a secondary pullback should be.  Anything more, I begin to lean towards and entertain the possibility of a a new downtrend.  From the chart above, you can see the most recent pullback has given back nearly
100% of gains from the wave that started in March.  That is not good.  A move like this cannot be spun as bullish in any sense of the word.

Recap of the 1st Annual Stocktoberfest

After spending the last four days in the west coast, I’m finally back and situated at home in NJ and ready for ‘Sandy.’  Hard to believe I was just on the beautiful island of Coronado, CA and now I’m witnessing a wild frenzy of panicked shoppers at WalMart, stockpiling perishables to bear “Frankenstorm.”
I’ll take this opportunity to do nothing different than what I normally do, other than driving over to the local Starbucks.  Either way, hope everyone stays safe.
As you guys probably know, I had the pleasure of attending the first annual Stoctoberfest that was put together by Howard and his team (Spoiler Alert: It was awesome).  It was great to finally be able to meet many of the individuals that I’ve followed on StockTwits and Twitter since I first started trading.  These are the same people that I’ve learned from and admired from behind my computer screen, so to be able to shake their hands and finally speak to them in person was incredible.

View from the Hotel Lobby…beautiful (especially compared to my view right now)

The first day was primarily a chance for everyone to meet and converse amongst one another (conversations included AAPL earnings of course).  It started off on the deck of the StockTwits HQ.  It was here I got my first chance to meet the StockTwits team, including Howard, COO Francis Costello, and many of the site’s developers.  It also gave me a chance to mingle with a lot of the attendees, including individual traders at various levels in their career and several entrepreneurs of tech companies.  I was literally surrounded by geniuses.  One of the entrepreneurs I spoke with was Benjamin Lowenstein of Colingo.  He is a 27 year old, neuroscience major that had the amazing idea to essentially start a virtual classroom to teach english to people from all over the world.

How will the Market Act the Rest of the Year?

I know it’s been a few months since I’ve posted on my blog. As I wrote in my last post here, keeping up with this blog is very time consuming so I stuck to keeping my posts, charts, etc. on Stocktwits and Twitter. The reason I am posting tonight is because I just want to make my prediction (in more than 140 characters) to where I think the market is going to head into the end of 2012. Keeping it all in one single post will be more effective and easier to understand.

As of the close on 9/14, and the follow-through down day the following session, I began to worry the uptrend we were experiencing was coming to an end. On 9/14 we had a strong day to start, but the market closed only slightly higher than where it opened. The large tail produced in the candlestick was a sign that the buyers were not buying with conviction and that the sellers may be gaining the edge. We then followed with 6 down days in the next 8 trading session, all while maintaining this new downtrend. Furthermore, the action today was not bullish either as we produced a very ugly Bear Hammer, closing below our open price.

Now, AND THIS IS IMPORTANT, the stuff mentioned above is based off the DAILY CHART. As you should know, the daily chart only gives you information on the short term. We’ve been seeing a decline since 9/14 and this may be it, we don’t know. I am just mentioning this to you for the benefit of all ST traders, like myself. I had been tweeting about being cautious for some time now for those that follow me on StockTwits and/or Twitter. As of now, I have very small positions and not leveraged at all, which I normally am even in neutral market conditions.

Watchlist/Followups- Wed, Jul 11th, 2012

My watchlist from Monday is still inplay, so go back to Monday’s post to check that out.  Here are a few followup charts for today:

AAPL
Megaphone pattern definitely a possibility (bear sign).  Broke below 600 earlier but managed to bounce back strong towards the close along with the market.  Still remains a buy over 600 but be careful and stick to your stops (mine is below the 10-day MA).

TGT
Another strong day, breaking above resistance on heavy volume.  Use stop below today’s LOD of 59.17.
Monthly Chart- Big resistance at 61, with minor resistances starting at 60.50. If you are long then I would sell some around 60.50 and add back above 61.

Indices/ETFs- Wed, Jul 11th, 2012

SPX
Bounced off support and rallied towards the end of the day after the Fed meeting minutes did nothing to instill hope for investors.  Expect it to rally tomorrow, but if we decline, then I will be watching to see if we hold today’s Low of Day.  A continued downtrend can be dangerous as the ascending trendline from the beginning of June will be broken.

XLF
Strong day for financials as they jumped .84% today on heavy volume.  Just like the S&P chart and many others out there, this also held its ascending trendline from June.
 
TLT
Bonds continued higher with a big spike earlier this morning, which was quickly brought back down, to close the gap.  Although MACD Divergence has been negative over the past month yesterday we saw a signal line crossover that’s spread continued to increase today.
Always be wary of your long equity investments when bonds prices are rising.