Full AAPL Update

We still have some short term traders in AAPL and some longer term traders in or looking to get in.

If you have time one night or weekend, go back and look at MSFT from the 1990's to 2000, it was actually a much bigger growth stock story than AAPL before AAPL hit a brick wall in 2012, one we had been warning about for several months. Of course AAPL longs were in love with the stock (Fall in love with your spouse, your children, a football team, fishing, BUT NEVER with a stock)  and anything negative was not taken well. The typical response was, "You've been warning for 2 months and AAPL is at all time new highs", then it wasn't and don't ask me why, but for whatever reason most people just don't get out of a stock like this despite the decline which ate half of AAPL's value (-45%) in 8 months, so you would have been much better getting out two months earlier, even though we weren't calling for a reversal two months earlier, just saying there was big trouble brewing, our actual reversal was near pin-point, which was a hard lesson for me as I got lost in the lines trying to get the best possible short position and closed a short on expectations of a SMALL bounce that I could re-enter, then AAPL fell apart. This is the kind of dynamic I have been talking about recently (past week or so), which is deciding at what point you strike a balance between trying to get the best entry/timing (top-tick the market) vs. at which point you say, "This is close enough, let my risk management handle any volatility from here and lets get ready for the ride".

In any case, MSFT's growth story ended not only because of the Tech bubble, but like so many other growth stocks, once the "D" word, "Dividend" is declared, the growth story ends. Then watch MSFT from about 2002 to 2011.

In any case, here's a full AAPL update...

 This is what I'd call the kind of "Crazy Ivan" shakeouts.

A Crazy Ivan is a shakeout of stops and limits, typically on both sides of a price pattern or some other technical level. I took the name from the movie "The Hunt for Red October" in which Russian Submarine captains would do a full 180 turn to "Clear the baffles" in case any subs were following in their prop wash were they couldn't be heard, it was a game of chicken that exposed any closely following submarines and that's kind of what this technical price shakeout does, clears a lot of stops and limit orders and leaves them burnt. There are a lot of reasons for this tactic, most often to use technical price patterns against traders to reach a specific goal based on the predictability of Technical traders' thinking. The high volume is a sign, whether intentional or not, that a lot of traders were shaken out of the trade wither way they were positioned.

 My Custom "DeMark" inspired Buy/Sell scan shows AAPL as a double top, a true Double top with a "U" shaped middle as they should have. The only difference is old school double tops use to often fall short of previous resistance, which was one way to know the stock was weak at the second top, however since so many technical traders expect this, it's much more common to see a new high in which traders will see as a breakout and put in a confirmation buy which sets up a bull trap so when prices start declining, retail is stuck holding the bag at much higher prices and eventually will give in, giving the short a lot of momentum on the way down at various price levels as all traders have different risk tolerances and levels of pride.

You can clearly see the indicator calling sell signals, even buy signals and a current large sell signal over the longer haul so I have little doubt AAPL is heading lower rather than continuing its growth story.

 This is a simple custom indicator I created and my MACD heat mp which is a full blown negative divegrence from settings of 6/12/9 all the way out to 52/104/9. The Channel itself is turning lateral and very close to showing a major change in character.

 The current Trend Channel's stop is at 98 on a 2-day closing candle basis, but I suspect we'll see signals before the Trend Channel hits a stop out which it came very close to within the last week.

 This is the daily AAPL 3C chart, one of the strongest indications of what's been happening in AAPL in underlying trade.

If you consider it was Dan Loeb's Third Point fund that started distribution first and then the rest of the hedge fund herd found out on a quarterly release that Third Point no longer held AAPL as a top 5 holding, all heck broke loose and all hedge funds tried to fit out the same small door at the same time sending AAPL down -45% in 8 months. It's little wonder 3C looks the way it does. Just from a psychological point of view from the perspective of a hedge fund manager going through absolute hell during the time, it's little wonder they've decided to move on and look for greener pastures  which is interesting because it was just before this that AAPL launched new products like yesterday and my opinion was, "This is the first time AAPL has had a product launch that was EVOLUTIONARY rather than REVOLUTIONARY", Steve Jobs will be missed.

 This is AAPL's 2 hour chart, we've been waiting on these longer charts to move from in line to negative being the larger daily charts are already rotten.

The 60 min chart broke first and then the multi-hour charts showing some heavy distribution in the area.

The 10 min chart accumulated like most of the market around early August to the 8th with the cycle moving to stage 2 on the 11th,  but notice the last minute stop run just before AAPL headed higher (head fake) at the yellow trendline and yellow arrow. The reasons for such a seemingly uninteresting move (except at the time if you were long) are numerous, they can be found in "Understanding the Head Fake Move" articles linked on the members' site toward the top right side.

I didn't think the leaked celebrity Iphone photos were inside information, but the 10 min chart seems to show increased distribution right before the break on that news.

From a short Position Trade perspective, AAPL is close.

From a short term trade (like the call trade from last week (added to this week)...

 The 5 min chart had some gas in the tank, you may recall the market maker situation and last night I mentioned it again as AAPL moved right to the area that would allow them to dump all of that losing inventory. I'm not sure how much the 5 min chart has left, but there's something there today and this tells me that higher AAPL prices short term are a probability as we have been seeing thus far this morning.

 The 3 min chart has a positive that developed this morning...

As well as the 2 min chart

And the 2 min chart's trend.

As of right now the 2 and 3 min charts are leading at stronger positive divergences and the intraday is in line so I'd expect higher prices. When I start to see these deteriorate, AAPL should be ready for the next trade  which I suspect will be a longer term position trade and on the short side.