Quick AAPL Update

This is an update to yesterday's Trade Idea: Short Term Options) AAPL Puts and the following post, AAPL Charts Follow Up.

The AAPL put position is already in the green , even with 5 weeks of time left on it which is a pretty long expiration to be green so soon, but there were several things I liked not only about AAPL, but the market and of course AAPL's influence on the market.

As you can probably imagine, not too much has changed in the brief time since yesterday's AAPL Charts Follow Up update, but this is what we have so far and a few things just happened to work out after these posts in to the close which are still worthwhile concepts that can be used on any timeframe.

 Yesterday when the above linked posts were published, I was hoping for AAPL to close with a Doji or Star candle, a loss of momentum and typical reversal candle set-up.

While this wasn't a big part of my analysis and decision with AAPL, it is a concept that works, the difference in the rate of change in AAPL's price.

I almost always say that the increase upside Rate of Change is "SEEMINGLY" bullish, but in fact like an upside Channel Buster, more often than not, it's a red flag that the trend is about o change. The stock has entered a manic phase of chasing prices higher which is the perfect set up for professionals with large positions to sell in to. As Appaloosa said in 2013, the market was priced to perfection and they were selling EVERYTHING not nailed down, simply because a find that large needs time (15 months in this case) to unload all of their positions in to demand and strength. While it's not something most of us deal with unless you are trading a large position in a very illiquid asset, the fact is they need to be wary of not only dumping too much at once and sending the supply/demand equation against their position, but more importantly over the last 5+ years is avoiding the High Frequency Trading "Iceberg Hunters", which are HFT's that specialize in "pinging" the market, looking for signs of an iceberg, the visible potion of a much larger order, so they can frifrontont-run the order and force the seller (or buyer) to pay up, which has become one of the most expensive execution costs for large funds, thus they have to feed out large orders in small pieces and need higher prices and demand to do it while trying to avoid detection of the Iceberg seeking HFTs'.

I digress... The closing Star candle yesterday on heavier than average volume was what I wanted to see and the change in AAPL's price ROC is an added bonus.

Thus far today, the gap up looks like it may provide a bearish engulfing candle on the close which is the downside reversal confirmation candle.

 On the 1 min chart late yesterday there's a VERY small positive divegrence, but as we commonly see, 3C charts pick up the next day where they left off and the late day positive divegrence picked up with a gap up, which already tells me a bearish engulfing candle is a probability not just because of the gap up and the small positive divergence that can't hold much more than a gap up open, but the context of the 1 min chart which is inline with today's downside...

This is the context of that same 1 min chart, leading negative so the probable outcome is not bullish, in fact the opposite, so although I didn't plan the position based on these charts, but hoped for the closing star candle, they worked out nicely so far.

While this may not be the most useful concept in very short terms like this, the concept works on any timeframe, thus the very short divergence has to be judged against the larger context with the short divergence likely to fire, but the linger term divergence likely to be the highest probability resolution.

I'll update AAPL again as the charts develop beyond yesterday's set that were posted.