AAPL Follow Up

From yesterday's AAPL analysis

Today, we have follow through selling in AAPL.

Take a look at the bearish ascending wedge and notice the 1-day false breakout that I've been talking about as being so common place before a reversal. THIS IS 100% BECAUSE TECHNICAL TRADERS KEEP DING WHAT THEY'VE LEARNED IN 100 YEAR OLD BOOKS AND HAVE NOT ADAPTED TO THE FACT THAT THE MARKET UNDERSTANDS EXACTLY WHAT THEY ARE THINKING AND WHAT THEY WILL DO WHEN PRESENTED WITH ANY NUMBER OF TECHNICAL PATTERNS. In the red box, we have a signal candle violated triggering a short signal in AAPL.

The Linear Regression chart (if you can't see the blue lines, click on the chart for a larger view). When this channel breaks, we will likely see a surge in volume. There's a good chance we will see a bounce too unless the entire market breaks down. This is a trade that is well suited to longer put options and t phasing into the trade in the same manner institutional money does (if your commission structure will allow for it).

The 3C 15 min chart is where we see swing reversals and we see that here on the red negative divergence. Recently the 15 min 3C chart has put in a leading negative divergence which is the worst or most powerful type-it leads price lower.

The 10 min chart shows an attempted false breakout to be exactly that-false. While many technical traders have been taught by books to buy such a breakout, smart money knows this and they use the false break out, the subsequent drop to use the trader's own losses to enhance their short position gains. Just look at the gains they've made alredy from longs selling at a loss. It requires no additional investment from intitutions, it works every time -why not do it? This is why we have to adapt.

I might look for a bounce to short into strength, ideally though I'd like to pick up some shares now in case the market falls apart and we never see that bounce.