AAPL Analysis-Market Analysis

Since AAPL is virtually the market, what happens there effects the entire market and what I see makes a lot of sense. For me, this is one of the most exciting finds in a while and helps answer the question of "when?"

Starting from the long time frames (the most important) and working down.

 AAPL 60 min is in a relative negative divergence, that means the amount of accumulation present now, is the same as when AAPL was lower on the 8th, even though AAPL has gained. This would suggest AAPL has been distributed (sold/sold short) into strength.

 That divergence is flowing from worse divergences in the lower timeframes like this 30 min chart which is leading negative (remember they bleed in to the longer time frames if they are strong enough), we can also see the event on the 15th which I believe is a pivotal turning point for AAPL. 3C has not been able to surpass the 15th.

AAPL 15 min leading negative divergence-we have excellent confirmation.

 This 5 min chart suggests the end game, it is leading negative, but shows a late day positive divergence (the positive divergence is in a leading negative, meaning it is not a strong positive, but there seems to be some accumulation and I believe this is what is setting up the end game for AAPL and the market).

 Look at volume and volatility, it is squeezing very tight and AAPL has a fairly clear resistance zone.

 60 min Bollinger Bands show the volatility squeeze.

And here's the end game in my opinion. I'd say 80% of the time, before we see a major reversal, we almost always see a head fake move. Being AAPL is the most watched stock in the market, a head fake move here is almost a given and would set the market up for a sharp fall as AAPL longs are very loyal, they love the stock so they'll certainly buy a breakout move.

The purpose of a head fake move is to lock in as many longs at an eventual loss as possible, when the stock moves back down and puts those longs in a losing position, they start to sell, adding supply to the market and pressuring prices lower causing the remaining longs to take even deeper losses until they sell and it creates a cycle of selling. This is why we see these moves just before a reversal, they add extra fuel to the fire. A good recent example was the head fake trade we identified in GLD days before it reversed, it should be noted though that a head fake trade can happen in days or it can happen in a day or even hours. Here' the result...

 GLD took the sharpest 1 day loss it has seen (other then moves already within a down trend like an exhaustion move at the end of a downtrend which tend to be big) since 2008.

This is the point of  head fake and this is what I think the highest probability outcome is. This would also mean that we now have probably the best timing indicator for the market break. If you are wondering, "Well what if this is just a new leg up in AAPL?" I would refer you to the 3C charts, they are not accumulating for a new leg up, they are showing heavy distribution not only in AAPL, but in all of the market average and important industry groups.