AAPL Update

The head fake move is such a common occurrence before a reversal because technical traders are so predictable, you can pretty much use it on almost any timeframe without any other indicators, almost. You do have to have a general knowledge of what the underlying activity is and 3C is used to confirm that as well as the head fake move, here you'll see an update of AAPL, why the head fake move is so common and why.

 This is the kind of improvement on the AAPL chart that is noteworthy, a leading positive divergence, even though it's only on a 1 min timeframe, remember new divergences have to start somewhere. Look at the exact place the change in 3C character took the most dramatic turn to the positive... right at a move below yesterday's close which is usually first resistance/support other than a.m. ranges.

Why did 3C shape up there? That's where the stops were, that level only needed to be broken to trigger the stops making supply available and at better prices.

As AAPL moved below yesterday's close, it created movement with stops being hit and volume rising, it may not be a lot, but it's probably enough. As there was no more benefit with all of the stops that were going to be triggered, already triggered, volume fell off and there's no point in hanging around the area. Any shorts (I doubt there were many) are squeezed (as a general concept-think about all the timeframes this can happen on and the amount of volume) which creates upside momentum with their covering/buying.

 The 5 min chart that earlier was "Blah", has a leading positive divergence, again it saw that form as a small head fake move was triggered.

Even yesterday RIGHT BEFORE AAPL fell, the very last move was a short burst above resistance as it triggers limit orders, that extra bit of energy created by longs caught in a trap is part of the reason we see these moves so often as they provide extra momentum to the move. It doesn't matter that the move to hit stops was only 5 minutes or so, once that level is crossed, they are triggered.

This 10 min chart also shows there's nothing exciting in AAPL beyond the 5 min timeframe, while I'm pretty quick to take the profit that is available, I also wouldn't be too worried if I wasn't able to based on the fact the divergence didn't move out any further.