Thursday, October 11, 2012

Where Have I seen this before-AAPL/SPY

 AAPL intraday with a very familiar bearish descending triangle which is a consolidation/continuation pattern, any technical trader who has read a few hours of a TA price pattern handbook knows this pattern and well, often shorting inside the pattern, but most wait for confirmation which is the break below the pattern, sometimes it comes, sometimes it doesn't. However the larger point is the more obvious the pattern, the more likely it gets manipulated or was set up as a manipulation. It reminds me of another descending triangle we saw with a positive divergence going in to it.

IT was in the SPY on a longer timeframe, but the markets are fractal, we already knew the bearish continuation pattern had a positive divergence and thus we'd be seeing a move to the upside, the break below the pattern (confirmation) where the shorts jumped in is where we added a bunch of leveraged longs as hedges to core short positions.

What happened next?

That was the June 4th low, the market rallied ever since, well recently it's been a little "ify"

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