I wasn't able to get the order through on time to expand the monthly calls, but that's fine, if this is as I suspect, even Monday should be fine.
When dealing with a base, the generally accepted wisdom (same for a top just in reverse), the larger it is, the more upside it can support and that's basically because there was more time for a larger position to be accumulated and stronger gains are needed to sell that larger position in to strength. I still suspect the move will be very fast and strong, it needs to convince traders that their current bearish sentiment is wrong, the good thing is it doesn't take much for traders to change their minds. 2 or 3 days of solid gains would probably do it.
Most AAPL recent positions were picked up on recent divergences, I didn't expect the larger 3C signals and base that has since formed to be for this move, it appears they are.
Here are additional signals I think are worth sharing...
This is what I suspect to be the base and after that 200+ point decline, it's not surprising that AAPL would need some more time to put a base together, however I did not expect this base (which wasn't even formed to be a reasonable expectation for a near term move, I suspected something longer term was going on in AAPL and would take additional months to complete.
On an hourly chart today's last candle (remember the market's behavior is fractal through different timeframes because human behavior is the same) is a bullish reversal candle called a hammer, it must appear after an extended downtrend, it should have a lower wick at least two times the size of the body and the close should be as close to the highs as possible (essentially the smaller the top wick or no upper wick, the better). From experience we know that increasing volume tends to double the chances/probabilities of a reversal candle. Basically everything that can possibly make this the strongest hammer it can be, was present.
Additionally there was a stop out which appears to have been accumulated as volume increased on the break, but was highest at a capitulation-like low (again this is the same behavior seen on daily or multi-day charts on this 5 min chart.
On a daily chart, as discussed last night, the top of the base has the exact same reversal candle stick pattern we talked about last night, a strong first candle of the set of 3, a star at the second candle representing a loss of momentum, heavier volume on that reversal candle (churning) and a confirmation candle that closes lower the next day after a higher opening, in this case the confirmation candle is also a bearish engulfing candle. Today's daily candle is a hammer (upside reversal ) on slightly heavier volume,
As for the 50-bar 5 min which many traders watch and the Trend Channel, note the increase in volume as AAPL broke above the 50-bar average (yellow arrow) just confirming traders watching this timeframe and moving average combo. The move below the Trend Channel is a sort of "Channel Buster and again confirming traders are watching, note the heavier volume at the EOD (in the yellow box) as price moves above the 5 min/50 bar average.
The 60 min momentum screen I use shows AAPL going positive, then negative and price reversing and then positive again. White arrows are positive divergences in the indicator, red are negative and green is trend confirmation. Recently Momentum, RSI and MACD all went positive.
TSV 38 and 55 both have been in a positive divergence at the base.
The DeMarketor buy/sell indicator ha some interesting signals, MACD os positive and the Bollinger bands are pinching for a highly directional move.
Money Stream (60 min) is also in a positive divergence at the completion of the base.
Finally on a daily chart AAPL goes from confirmation and some smaller signals moving price to a large negative at the top and for the first time, something that looks positive in the area of our base.
I really can't argue with what I see in AAPL, the only thing that is surprising is price didn't make a lower low at the second low to run out the stops and set up a bear trap.
I'll be updating the market later, I have a lot to look at. So far none of my analysis has changed since Tuesday night's
VIX / Market example, I still expect all the same, the charts have confirmed the same even in unlikely circumstances that make it difficult.
No comments:
Post a Comment