AAPL Update

As far as I'm concerned, AAPL is in a primary bear market and just saw a bear market counter trend rally, which are some of the strongest rallies you'll ever see, there's a reason for that, if you think about it, you'll probably come up with the answer, but as a hint, it all has to do with emotion/sentiment.

I'll gladly change my outlook on AAPL if the evidence manifests, otherwise, I want to continue building out the AAPL equity short position and enter some short term puts when the opportunity is there.

The last few days AAPL seems to have seen a bounce AFTER it completed the bear market rally-these few days are the same few days the market needed help last week.

Here's what AAPL looks like, what I'm looking for and what the trade set ups would be from here.

 Here's AAPL's primary bear market with two counter trend rallies, the first at 12% and the most recent near 18%.

Here's the rally and the bounce of the last few days on a daily chart.

This is the primary 3C trend in AAPL, I had warned people for a while as AAPL was hitting $700+ that this party won't go on much longer, but no one wants to hear that, especially AAPL longs at the time, 300 points lower and everyone has a much different attitude.

 This is the accumulation for the recent counter trend rally as well as the distribution, this was an excellent place to add to AAPL shorts as some of did and this most recent bounce looks like it will be another opportunity to add to shorts at low risk. If we get some decent upside momentum, AAPL may even be worth a put play in the area, but that's a trade that needs to come to us.

This is the bounce of the last few days, note the relative positive divergence followed by a slight leading positive (typical progression of a divergence). It seems like AAPL was prepped for this move, it may have been part of the bigger goal for last week as AAPL represents nearly 20% of the weight of the NASDAQ 100 or about the same as the bottom 50 weighted companies combined.

 This 5 min chart seems to be telling us this bounce is ending.

As does this sharper 2 min chart (the shorter chart should be sharper and should migrate out to longer timeframes. We can still see an intraday bounce higher and that would be a gift for tactical positioning, but even here, so long as these charts stay negative and get worse, this is still a decent area for an equity short. For an options trade (PUT), we need a decent day of upside momentum in to heavy distribution.

AAPL's VERY recent targeting for its many tax shelters isn't likely to help AAPL in the coming weeks and months either.