AAPL Update

AAPL was one of the key assets I believed would be part of a timing signal and specifically today.

This is the first AAPL post yesterday, "AAPL Update - Trade Ideas" other than this part about timing and what to expect,

"This brings us right back to the triangle, I'd say it is VERY likely that there's a head fake move that breaks below the triangle which would be in line with out shorter term trend expectations for the market, this is the head fake move we see before 80+% of reversals, it will allow Wall Street to accumulate stops and more importantly will use the new shorts as fuel to power an upside move on a short squeeze.

It is my belief that not only will an AAPL downside head fake move below the triangle match up with our current market expectations, but the reversal to the upside in AAPL will occur at the same time the market bear trap/ short squeeze occurs and AAPL's nearly 20% weight will help lift the NASDAQ 100."

The other important part of that post was the anticipated target for AAPL, I generally don't like guessing at targets, but AAPL has been hit so hard, it's difficult not to believe it can pull off at least a 50% retracement which would put AAPL somewhere around the $550 neighborhood, about a 120 point move and thus probably worth an equity position if you prefer not get involved with options.

The second post yesterday was more about AAPL being a sign post for the broader market, "AAPL a Bellwether?"  . Probably the most important part in this post would be,

"I would say with the trendlines moving to the next day the break in AAPL would be just under $435, this doesn't mean it hits $435 and just reverses to the upside, no, it could be quite an ugly breakdown, but the head fake move (we will have to confirm the break is a head fake, but I have strong reason to believe it will be)  is almost always the very last thing to occur before a reversal (to the upside with a breakout above the triangle in AAPL and coordinated with the market), this goes for virtually any timeframe you trade.."

The charts for AAPL today...

 Daily AAPL trend from the all-time high to the Primary down trend shedding over 300 points and about -45%. I have a 50-day moving average which is a crowd favorite, ironically this very clear triangle's resistance area sat at the exact same level as the triangle's lower support I had posted about yesterday.

So a break under support of probably the most common pattern in Technical Analysis would also coincide with a break under the most common moving average in Technical Analysis.

And traders care, here's the 50-day with a closer view, AAPL sees volume up on a break-through the 50-day, it sees volume just about double on the next break below the 50-day, the previous 4 days it acts as support for AAPL and today it is at the exact same area we are looking for a break below today as explained in several posts yesterday. Strangely though,  other than the volume at the actual intraday break, volume is quite light today all things considered.

On a 5 min intraday basis, here's AAPL breaking below the triangle's support, right around the $435 area as I guessed yesterday and volume swells on that bar.

The most important part of a head fake move is being able to confirm it's a head fake move and not just a break of support. First because of some of AAPL's longer term charts the probability of a head fake move was high before it even occurred, the fact that a symmetrical triangle was the mechanism everyone would be watching was kind of fishy too and as was pointed out to me, the 50-day moving average being at the same exact spot was just too much, I'd have said 90% chance of a head fake move yesterday.

Today we see the 10 min chart above actually moving opposite price as AAPL breaks below support, I'd says that's a pretty strong indication of a head fake move.

I also think it's a pretty strong indication of where the market is as head fake moves are often the last thing that happens before a reversal and we did have that strange overnight ramp which was not correlated to anything, not to news, not to the Nikkei, not to the USD/JPY, it almost seemed like dress rehearsal to see how hard it would be to ramp the market overnight to a gap up opening because today's sure didn't seem to serve any purpose.