AAPL Update

I entered some AAPL March $500 Calls, I might be tempted to add to that position if things really look more enticing, although I don't expect to see a whole lot of that until after 2 p.m., I'm guessing the AAPL Pin is probably at the psychological magnet of $500.

I wanted to show some short term (call position) charts, some slightly longer term (equity short) charts and the probable future of AAPL.

This is AAPL in a monthly Trend Channel with the respective gains for each trend before being stopped out.

At the yellow arrow, this is the ROC in price to the upside that almost always is a warning sign that the stock is about to top. I'm sure if you thought about things from an institutional investor's perspective or "Think like a Crook", you can figure out why. Part of the reason I love multiple timeframe analysis is it allows you to see what everyone else misses on a daily chart, take for instance the perfect 3 candle Star Reversal, it's almost a "Tower top", then the stop out of this channel. On a MACRO basis you can see the volatility following a stop out that I often talk about and how dangerous it can be, if you were trading this timeframe. 

I think AAPL's growth story is done, I'll show you why at the bottom.

 As far as the very near term, I chose AAPL Calls because I don't see a high probability trade lasting long enough to make an equity long worthwhile, thus the need for leverage to make it worthwhile. So far the trend of the intraday chart has been beautiful as AAPL makes a "Rounding" like bottom and I say bottom because of the accumulation we see above, it's likely a reversal process.

The 2 min chart is showing a little leading positive action today, you can see a parabolic move in red that was knocked down, they usually don't want to fill orders on moves like that, they try to keep things flat and quiet at the lower end of the range.

I know a lot of traders who scan for volume spikes and breakouts for long candidates, but the most underlying action is going on during the dullest periods, I'd much rather scan for a tight, flat range. These are the price patterns that no one pays attention to and like troublesome kids, when no one is paying attention, they are up to something and they usually don't want the attention while they are up to that something.

 AAPL 30 min shows why I like this as a short term long (Call position) and a longer term short (equity position).

Take a look at the same chart scaled out.

 Remember we didn't do much with AAPL for a while as the 30 min chart remained strong, then suddenly it gave way to a deep leading negative divegrence, soon after a gap down. I'd like to see AAPL fill the gap and move somewhere toward the top of that yellow box to enter a short equity position or add to one, of course we need to verify that there's distribution in to the move up, but I suspect that won't be an issue based on longer charts.

For instance take this daily chart, I had been warning the AAPL bulls who we obstinate that AAPL was going to $1000 and even $1500, they just couldn't imagine AAPL ever dropping and the more momentum it had, the more stubborn they became although we know what we know about changes in a trend/momentum, in addition we also had more than 1 leading negative divegrence such as the one you see at AAPL's top; from that point AAPL lost -45% or $390 points in 8 months.

Area "A" was a area that lasted a while, we could tell something was going on, but weren't sure what. A counter trend bounce? Something else? I think at least part of that was Carl Icahn and Street whispers of his involvement, I never had a chance to check his  10-Q filings to see if he had a quarter in which the SEC allowed him to not declare his position in AAPL as they will sometimes allow if it will have a material impact on the position being put together, Warren Buffet did the same with IBM. The point being, he may have been involved through that entire period or just the end part before the run up.

That area labelled "A" would be stage 1/base, and in red a stage 3 top, s smaller cycle, but still a cycle so the next should be stage 4 decline and that's why I'd be looking for an entry in to a core short position or trending short on a bounce in AAPL.

 I see AAPL is moving now as we had some decent divergences early today.

In any case this is MSFT during it's momentum /growth phase, AAPL was far from the first as MSFT put in a gain of 24,190% from 1987 to 1999, then it kind of turned in to a range stock and one of the things that seems to have changed the story there was the declaration of a dividend such as AAPL recently did.

 MSFT is more or less a dividend stock, from 2000 to present we have about a 4% gain, of course that's subjective according to where you start, but there's no arguing the character of MSFT changed forever and I think AAPL is heading down that same road.

Here's AAPL from 1987 to 2012 with a 7282% gain. I think the short is worth trading, but I would suspect after a few years AAPL will be another MSFT.

I'll let you know if I see the kind of intraday divergences that would cause me to add or open a new or additional AAPL position.