AAPL Charts

AAPL made a very parabolic move today which has supported the Q's due to AAPL's weight on the index. NASDAQ has a proprietary weighting schedule which you can access with a NASDAQ membership for $10k, however from past weighting schedules we know AAPL has held as much as 20% weight of the NASDAQ 100 which at the time was the same as the bottom 50 weighted stocks combined, meaning if you took those 50 stocks and added AAPL and created the NASDAQ 51, all 50 stocks could average a loss of 2% on the day, AAPL could have a gain of 3% on the day and the NASDAQ 51 would close UP 1% even though 50 of 51 stocks declined 2%.

I opened an August AAPL $99 Put position on a spec basis (half size) which I'd add to under the right circumstances, Trade Idea (Short term Options) AAPL Put

In any case, this is what AAPL looks like, the main concepts being the flat range which seems to be very boring trade, I compare this to the "Kids in the room next door being a little too quiet, you know they're up to something". The other concept is that of a strengthening 3C divegrence via "migration" through longer/stronger timeframes which is what AAPL is seeing. I suppose the 3rd concept would be that of Technical Analysis being used against technical traders and the "Head Fake", which if you haven't read, I'd encourage you to read my two articles , "Understanding the Head Fake Move" that are always linked at the top right side of the members' site.

 This is a leading negative divegrence on an intraday 1 min chart, this is where any new divegrence will start and with AAPL up 2.61% on the day, we are looking at new divergences.

Just a quick note on AAPL, I have posted MSFT when it was a huge growth stock story and then when everything changed and it became more of a blue chip with the growth period ending, MSFT was actually a bigger growth story than AAPL, but it seems once they declare a dividend, the growth ends and they get somewhat range bound, this is what I think lies ahead for AAPL.

If the divegrence is strong enough it migrates to longer timeframes which are stronger underlying trade, that happened today as this 2 min chart is leading negative, but it didn't stop there.

The 3 min chart went from in line to leading negative and ...

The 5 min chart which is the first timeframe I consider to reflect institutional activity on an intraday basis is also leading negative.

The only concern I have with adding to the AAPL put, even though this was a true parabolic move on weak guidance which is the only thing that really matters to Wall St (not what you did, but what you'll do), is the clear resistance range created today, the clearer it is and the more noticeable it is (in a very visible stock like AAPL) the higher the probability of a head fake move which would manifest in this case as a breakout above resistance as limit orders are stacking up just above resistance. Ultimately it's a head fake move because it fails and we try to confirm that as soon as possible as a breakout that is showing distribution is likely to be a head fake move and even with the charts we already have, we can estimate that it would likely be a head fake move, but it does open up demand which is important for funds that carry billion dollar positions as a routine position size, they need the demand to sell in to and I suspect AAPL is up today for that reason and that reason only after guiding lower yesterday on earnings.

I'll be setting some price alerts above the range, I want to enter puts on price strength (discounted) so that would likely be the only scenario in which I'd add to the speculative size position called out today.