The last AAPL update had a lot more to do with market makers getting their butts handed to them and our prediction of AAPL price movement based akmost soley on the fact that market makers were not going to take the losses they had to accept as AAPL lost significant ground on heavy volume and the market makers' responsibility topost a bid/ask in the stocks they make markets no matter what is happening so long as the order comes in at market. AAPL did what we expected and retraced those losses allowing market makers to get out of the losing inventory they had to take on with such a heavy volume sell off (which they can also do by accumulating at lower prices, selling at higher prices while dumping inventory taken on during the decline, yet at higher prices.
That update was Sept. 10th,
Full AAPL Update and I've been keeping close tabs on AAPL since. From the last paragraph of the linked post from 9/10/2014...
"As of right now the 2 and 3 min charts are leading at stronger positive divergences and the intraday is in line so I'd expect higher prices. When I start to see these deteriorate, AAPL should be ready for the next trade which I suspect will be a longer term position trade and on the short side."
You might have noticed AAPL's underperformance today while the NASDAQ COMP. and NDX lead the market, considering AAPL's significant weighting on the NDX, the outperformance probably has a lot to do with NASDAQ Biotechs.
In any case, this is a red flag on an asset I've been keeping tabs on. I suspect you could enter AAPL in this area and not be too far from a great entry or you could wait a bit longer as the market runs this corrective move and maybe get something a little better, maybe not or you could, which in my case and choice is the most appealing option, phase in to AAPL so long as your risk management reflects that plan BEFORE you enter the first share, this means leaving a wide enough stop and position size allowing for higher prices in a dollar cost averaging scheme, however not in the typical sense of the word in which you take on more risk than planned to try to get out of a losing position, this is very different and I'll enter a 50% AAPL equity short after this is posted.
This is AAPL in red vs both the NASDAQ 100 and the NASDAQ Composite today, the red trendline is yesterday's close for all 3, clearly AAPL is underperforming the Index in which it has the most weight on, actually at a loss of -1.02%.
AAPL's Ultimate Oscillator, using 2x the standard length of the normal indicator settings with averages set at 14/28 and 56 shows the negative divegrence in to AAPL's very volatile top area, the area I spoke of in market makers getting burned. You can see shortly after, AAPL did as we predicted and retraced those losses allowing market makers to unload losing inventory they took on at higher prices as a function of their legal obligation to be the buyer of last resort for the numerous privileges that come with making a market in a stock.
On a daily chart, yesterday's bullish engulfing pattern turned south today to a bearish Harami reversal, although I'd prefer to see volume increasing today by the close , but I doubt that happens.
The daily 3C chart shows the AAPL hedge fund panic and -45% / 8 month AAPL decline mentioned several times recently, a lot of hedgies lost a lot of money as they tried to fit out the same small door, selling while there was no demand, all because of Dan Loeb's positioning. It wasn't a difficult guess that Icahn and others knew these numerous funds would be looking to get square on the position and that's exactly what happened as AAPL retraced the -45% losses to form a double top, still bearish. See the last update linked above and the AAPL and MSFT growth story ending that both stocks share.
Also note the 3C trend during the making of the double top, exactly what you would expect to see as hedgies that took losses on AAPL would be selling at higher prices where they got in and couldn't get out as Institutional money has a much larger presence than retail's dwindling presence as well as their absolute lack of dry powder as they are maxed out on leverage and negative investor net worth, in other words, they don't have the capacity to take on anything that would move the market, their dry powder is spent which becomes an increasingly large problem for institutional money that has put in some 800 billion odd dollars since 2009 and doesn't have the buyers available to absorb those sales.
My Custom DeMark inspired Buy/Sell indicator gave a nice buy signal as well as some sell signals and a very large sell signal now in addition to...
My MACD Heat Map just fizzling out on the construction of the double top.
Interestingly the Trend Channel had a stop right at $98.12 (rounded to $98) on a closing basis, however the candle closest to the stop had a closing value of $98.12, which didn't break the Trend Channel, however there has been littl in the way of additional gains since and the Channel has only locked in another $.18 cents since.
If you want a more "Prove it first" entry, then you are looking for a close below $98.30, however I think we can bet a better short entry or blend the two concepts of forward forecasting and after the fact, objective proof.
The 60 min 3C shows the distribution going in to the massive high volume sell-off event that would have trapped market makers buying inventory at higher levels as market orders to sell on the way down were not likely to have a corresponding bidder making the market maker the buyer of last resort legally. Then the accumulation expected as market makers tried to extricate themselves from inventory bought at higher levels in which they had no choice. The entire downside move was retraced allowing market makers to unload the long inventory accumulated at higher levels as a result of their legal obligation.
We also have a negative divegrence now, it's not as sharp as I'd require for a full size short entry, but moving in the right direction.
The 15 min chart shows interesting divergences from accumulation and a near perfect trendline mark-up stage to distribution before the fall. The recent range which has been sloppy has seen overall distribution, it's just not as sharp on a 60 min chart as a 15 min chart... YET.
The 10 min chart verifies and adds some more color.
However on today's move higher in addition to underperformance, there's no AAPL positive divergence, in fact the opposite which should continue to migrate.
I believe AAPL is at a pretty decent area for a longer term trend short, I'll enter a half size position n hopes of maybe a little rotation (although today should be AAPL's day with the NASDAQ leading). In case there's not, at least I have some exposure to AAPL short.
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