AAPL Update, Another Head Fake Move...

Just to be clear, I think AAPL will hold out longer than most just as many large cap/blue chips did in 2007/2008, although they eventually lost ground, but not as much and this is because long only funds only have so many choices so they are engaged in a flight to quality / dividend trade. If you have nothing but bad choices, you try to make the least bad choice,

However since we have talked about this concept 3 times in the last 2-days, I figured AAPL, which I've been asked about by several members recently,, would make a good example to carry on the concept of the head fake move.

The more of these I see recently on the lift from Oct. 15th, the more I'm convinced this wasn't just about the broad damage in breadth, but also some areas set up for head fake moves that Wall St. could take advantage of, I mentioned a few yesterday including XLF/Financials.

 From left to right on the Daily chart of AAPL, we have an uptrend at #1 in to a consolidation/continuation price pattern, a symmetrical triangle which has no continuation bias other than the preceding trend which was up so technical traders are looking for a break out to the upside as the triangle's apex forms. At #3 we see the opposite of what they expect to see with a break below the triangle/support, remember what the TA rules are, "If a trade goes against you, reverse positions ) and in this case go short which would have been a big mistake as they'd be chasing price and easily stopped out on a reversal to the upside probably with a fair amount of risk with stops inside the triangle. Once again, another failed move which would suggest going long and AAPL finally breaks out as the price pattern suggests,  however the first head fake break lower created the upside momentum for the upside breakout via short sellers being squeezed and forced to cover, in the process soaking up supply and creating demand which moves prices higher and thus you have a sling shot momentum, head fake move.

 The longer/intermediate term 30 min 3C chart shows the distribution/accumulation that forms the triangle whether purposefully or not and then clear distribution sending prices below the triangle.

Note there's not any accumulation on the break below, they don't need it as the short covering will lift prices for them without having to invest much in soaking up supply.

The shorter term , more detailed 15 min chart shows some accumulation after the break below the triangle, these are the piggy back longs we often take even if the bigger trade is to short AAPL in to price strength.

 And as AAPL makes the upside breakout, distribution or selling short in to price strength has already begun.

 The more detailed 3 min chart shows it more clearly.

As does the 2 min. I think there are better trades out there, but if AAPL stays in the area and I can't say it will and continues to distribute until we have 15 min negatives, then it's probably worth considering as a put/short trade.

However, the head fake concept should be very clear as we have seen 3 in as many days that are exactly alike.