Since June AAPL has been forming a topping pattern (H&S) and looks like it is ready to start moving lower again. The left shoulder, head and right shoulder being formed are symmetrical in time and price. The right shoulder started with the September CPI report (released in October) and was reinvigorated by the October CPI report released in November both of which created mass short covering. Neither of these reports actually matter to AAPL and its failing chart structure. The reports were excuses to use this time to levitate stocks in order to distribute more stock at higher prices before AAPL and the market take another leg down. Charts of the indexes and its underlying components are all stretched and looking tired. Seasonal factors aside, the market needs a rest and AAPL's right shoulder is currently setting up for a move down to the neckline that will bring everything with it. Short of the Fed coming out and saying we are done and they are not, there is nothing left to push AAPL or the markets up. We have a rising wedge pattern that has hit resistance from four different descending trendiness and is up at lofty levels with no volume and bumping its head against the 150 day line with a descending 200 day line just above and declining RSI and volume. Some stocks have risen 60% in October and the Dow is only down 7% for the year rising 5000 points in less than 6 weeks. Semis were up 37.5% in 23 trading days. This is not sustainable in any form. What is left to buy with energy rolling over and healthcare extended all year?
The Neckline represents the .382 Fib level from the Covid bottom ($53) to AAPL's peak($183). That's $130 in gain during that time. To this day AAPL has only given up $30 of that gain. Let's compare that with MSFT which was the second largest company at the beginning of the year and at one point neck and neck with AAPL before its ascent to $183. MSFT was a $350 stock and traded under $214 two weeks ago which represented the golden pocket retracement (.618-.65) before its relief rally off the CPI reports brought it back to a 50% retracement and down $110 from its high and over 30% on the year at 240. Meanwhile AAPL only bounced off the .382 retirement at 135 as a result of the CPI reports up 11% and is down only 17% on the year.
Market feels heavy to me. A lot of capital flooded into the markets on short covering and FOMO. Fed speak last week was undeniably hawkish and the US economy seems destined for some sort of recession. None of these things seem to intimate the signs of a new bull market to me. If the snow storm that hit this weekend is any sign of things to come, the market is about to encounter some trouble of its own. Happy Trading!
The Neckline represents the .382 Fib level from the Covid bottom ($53) to AAPL's peak($183). That's $130 in gain during that time. To this day AAPL has only given up $30 of that gain. Let's compare that with MSFT which was the second largest company at the beginning of the year and at one point neck and neck with AAPL before its ascent to $183. MSFT was a $350 stock and traded under $214 two weeks ago which represented the golden pocket retracement (.618-.65) before its relief rally off the CPI reports brought it back to a 50% retracement and down $110 from its high and over 30% on the year at 240. Meanwhile AAPL only bounced off the .382 retirement at 135 as a result of the CPI reports up 11% and is down only 17% on the year.
Market feels heavy to me. A lot of capital flooded into the markets on short covering and FOMO. Fed speak last week was undeniably hawkish and the US economy seems destined for some sort of recession. None of these things seem to intimate the signs of a new bull market to me. If the snow storm that hit this weekend is any sign of things to come, the market is about to encounter some trouble of its own. Happy Trading!
Comment:
Fed Minutes are not new news. With all the Fed speak last week and the pricing of future rates, this is yet another excuse to keep the market elevated to distribute shares at higher prices. VIX trading 20.79 as of this writing. Risk of a volatility event is rising.
Comment:
J Powell gave institutions another oppty to unload shares at higher prices. Nothing has changed with AAPL's chart structure. Distribution at its finest.
Comment:
AAPL playing out as expected. Two months of institutional selling at higher prices with those favorable CPi and PPI reports finally gave way to reality that the economy is getting weaker. AAPL hovering precariously at a trendline that has been in place since Sep 2020. This line has been tested a few times. I suspect if not tomorrow sometime next week this will give way. Next support 133 and then the June lows at 129.