Although AAPL ended the week in the same precarious place as the E-Mini S&Ps, we shouldn't forget that it wears a wing suit for such occasions. The stock's institutional sponsors let it fall only when it suits their needs -- in this case a presumptive eagerness to load up at p2=159.25, nearly $14 below the current price. They've had more than two months to distribute Apple shares in preparation for this maneuver, so let's not feel sorry for them if their holdings deflate precipitously for a little while. The speed at which the stock falls will tell us how successfully they've been and how eager they are to run the stock back up to some insane height. The news backdrop features a nasty decline in iPhone sales in China, one reason we can be confident the bear market begun in mid-July from 198.11 will eventually find its way down to at least 146.13.
I've altered the picture somewhat to produce an uglier but still logical downside target at 146.25. That's $38 below the one at 164.90 given here previously, and there is compelling clarity to support it, including the precise bounce from the red line, p=172.24. The pattern has already produced a $13 winner from a 'mechanical' short at the green line and would likely produce another if this remarkably vicious short-squeeze can get there. I say 'remarkably' because AAPL swam perversely against the tide for most of last week. Stay tuned to the chat room and your email 'Notifications' for tradeable guidance, keeping the 100-bagger from puts bought a few weeks ago in mind.
AAPL's handlers milked Friday's cluelessness for all it was worth, which turned out to be not much. The rally got past the first of three tightly spaced 'external' peaks going back to early September, meaning the move is not yet impulsive on the daily chart. A print at 180.31 would do the trick, but we should remain skeptical until such time as that happens. If the rally hits x-183.67, that would trigger a 'mechanical's short, stop 189.99, but we'll cross that bridge when we get to it. _______ UPDATE (Oct 12, 8:42 p.m.): If this vicious short squeeze hits x=183.67 tomorrow it will likely be the rally's last gasp, and we'll want to short it. Stay tuned to the chat room and be prepared for guidance via email toward day's end, since getting a good price on put options could be tricky.
Although AAPL's fall to the 164.90 target (see inset) was all but ordained two months ago when hard selling crashed the midpoint support at 181.57, the stock's handlers have made it an ordeal for bears to profit easily. Shorting 'mechanically' on the squeeze up to 189.90 worked well, and I expect bottom-fishing at 164.90 to be a money-maker too, since the pattern is not very obvious. The rally would have the potential to hit 182, but I'll suggest using a trigger interval of $1.50 to get long. If you are unsure about how to do this, ask in the chat room for guidance when appropriate.
It has taken the stock two weeks to return to lows where we cashed out of puts for as much as a hundred times what we'd paid for them a week earlier. The trade came off an appealing 'mechanical' sell signal generated by the pattern shown, and there is no reason why this pattern cannot continue to work for us. For starters, that means we can expect more slippage to at least p2=159.95 once the midpoint Hidden Pivot at 172.24 gives way. This looks unavoidable, although I don't expect the dirtballs who manipulate AAPL for a living to go quietly into the night. The 164.90 downside target given here earlier remains viable and can be bottom-fished with a reverse pattern trigger interval of 4.50 points. Ask for guidance in the chat room when appropriate if you're unsure about how to whittle this down to a reasonable number.
AAPL's big bounce in August may have added tens of billions of dollars to the macro ledger for a short while, but September's symmetrical decline has taken it all back. The stock still appears bound for D=164.90 of the pattern shown, equating to a 17% decline from the 198.23 high recorded in early July. Since Apple shares have been an infallible bellwether for the stock market as a whole, we'll want to pay close attention to price action when 164.90 is hit, which it eventually will be. If the Hidden Pivot support is decisively exceeded, it would imply more downside is possible to as low as 146.25, a Hidden Pivot support derived from shifting 'A' up to last August's 176.15 peak.
Bulls appeared tapped out as the week ended, unable to fill the gap formed by Thursday's air pocket. To make matters worse, the stock settled just beneath the lower end of the gap range, implying the DaBoyz couldn't even mau-mau shorts into displaying a little fear. This will be problematic when index futures begin to trade Sunday evening, since the broad averages weren't exactly looking frisky either. Expect more slippage to the 164.90 target of the reverse pattern shown. Getting short is certain to be tricky, since everyone else will be trying to do it too.
Officially we are short from near 189.90 via the purchase of four Sep 8 180 puts for 0.12. This is a 'mechanical' trade, and although the green line (x=189.90) is neither a target nor a resistance, it is where most trades of this kind are signaled. The fact that the rally topped two cents from the target is mere coincidence, even if it may have felt like we got the trade exactly right. If time erodes our puts to the vanishing point by mid-week, we may try again. Regardless, you should be offering half of the puts to close for twice what you paid for them. _______ UPDATE (Sep 6, 2:40 p.m.): Today's so-far quadrupling-or-better of AAPL 180 puts extends a Rick's Picks winning streak that stretches back beyond memory for option trades posted either as touts or as spontaneous 'berries' in the chat room. Anyone who bought the puts for 0.09 to 0.12 on last week's guidance should be out of half to three quarters of the position by now. Save a few for Friday, since the explosion of these still-out-of-the-money options has spooked the clowns who are short them. Even if they did so as part of a hedge, they would still be in trouble due to the deadly negative-gamma exposure of options that only yesterday were $10 out of the money. Here's the chart, so lovely and gratifying. _______ UPDATE (Sep 7, 2:16 p.m.): Nailing the 189.90 top of AAPL's hellish plunge within two pennies, and timing it nearly perfectly, produced quick gains of as much as 10,000 percent on puts that could have been acquired for as little as 0.06 just a couple of days ago. They traded as high as $6.60 today in panic selling that deepened the already-punitive losses from a day earlier. Many subscribers apparently
I've shrunk the picture somewhat with a truncated a-b leg that projects a tradeable low at 164.90, well above the 146.25 target presented here last week. However, if AAPL should eventually relapse and close below last week's 171.96 low for two consecutive days, it would shorten the odds that the more bearish target will be reached. In the meantime, the best opportunity I could foresee for the next two weeks would be 'mechanically' shorting a run-up to x=189.90. Otherwise, AAPL still looks like a good bet to fall to at least 164.90 eventually, so our mid-term trading bias should remain bearish.
Expect AAPL's correction to continue down to the red line at 172.24, at least. That's a major Hidden Pivot support of weekly-chart degree. If and when it is reached, the correction from July's all-time high at 198.23 would be about 13%%. Earlier, I predicted that pullbacks in this stock and some others in the institutionally beloved 'lunatic sector' would ultimately reach their respective 'D' targets roughly 27% below. I'm holding to that prediction for now but it could change depending on how bulls and bears fare when they duke it out at p=172.24. And they will. Bottom-fishing there can be attempted using a reverse pattern with a trigger interval of 2.90. Stay tuned to the chat room if you care, since I may be able to hone this guidance in real time as the stock gets closer. My confidence in the pattern to deliver everything we require is high. ______ UPDATE (Aug 18): A two-day selloff brought AAPL down to within an inch of the 172.24 target billboarded above. The subsequent, strong bounce hit 175.10, triggering the trade I'd recommended at 174.86. If you bought stock or used options to get aboard, please let me know so that I can determine whether to establish a tracking position. I don't expect the rally to get very far, so tight risk management could be crucial to booking a profit. _______ UPDATE (Aug 22, 5:56 p.m.): AAPL swam against the tide today, but I doubt the stock can keep it up for long. That's why I suggested covering at least half of any long positions held from 174.86. One subscriber reported booking a $2,600 profit on exiting his entire position, and so I will end my guidance here unless there are additional reports. A run-up to x=185.24 would tempt us with a juicy 'mechanical'
