Friday’s powerful rally should encourage bulls — but not too much, since the very bearish, 132.90 target shown in the inset is still well in play. (This Hidden Pivot differs somewhat from the 133.38 objective given here earlier.) One thing to notice is that a rally to 152.75, the green line, would trip an appealing signal to initiate a mechanical short, stop 159.37. Stay tuned to the chat room for further guidance in real time, since it may be possible to get short using puts. We seldom use options when executing mechanical trades, but we will if the opportunity looks exceptional. _______ UPDATE (Jan 9, 5:36 p.m. ET): There were no good hooks for buying puts, so we’ll paper-trade this one. As noted above, a print at 159.37 would stop out the short trade. I have no strong gut feeling either way. ______ UPDATE (Jan 12): A week’s worth of of grunting and groaning failed to fill the 12-point gap left by AAPL’s sensational dive on January 3. The mechanical short is still ‘live’, and although we passed up the opportunity, it will continue to inflect our trades with a bearish bias until such time as the trade is stopped out. Since I mentioned this in The Morning Line, let me make it semi-official by repeating it here: A drop below $100 is no longer unthinkable. Alternatively, AAPL would need to pop above 157.20 to put bears back on their heels. _______ UPDATE (Jan 17, 10:30 p.m.): Since this rally stinks of distribution, let’s not go too easy on bulls. I’m raising the threshold to 162.12 from 157.20 to signal a bullish breakout. Here’s a fresh chart that shows why. _______ UPDATE (Jan 22, 10:58 p.m.): The strong rally of the last two weeks has so far fallen shy of taking out a key ‘external’ peak at 159.36 recorded on New Year’s Eve. Today’s selloff has made this task even more daunting, although AAPL would need to fall below 150 to put a 130.79 target back in play. For now, we’ll keep the chart alert at 162.12 to tell us when bulls get serious._______ UPDATE (Jan 24, 6:32 p.m.): DaBoyz are having trouble creating the illusion that there are buyers around. Any of three bounces from the ‘counterintuitive’ lows show in this chart could have produced a $3 rally, and yet none did. This is not quite ominous, but neither is it very encouraging.
