My short-term-bearish outlook is more evolved in AAPL than in the E-Mini S&Ps, since the stock already triggered the prospective short noted in the tout for the latter. The trade would have finished the week $2.48 in the red, but I am not advising getting into it belatedly in any event -- at a better price, as it were. It would take but a 1.6% rally to achieve new record-highs, and there is no compelling technical rationale for betting against this. The next attractive buying opportunity based on the chart would come at p=184.60, a midpoint support that we can bottom-fish with an rABC pattern on the 15- or 5-minute chart.
Following a relentless short-squeeze rally over the last month, AAPL has receded moderately so far from within 43 cents of the 193.36 Hidden Pivot we were using as a minimum upside projection for the bull market. The pullback did not quite reach the green line (x=188.76) on Friday, so there is as yet no theoretical sell signal. This seems likely to occur as the new week begins, and we can use p=184.60 thereafter as a minimum downside target. It can be bought with a reverse pattern trigger when the time comes, but our trading bias should be bearish in the meantime. Were AAPL to head-fake above last week's 192.93 high, I'd suggest using a voodoo number at 194.11 to get short. Tune to the chat room and keep your email 'Notifications' turned on if you want to stay apprised.
The pocket of supply into which AAPL climbed last week could pose a challenge, since the stock's rise since October has not shown quite the power of Microsoft's. I offered a possible explanation for this in a previous tout: The coming recession will hit iPhone sales much harder than Microsoft's software services. In any event, you can use the 193.36 target of the pattern shown to project a minimum upside target for the coming week. Because everyone is bullish and expects this, watch for the move to occur in such a way that it is untradable -- on a Sunday night gap, perhaps.
AAPL was rising steeply as the week ended, but I've gone out on a limb with a chart that dwells on bearish possibilities just ahead. Unlike MSFT, whose vertical rally left it at new record-highs, AAPL would need to push past two daunting 'external' peaks to get there. AAPL's closing high also equaled a voodoo number that would make a logical spot for a correction to start. It would trigger a short at 182.23, assuming the stock does not take out last week's 186.40 high first. Thereupon, p=178.07 would be our minimum downside objective, where half of any shorts, including with options, would be covered. _______ UPDATE (Nov 14, 7:57 p.m.): A new high at 188.11 has raised the trigger on the short to 183.94, with half to be covered at p=179.78.
The stock's handlers, undisputed geniuses of the Einsteinian buy-and-hold strategy, did so well keeping AAPL aloft last week that we should assume they can keep this short squeeze going for at least another week or two. They did after all trick investors into stupidly shrugging off the implosion of iPhone sales in China, a remarkable obfuscation that demands our respect. Accordingly, I'll suggest using a voodoo number at 186 as our minimum upside target for the next two weeks. The stock will first need to fake its way above the 182.34 'external' peak recorded on October 12, but that is hardly an insurmountable problem for world-class thimble-riggers who have mastered the art of producing volumeless leaps whenever they need a big rally and there are few actual buyers around.
A 146.13 target is the most pessimistic I've identified to date, but in the interim we should use the 159.98 Hidden Pivot support shown in the chart as a minimum projection. An $8 rally to the green line (x=176.75) would likely be construed by many if not most investors as a bullish resurgence, but we should see it first as an opportunity to get short there 'mechanically'. Alternatively, we'll try bottom-fishing with call options if AAPL continues along its tortuous path lower.
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.
