On Friday the NAZ and S&P closed down while the DOW closed up. The DOW reached the upper trend line of a channel per the following highs 12/31/13, 7/16/14. The lower trend line is derived from the ~2/5/14 and 8/7/14 session lows. The NAZ shares a similar pattern where prices have neared the upper channel trend-line, while the S&P has fallen short of reaching its respective upper boundary. Though the indices may hint of a sell-off (Candlestick, Volume, RSI, etc.) they are currently maintaining a strong uptrend however provided that the channel formation is valid a correction targeting the lower boundaries may be imminent.
Contra trend purchase @ 3.06 with a tight stop... possible double bottom vs. ~ 5/30/14 lows ~ $3... A break here will likely target the 10/24/2008 low @ 2.22... looking for a short term bounce.
Make or break? The DOW is sitting directly on an uptrend line per the following lows: 2/5/14, 8/7/14. The NAZ as well per: 11/16/12, 4/18/13, 6/24/13, 4/15/14, etc... the SPX however has broken it's uptrend line per: 11/16/12, 10/9/13, 2/4/14, 8/7/14, lows. As everyone should know, all indices are currently trading above their respective 200 day SMA's however if the majority of the aforementioned uptrend lines cannot hold, it's likely the 200 d SMA's will be the next target. Market's are churning now likely indicating the answer is near.
Amending the SPX uptrend line per: 6/24/13, 10/10/13, 2/3/14, 10/2/14.... As a consequence, all three indices are now priced directly on their respective uptrend lines. It would seem the US equity markets are at an important juncture.
An indice close near the lows on Friday may foretell further selling or more. If a low close should unfold at weeks end, the US equity markets might appear to be in a pattern similar to 10/16/1987, 10/19/1987, 10/20/1987 and 10/25/1929, 10/28/1929, 10/30/1929. Please note, this comment is not a prediction but an opinion. As stated in previous messages, the US equity markets are at a juncture that can resolve to either direction however the recent increase in volatility may be an indication that a resolution of significant magnitude is near. JMHO...
SPX Wednesday 10/14/1987 O: 305.22 H: 314.52 L: 304.78, Thursday 10/15/1987 O: 298.08 H: 298.91 L: 298.07 Friday 10/16/1987 O: 282.69 H: 298.91 C: 282.69 - Friday's close on 10/16/1987 marked an official break of the 200 dSMA, in addition (per my records) an exact open and close occurred that day at a price level of 282.69 consequently forming a long legged doji candlestick pattern. Today's US equity markets may be poised for a similar waterfall event however will require a closing price well beneath the 200 dSMA at the end of todays trading session. If this occurs you will likely see a significant follow-through early next week. JMHO.
Note, the DIA closed at the intra-day lows and slightly below it's respective 200 dSMA. Bullish or bearish news could temporarily affect US equity markets however any residual impact would most certainly be short lived as the natural cycle of the stock market is virtually unstoppable. As indicated in the previously and per earlier posts: Todays close near the intra-day lows and sub 200 dSMA does not bode well for the bulls going into next week.
Possibly, but in the near term the markets have a lot to prove. Per Friday's close, the S&P, NAZ, and DJX officially broke their respective uptrend lines and are now trading at/slightly beneath their respective 200 d SMA's. A significant break of the 200 d SMA next week will likely lead the markets into a full blown correction that should initially target a longer term uptrend line which began in 2009. For the S&P this price target would be ~ 1650 or approximately an 18% decline. Not too long ago, the markets tested this particular trend-line during the 3rd (early 4th) quarter of 2011 in which case the official break of the 200 dSMA occurred on ~ 8/2/2011 and within 12 trading sessions the indices quickly dropped 16-18% from their recent high's in July 2011. This rapid decline/correction preceded the actual trend-line touch that occurred on ~ 10/4/2011. Increased volatility in recent trading sessions may be an indication that a "substantial move to either direction" is forthcoming.
It appears the waterfall decline similar to 87' has been averted since today's open should have been a major gap down followed by significant selling pressure. Though US equities appear to have found some support at/near the 200 d SMA, they're not out of the woods yet. Will carefully monitor today's official close and the near term trading signals.
It would appear that US equities will gap down at today's open, Wednesday October 15th 2014, however of greater importance will be the official close. As has been the case recently, a close at or near the lows will favor the bears going into tomorrows session.
I might agree as $75 is the gap fill of 4/23/14, a reasonable near term target secondary to the 200 dSMA @ ~ $87. During the current correction AAPL did not experience a pullback equal to the indice losses on a percentage basis. Though AAPL could make new highs such prices may be a blow-off top, short lived, and a potentially tremendous selling opportunity. Another scenario is that AAPL challenges the 50 dSMA @ ~$100 and subsequently reverses. The latter seems likely irrespective of news.
Though AAPL seems to defy gravity, today's high could be a double top per the 9-22-2014 session high of 103.74. In addition today's prices are only a few points above the 9-21-2012 highs ~ 100.72. Overt Bullish Sentiment can be an extremely bearish indicator. Over confidence can be financially devastating when trading.
Long puts per an initial legged position. Was long a call spread prior to the earnings announcement but took profits shortly after the news release during the following session since the stock had moved as anticipated, though I actually felt it would advance higher than it actually did. In addition during that same session I closed the short leg of a November debit put spread. Currently long NOV puts at a decent cost basis offset by the long call spread and short put trade profits. As a trader, with long term short bias, I may consider going long AAPL if a price break of the recent highs occurs as this trade action would likely trigger continued buy pressure via. short squeeze, similar to the high break and subsequent price action on ~4-28-14. JMHO.
Yes, it is nice... virtually all based on the purity of price realization... Long term AAPL maintains its uptrend, clearly. Good luck.
AAPL ended positive for the day however reversed course from its intra-day highs. If the US equity markets are in the process of a continued correction then the recent price descent was merely a pre-cursor of a significantly larger decline forthcoming (16-18%+ vs. ~8-10%). If this is the case AAPL will likely descend with it.