Is Apple bad medicine for a rising stock market?

Weekly Report: MAAD and CPFL Indicator Analysis

So can this bull trend that has been underway for nearly four years, in the face of increasingly lackluster indicator performance relative to higher pricing, have the power to overcome major resistance made in October 2007 when the S&P closed at its highest level (1565.15) on October 9, 2007 and its highest intraday level (1576.09) on October 11, 2007, levels that are a little under 4% from current S&P bids?

To answer the question, let’s wander back to Apple. AAPL made a long-term low at 78.14 in January 2009. Its price rallied to 705.07 on September 21, 2012 and that Major Cycle advance was virtually uninterrupted in terms of the lower edge of Apple’s 10-month Price Channel for nearly four years. But then the week of October 12, 2012 AAPL sank below the lower edge of its 10-Week Price Channel at 629 and then the lower edge of its 10-month Price Channel at 508 on December 31 to confirm a negative reversal of the uptrend begun in January 2009. What could be even more disconcerting for those still holding AAPL, if they knew, is that Cumulative Volume in the stock is currently plotted at a level equivalent to an AAPL price of 205.and nearly 250 points below current bids. Unfortunately, many probably continued to hold AAPL because the broad market was still rising. Bad bet.

Daily S & P 500 Emini Futures contract with Cumulative Volume (CV)

cumulative volume

Weekly S & P 500 Emini Futures contract with Cumulative Volume (CV)

cumulative, volume

What was the dead giveaway that AAPL could be in for some tough sledding after it reached that high at $705.07? Momentum did not confirm the new high, nor did Cumulative Volume. Both peaked back in April 2012 when AAPL hit 644. That was the statistical high and thereafter gains into the eventual peak in September 2012 were fueled by weaker hands. Sound familiar? Bottom line in AAPL? The points at which AAPL reversed its long-term trend were the points at which the “EXIT” flags were flying big time. Unfortunately, many folks did not see those flags and will continue to hold AAPL all the way down to whatever low it finally hits. Simply put, the long-term status of AAPL has switched from one of Buy and Hold to one of Sell on strength.

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

2/4

2/5

2/6

2/7

2/8

2/8

2/28

S&P 500 Index

SELL 1485.71

SELL 1489.05

SELL 1492.17

SELL 1494.02

SELL 1495.59

SELL 1395.00

SELL 1330.62

Dow Jones Industrials

SELL 13702.83

SELL 13749.07

SELL 13790.75

SELL 13817.61

SELL 13837.35

SELL 12903.12

SELL 12570.95

NASDAQ Composite

SELL 3130.09

SELL 3132.01

SELL 3133.89

SELL 3135.18

SELL 3137.22

SELL 2941.35

SELL 2862.45

Value Line Index

SELL 3339.86

SELL 3349.75

SELL 3355.06

SELL 3358.91

SELL 3364.69

SELL 3411.65

SELL 2817.27

Note: Stop levels, a function of the extant trend, are based on the trailing moving average price channels for the Highs or the Lows of an index. Whether or not a specific index is suggesting a “Buy” or Sell” is determined by whether or not index prices are above or below the current channel Stop levels. Stop levels should only be used as an entry or exit guide and in conjunction with other market entry and exit strategies.

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