Apple Poised For a Big Move $AAPL
I have been watching Apple Inc. ( $AAPL ) form a symmetrical triangle for the past two months. This is a Continuation Pattern, which means that the triangle is used as a way to head higher if the trend has been upwards and with AAPL it has been.
A symmetrical triangle is generally regarded as a period of consolidation before the price moves beyond one of the identified trendlines.The sharp price movement that often follows a breakout of this formation can be captured by traders who are able to identify the pattern early enough.
The Symmetrical triangle pattern needs to have a few things working for it and we will check them off here.
1. Trend Should be at least a few months old: Check !AAPL is from march to december.
2. Duration of pattern should be at least 3 weeks old: Check! This pattern is 6 weeks old.
3. Breakout occurs between 1/2 to 3/4 of the way through the pattern: Check! It's about 3/4 of the way.
So now that we checked a few major points off let's look at a price target. We take the distance from the widest end of the triangle and in this case is around $20.
From the breakout at around $200, this being a bullish trend apple has been in we add $20 to the upside and put it at ~$220 for a potential breakout target.
There are a few hurdles here for AAPL though the $207-208 area is major resistance so if it can break that $220 is well in sight.
I bought a January $230 Call option at 0.23 to prepare for the move instead of putting major capital in the stock
Here is the chart (Click to Enlarge)
Update: I tried posting it last night but my host was down so i gave up. $AAPL is currently at ~$207.50 (in between the resistance I mentioned)
I have also sold my Call options for a hefty 140% Profit from yesterday's buy-in price, if Apple breaks above 208 I might be re-buying some.
Merry Christmas!!
TED Target reached: Increasing short positions.
Here we go again.
On September 28 I stated the following:
The TED Spread which measures the general risk in the economy has been rising the last couple of weeks. today alone it rose 5.42% which means interbank loans are now riskier. This is still not significant enough and I would like to see another 33% increase in the TED before I really put a lot of my sidelined money on the short side.
On the 28th TED was at around 0.195 so a 33% move would put the TED at around 0.26 and today TED closed at 0.262 which satisfies my reasoning for going short.
On October 27th TED was in an Ascending Channel and also stated that a higher TED spread would mean that a major market correction is underway as banks are raising loan rates between eachother. Rising rates means there will be some major trouble in at least the financial sector which allocates 15% of the S&P Index.
Here is the latest Chart of the TED showing the channel that has been broken. (Click To Enlarge)
Another Blogger has picked up on the TED and here is Daneric's TED Chart.
Finally keep in mind that the current TED is still far below the average TED which is at around 0.50 (50 basis points). We're halfway there and its good to catch onto this risk indicator before CNBC does.
I will add shorts via options and inverse ETF's very soon but always use my opinions as a viewpoint and not investment advice. Everyone has different risk tolerances.
Happy Trading, K
Volatility Index $VIX Is moving higher.
On Friday The VIX went up 23.95% while the market fell well over 2.5%.
VIX is a popular measure of the implied volatility of S&P 500 index options. Often referred to as the fear index, it represents one measure of the market's expectation of volatility over the next 30 day period.
With the upward movement in the past 2 weeks the VIX has successfully broken a trend line going back to November 2008
See Attached Image (Click To Enlarge)
The VIX also had a bullish candlestick pattern on the 2D frame (2 days per candlestick)
Defeniton of this candlestick pattern is quoted below from Candlesticker:
Bullish Three White Soldiers Pattern is indicative of a strong reversal in the market. It is characterized by three long candlesticks stepping upward like a staircase.
The following are two charts; one showing the Three White Soldiers pattern on the 2D chart the other showing it on the hourly.
2Day Chart (Click To Enlarge)
And finally the Hourly chart (Click to Enlarge)
What does the bullish Vix momentum mean? Well by itself it means nothing to me. But when combining it with the increasing TED Spread, Broken S&P trendline, Numerous bank failings each weekend and many more indicators then it all signals that things are not well and the jobless recovery is not going to last much longer.
As always use caution as these are my observations and I do not make decisions for anyone other than myself.
Happy Halloween! 
-K
$SPX Psychotic Line Resistance
It was a fun day today.
Market opened up and rallied 10 points by 10:45AM. It was all downhill from there but the big kicker came at 3:10-4PM when the market dropped 17 points.
I will let 2 charts and this link be the hint of what I think we are going to do in the next few days at least.
Chart 1 is a closeup of the past month with the trend lines drawn almost a month in advance. (Click to enlarge)
Chart 2 is a zoomed out view from where the rally began. (Click to enlarge)
That's all folks. These are the charts promised almost a week earlier.
Have a safe investing season this fall/winter it should be epic.
-K
Downhill from here Or more upside?
The SPY made a hanging man candle today and so did a few other stocks like C (reporting tomorrow before open)
It happened on a bullish trend so it is defenetly a bad sign.
It is late but I will update tomorrow with more writing and of course my favorite thing; charts!
-K
$SPX Stuck in a 9 point range..Which way will it Break?
The S&P 500 index is stuck in a 9 point price box.
1051 is resistance from October 2008.
1042 is support from the last 3 days and also the 18SMA.
We need to see 2 or more days of market closing either above or below one of these 2 points before there is any significant breakout or breakdown.
For the moment we have a setup for almost a Kicker Bullish setup but the 3rd red candle that was put in on Friday doesn't make this a perfect pattern.
If on Monday we follow the Kicker setup, we might have a move to higher highs (above 1080).
The setup is not exactly a Kicker but it fits the bill very well. If $SPX closes below 1042 for 2 or more days then next support is 1030 which would be the defining moment of this "Bull Market".
Here is the attached Daily and Hourly chart (Click to Enlarge)
Look for an update by next weekend if the setup plays out.
-K
The last leg of my August 27th prediction.
Well one last time revisiting my latest predictions since august 27th.
Checklist:
Fake Correction? Check (August 27-Sept 2nd)
Mini Recovery? Check (Sept 3rd to Sept 11th)
Major Correction? In Progress (Sept 14th to ... )
Check the attached Updated chart. (Click To Enlarge)
The Orange Line Scenario Happened for the most part except the fakeout below a trend line (circled above)
From the Sept 1 Blogpost:
Scenario 1: (Orange Lines) Bounce back the next 5 days to reach possible 1040 then drop back to 1000’s and head lower going into October.
I am 2/3 so far looking for a full 100% return on my prediction.
Have a good one.
-K
Mini Correction, Mini Recovery Then Massive Correction?
As I posted a while back, (See the "Fake Correction Followed By Fake Rally?" article if you missed it) the $SPX (The S&P 500 Index) has nicely corrected to satisfy me that there will be another move up 20-40 points to shake off more bears and when they are nearly all out (If market makes a higher high it will be seen as very bullish) it will have a massive correction to trap bulls and make bears cry for getting out too quickly.
I will be revisiting the charts I drew in the previous article mentioned above. Let's start with the closer look in the past 3 days.
I was waiting for the SPX to break either the red or the green line and close below it. Well yesterday it did just that and that was the first clue as to where we were heading today.
The blue arrows are there to just demonstrate the Support line and where yesterday's close was. Grey line was my prediction for the next 2 weeks or so but it was defied by the market as it tanked lower and lower. (Click to Enlarge)
Second chart is the long term view of things and 2 possible outcomes that this investing freak sees realistic.
Scenario 1: (Orange Lines) Bounce back the next 5 days to reach possible 1040 (ADP Nonfarm Employment change tomorrow morning so this could happen if it "surprises") then drop back to 1000's and head lower going into October.
Scenario 2: (Green Lines) Go down further for the next day or to and reach 985-990 for a close (it could go down further and still close above 985 to be valid). Then hit ~1020 shake a few shorts that believe 1000 level has cracked and proceed into 950's.
Scenario 3: That's your opinion and I would like to know
Here comes the updated chart. (Click to Enlarge)
Good luck! and don't forget to follow me on:
Twitter ( http://twitter.com/investingfreak ) or Stocktwits ( http://www.stocktwits.com/u/investingfreak )
For the latest live commentary.
-K
Fake correction followed by a fake rally?
The past 4 days The S&P and many other markets have traded within a very narrow range.
There have been doji candles galore. trendlines, averages, bullishness ratios and even the Elliot Wave expert said rally is ending and a correction will come sooner or later that will surpass the march low.
I have taken the liberty to put up a few $SPX charts with possible short term outcomes.
The big picture is in the first image (Click to Enlarge)
I am looking for the S&P to go to 1010 to lure in bears and then bounce off the trendline and make a higher high to fool the bulls and shake the bears. Then lastly (not in these pictures) I am looking at 950's as a conservative bet.
Here is a closer look short term view. Upside target is 1040-1050.
I hope you enjoy my opinion and feel free to comment your own.
-K
Shooting Stars are everywhere. Is it time to turn into a growling Bear?
I noticed something strange today looking at my favorite timeframe. (half a day )
Stars were shooting everywhere.
Many symbols like $SPX $SPY $INDU $OEX $COMPX $QQQQ etc had the shooting star pattern to an extent.
I chose to include only 3 to keep it simple
Now before I insert the image I would like to explain what a shooting star pattern is thanks to Stockcharts.com
Shooting Star: A single day pattern that can appear in an uptrend. It opens higher, trades much higher, then closes near its open. It looks just like the Inverted Hammer except that it is bearish.
Here is a visual aid to go with the definition. (Click To Enlarge)
Now bear in mind this is my own opinion of what I see happening. My system has yet to give a sell signal but today I did receive a sell in GLD so if gold is losing value that means market is going down (most times that's the correlation I've seen.)
Now listen up you Goldman Sachs! Stop reading my blog and proving me wrong. Let the market go down like it wants to.
Thank you very much.
-K
8-20-2009.. another repeat of 7-13-2009 ?
If you have been following my current picks page you might have noticed that most of the symbols received buy signals on 7-13-2009 which is when the March rally was coming to a correction but then bounced. Will we have another case of this with 8-20-2009?
I was hoping we wouldn't that is why I posted those charts yesterday thinking we had topped. Well my automated strategy was saying otherwise and I completely Ignored it.
Normally I would just update the current picks page but this time around I have decided to make a blog post.
----------
Market Indices and other important Quotes
(Note: I understand you can’t purchase an index so bear with me these are just signals)
|
Symbol |
Buy Date |
Sell Date |
|
$SPX |
8-20-2009 |
|
|
$INDU |
8-20-2009 |
|
|
$COMPX |
8-20-2009 |
|
|
QQQQ |
8-20-2009 |
|
|
IWM |
8-20-2009 |
|
|
SPY |
8-20-2009 |
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Rest of the Symbols (More will be added per request)
|
Symbol |
Buy Date |
Sell Date |
|
IYR |
8-21-2009 |
|
|
AAPL |
8-20-2009 |
|
|
DRYS |
8-14-2009 |
|
|
SDS |
8-20-2009 |
|
|
SRS |
8-20-2009 |
|
|
SSO |
8-20-2009 |
|
|
SKF |
8-20-2009 |
|
|
UYG |
8-20-2009 |
|
|
URE |
8-21-2009 |
|
|
JNK |
8-21-2009 |
|
|
HYG |
8-7-2009 |
|
|
REW |
8-20-2009 |
|
|
QID |
|
8-20-2009 |
|
QLD |
8-20-2009 |
|
|
XLF |
8-20-2009 |
|
|
DIG |
8-20-2009 |
|
|
DUG |
8-20-2009 |
|
|
SMN |
|
8-20-2009 |
|
VXX |
|
8-19-2009 |
The VIX ETF signaled a sell before the rest of the signals came in the following day. That is interesting.
-K
Is the end (of this prolonged rally) Finally Here?
Whether you have been a bull or a bear since March you have to be worried about what will happen from here.
Bulls might lose if market goes down and corrects itself, Bears might keep losing money being short (unless they hedge then they are neutral players).
Here is a chart of the S&P futures that I found interesting how it topped around 3:31Pm at exactly the first Pivot Resistance (R1) or 1007.75. It's been downhill from there so far.
Have we finally reached the turning Point? (Click to Enlarge)
As I write this the ticker is heading towards 997.75 which is the first support for Friday.
UPDATE: WE HAVE HIT the first support line of 997.75 and might bounce or crash through.
Update #2: here I am 8 hours later and the futures have made a 360 degree turn. They now hit R1 (red line) of 1011.25.
What do you think? I am also long the Volatility Index (VIX) Via September 40 calls (got long today) because I think we are entering volatile markets again and that would be great.
-K
S&P Rising Wedge Pattern
I wanted to post this chart of the S&P with the following indicators added.
Bollinger bands with 2 SD's and also the 36MA.
It is a 4 hour interval so every candlestick represents 4 hours.
2 candlesticks equal to a full day so that eliminates a lot of noise and allows me to see what happened the first part of the day and the last part.
I did get a temporary sell signal on the S&P today but that was before the second candlestick closed so it is not yet a Sell.
As always I will update the latest signals every weekend until I find more time to update more often.
(Click the chart to enlarge)
I hope you enjoy this chart and I really want your opinions on what to do with the direction of this blog and the types of things I post.
-K
Stock Alerts of the Week May 4 – May 8 2009
Last week's picks have so far turned out to be good. DRYS is up almost 30% since signal.
Let's move to the score card. 5 positive gains of over 10% each. BAC signal got changed to a buy from a sell just 2 cents difference, and $BKX is acting up in my charting software so I will just eliminate it from watchlist.
Picks of the week of May 4th to May 8th 2009
|
Symbol |
Buy Date |
Buy Price |
Sell Date |
Sell Price |
|
QQQQ |
|
|
5-7-2009 |
34.29 |
|
BAC |
5-4-2009 |
8.82 |
|
|
|
REW |
5-7-2009 |
48.31 |
|
|
|
MOV |
|
|
5-5-2009 |
8.98 |
|
DRYS |
|
|
5-8-2009 |
8.36 |
|
URE |
5-8-2009 |
3.70 |
|
|
|
CFX |
|
|
5-7-2009 |
8.50 |
I hope you are enjoying the picks so far. And just let me know about any suggestions on the comment box
-K
First Forward Testing of the system a Success [MOV]
Forward testing is when you use a strategy and instead of back-testing it with previous data you actually test it going forward and preferably with real money.
For my new system MOV became that victim stock to be tested.
I first got a buy signal on April 17 2009 (Bought on the 20th at market open), i got in at 7.67.
I got a sell signal on May 5th 2009 and I sold at 8.81 with a market order.
I got about 14% profit on a 19 day long trade.
I don't have a chart to post with this one but just wanted to say this first forward testing trade worked well.
Here's to more good trades.
-K
