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Post by capablanca on Sept 22, 2012 9:28:23 GMT -8
A word about protocol and a word about divergence.
It is helpful to the reader if one specifies the time period of a chart when referring to it. For example, daily, weekly, or hourly bars.
I pay attention to MACD histogram divergence on the weekly chart. According to my methods divergence does not occur until two conditions are met: 1) a new price high that is not matched by a new MACD high; 2) the most recent MACD bar is lower than the immediately preceding bar. As of today, the first condition has been met, but not the second.
I read caution, but for now the trend is our friend.
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Post by lovemyipad on Sept 22, 2012 13:13:33 GMT -8
YAY, Capa is here! I've missed you! Thank you, as always, for the great post...and the reminder on timeframes...slipped on my labelling this week...will clean up...
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Post by lovemyipad on Sept 30, 2012 11:58:45 GMT -8
AAPL WEEKLY CHART (with my notes): Intermediate-term: downwave in an uptrend (until proven otherwise)
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Mav
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Post by Mav on Sept 30, 2012 12:10:15 GMT -8
Somebody's gone chart-crazy! ;D
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Post by rosie on Sept 30, 2012 12:26:17 GMT -8
I think we need to get you a seismograph for that one. yikes!
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Post by capablanca on Oct 1, 2012 15:30:32 GMT -8
A word about protocol and a word about divergence. It is helpful to the reader if one specifies the time period of a chart when referring to it. For example, daily, weekly, or hourly bars. I pay attention to MACD histogram divergence on the weekly chart. According to my methods divergence does not occur until two conditions are met: 1) a new price high that is not matched by a new MACD high; 2) the most recent MACD bar is lower than the immediately preceding bar. As of today, the first condition has been met, but not the second. I read caution, but for now the trend is our friend. I have been traveling and without internet. (No Walleyes either.) The MACD histogram printed a shorter bar on the weekly chart last Friday. This confirms my MACD negative divergence signal. The price was $667.11. In anticipation of this I lightened up last Thursday. Still way long.
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Post by lovemyipad on Oct 1, 2012 16:18:58 GMT -8
AAPL WEEKLY CHART (with my notes):
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Post by h2oskier on Oct 7, 2012 16:30:18 GMT -8
I think the thing we need to figure out, since aapl has been lagging the markets, does it know something we don't know and the markets are now going to get their 4-8% pullback. If this is the case, will aapl fall further with the market?
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Post by capablanca on Oct 7, 2012 17:33:39 GMT -8
Apologies to old hands for repeating this preamble. I am not much of a technician and the chart I follow is the weekly. I have been very long AAPL for a long time.
As I posted last week MACD-h on the weekly confirmed negative divergence. One week later we can now add:
1) MACD is about to cross over. 2) Stochastic (10,3,10) has crossed and short-S has fallen below the 80-line. 3) RSI (14) has fallen to touch the uptrend line starting last November. 4) On the log version of the weekly, the price has very slightly breached the midpoint of my uptrend line from September of ’08
Not directly chart related, but worth observing:
5) IV has reached .37; the last time it exceeded .38 was early April 6) In the last 3 months; AAPL +7%; S&P500 +8% 7) In the last 6 months; AAPL +3%; S&P500 +6%
RSI and the uptrend line could prove support levels. IV could peak here. The S&P500 could continue to rise.
But if not, a further drop might take us all the way to the 600 region. And if the overall market reverses with some magnitude, I don’t believe 550 is out of the question.
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Mav
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Post by Mav on Oct 7, 2012 17:50:20 GMT -8
Yeah that's kinda bearish.
I agree on the downtrend, but I have problems making predictions far out. Besides, zooming too far out means I might miss an oversold bounce or two even if the Worst Case Scenarios(tm) unfold.
For me, it's level by level, instead of trying to call a top or bottom (though of course I do have medium/longer-term projections).
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Mav
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Post by Mav on Oct 7, 2012 17:51:42 GMT -8
I would also point you to the last time the MACD-h weekly crossed over, simply by way of counterpoint/perspective.
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Post by mbeauch on Oct 7, 2012 17:55:07 GMT -8
Capa, the weekly chart is the one that scares the heck out of me. Nothing good to see there.
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Mav
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Post by Mav on Oct 7, 2012 17:57:08 GMT -8
*points to last post. Somewhat...pointedly*
Past isn't necessarily prelude, but it does offer possibilities.
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Post by mbeauch on Oct 7, 2012 18:05:40 GMT -8
Points to last post. Somewhat...pointedly. Past isn't necessarily prelude, but it does offer possibilities. Even though I have been caught with my pants down the last 2 weeks, I always believe in trends. The trend is not our friend on the weekly. Like everyone else I am looking for signs of life.
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Mav
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Post by Mav on Oct 7, 2012 18:10:02 GMT -8
Look...again...! At the weekly MACD-h readings in May. Contrarian? Maybe, but a possibility.
(Disclosure: >50% cash, light on AAPL options, got AAPL core common like always)
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Post by mbeauch on Oct 7, 2012 18:26:46 GMT -8
Look...again...! At the weekly MACD-h readings in May. Contrarian? Maybe, but a possibility. (Disclosure: >50% cash, light on AAPL options, got AAPL core common like always) Mav, that is exactly what I have looked at. Judging by May we have several points to drop as far as RSI is concerned. 8-10 RSI points on the weekly RSI is a big move in the wrong direction. The only plus I see is that the RSI on the weekly usually stays above 50.
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Post by lovemyipad on Oct 7, 2012 20:17:49 GMT -8
AA (H20), that indeed is the question. Are we leading or following?
Thank you, Capa! You're too modest when you say you're not a technician. When I first started trading seriously last year, I learned a ton from your posts in the archives.
Mav and Mark, are we all seeing/saying the same thing? My take: right now, MACD-h is a negative sloping mountain, meaning downwave in an uptrend. If, however, weekly MACD-h crosses down into a valley, that's a multi-week downtrend/consolidation period. Last time that happened was April, earnings didn't save us, and it lasted two months. Which would mean more of the same thing we're seeing now with this "up 10, down 20" pattern...with the occasional up 20 thrown in for good measure.
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Post by Mav on Oct 7, 2012 20:21:56 GMT -8
BUT see May, iPad. MACD-h went negative - AAPL bounced, and the slope of the MACD-h curve went positive. We are no longer at the top of the mountain - we've been sliding for a while already.
I agree the trend is down and the selling pressure may not be over yet. If I had to guess, I'd say it's not (which is why I'm very light on AAPL options). OTOH, there's important levels not far away that are at least good for a tradable bounce for cash flow, even to the upside. Confluences, support levels, etc.
And I think the selloff will stop short of 600. That opinion of course can change tomorrow.
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Post by lovemyipad on Oct 7, 2012 20:27:03 GMT -8
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Mav
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Post by Mav on Oct 7, 2012 20:57:11 GMT -8
But of course. 20 trading weeks after all. Maybe I'm early, but things seems to be setting up for a resolution of this downwave by the end of this month. Maybe around earnings. We'll have to see. Speaking of earnings, I'd better work on those numbers soon...
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Post by lovemyipad on Oct 13, 2012 14:37:57 GMT -8
AAPL WEEKLY CHART (with my notes): Until proven otherwise: Intermediate term: downwave in a downtrend/consolidation period Long-term: uptrend
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Post by capablanca on Oct 13, 2012 18:35:30 GMT -8
Is it over?
The 26-week moving average held in the last correction and almost held in the previous couple to that. It is about $610 now.
But other indicators point to further pain. Fast Stochastic has dropped below 30 in all of the recent corrections, but is still above 50. The RSI (14) uptrend line was just punctured. MACD histogram has not yet printed a shorter negative bar. Add to that that the SPX histogram has now shown negative divergence on the weekly.
I rate it only fifty-fifty that $600 will hold.
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Post by lovemyipad on Oct 13, 2012 19:45:22 GMT -8
Capa, I concur. Simply not enough strong "bottom!" indicators at present, compared to previous bottoms. Makes me wonder if SMA-20 holds, or if there's another flush coming.
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Post by Mav on Oct 13, 2012 19:48:10 GMT -8
Counterpoint:
Sentiment(tm)
If it was all up to technicals, I wouldn't be playing for an at least short-term bounce.
But it's not always up to technicals.
If the iPad mini doesn't boost AAPL, THEN I think the downwave scenario you theorize has a higher chance of happening.
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Post by lovemyipad on Oct 13, 2012 19:52:25 GMT -8
Mav, this is intermediate-term here on the weekly chart. We can absolutely have short-term upwaves (daily chart) in intermediate-term downwave/ consolidation periods.
The daily chart does suggest at least an oversold bounce/retrace any second...
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Mav
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Post by Mav on Oct 13, 2012 19:59:58 GMT -8
For the record, I'm not denying the gravity of the downwave. But I have enough conviction for a countertrend play, and part of the reason (aside from the sentiment I mentioned) is the oversold daily chart.
I would add that this downwave could resolve relatively quickly based on MACD-h being more past than present indicator. See: May 2012. Interestingly, things may be setting up for a much gentler Red October than the previous two (for directional bettors, anyway - I would still prepare for a period of consolidation/"trendlessness" myself).
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Post by lovemyipad on Oct 13, 2012 20:01:40 GMT -8
Excellent point on the lag with MACD- h.
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Post by Mav on Oct 13, 2012 20:04:22 GMT -8
I'm not being overly bullish in that assessment, I think. It's just that there was one or two more weeks of selling during that period, and then MACD-h started sloping upwards in the negative range. Obviously, AAPL had hit the bottom long before the MACD-h started looking "more hopeful". Of course, I could also be 100% wrong on my countertrend play. Good thing I didn't go all-in then.
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Post by lovemyipad on Oct 13, 2012 20:09:20 GMT -8
Mav, daily chart HAS hit that very rare "screaming buy" territory. It's just that weekly hasn't -- see Fast STO. And that, combined with the fact weekly MACD-h just now flipped negative...plus SPY just starting a pullback...well, it just puts a question mark in the little bubble above my cartoon avatar's head. Makes me wonder (pure speculation) if we have a repeat of April coming with 50 points up, and 80 points down. But there's no way to know that...we just have to watch and see how it unfolds, and take it level by level.
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Post by capablanca on Oct 14, 2012 11:44:25 GMT -8
I don't disagree regarding May, however RSI turned up two weeks before MACD-h reversed slope; fast STO bottomed one week before.
My chart does not have a study for iPad mini effect, but unless there is a "one-more-thing" surprise, it should already be in the price, no?
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