Can AAPL Buck the Trend?

We saw some great action in the last two weeks. The DOW had a 10 day run of almost 900 points before the Bears felt lonely and decided pay us a visit in the later part of last week. With this disappointing end, many stocks and indexes are forming bearish wedges, so it would be advisable to go light. I recommend swing traders go mostly cash... EXCEPT FOR AAPL! Damn if it's not bucking the trend!


From an overall market perspective, while it's true that the current inverted Bull/Bear ratio indicates a bullish reversal, the whipsaw action in the market makes things a bit uncertain. I recommend caution. At the same time, you just can't ignore the counter rally from AAPL! That's why I'm suggesting to hold AAPL up to earnings, and either put in some hard tight stops, or hedge your position. The market is fickle, no telling where it will go post earnings regardless of the report.

From an overall market perspective, let's be realistic, we are in a down market, there's no denying that. The DOW appears to be forming a symmetrical triangle, which is usually bullish, in a bull market. But we're in a bear market, and from experience, triangles forming in bear markets tend to be bearish. Also, the inverted hammer we put in last we is another bearish sign that we are headed for correction territory, possibly testing 11,700. If the triangle breaks down, watch out, there's little support down to 10,700.

On the S&P we started a break out, which turned out to be false. I think what actually happened over the past two weeks was a short covering rally. So, I see the S&P retesting the 1270 mark again. All in all, I'm not sure we actually found the bottom of this market. If we had, last weeks rally would have been confirmed with expanding volume. Instead, volume dwindled, and the air was let out of the proverbial tires.

So, where are we? I don't know. All I can say is that I'm cautious from an overall market perspective, but see AAPL as a shining star in a thick cloud of mirkiness. Time will tell.

-zach bass