Apple Fails To Rally The Market…

368
907

rotten-apple

After Apple blew out earnings estimates on Tuesday evening, you would have expect a big rally on Wednesday.  But, it didn't happen, as this time the Apple was rotten.  Apple clearly is the leader in the Nasdaq, and carries more weight then all the other stocks in the tech sector.  But even with it's overnight jump of 15-20 points, the overall market didn't rally up huge like you would have expected it too.

Most people would have expected a 100-150 point Dow move up, with Apples' great news.  Since Apple carries so much weight in the market, this is clearly not a good sign for the Bulls.  Who is left to rally the market now, if Apple couldn't do it?

I'm really seeing more and more signs that this market is going to fall very soon.  I'm not going to stay that the "Top" is in, but the odds are much higher now.  Light volume is about all that can save this market from falling.  If they can keep the volume light tomorrow and Friday, then they could take out the current high with some fake jobs numbers.  That is something that they can easily fake, as earnings on all the various companies is a little tougher to alter.

The-Chart-Pattern-Trader-spx-60-minute-04-21-2010

Looking at the 60 minute chart, it sure looks like it is ready to fall.  But light volume rules as the PPT can easily push up the market when there aren't any sellers to stop them.  This Goldman Sachs issue is about the only thing I can think of that could cause some serious selling.

Many people and large institutions are currently trying to get out of Goldman, as they don't want to take a chance on whatever outcome may happen from their fraud charges.  This will put constant downward pressure on any rally attempts that Goldman has.  However, I think someone is going to hit the panic button if the rest of the market starts selling off.

I don't know if it will happen this week or not, but you can just feel the tension in the market, as the tape struggled up some, down some, up less, and down more... all day today.  Just like animals can smell fear, I think the traders are now smelling fear.  I don't think it's going to be too many more days before the panic starts.

They will wait for the jobs tomorrow, and Microsoft's earnings after the bell Thursday.  If that data does show some real improvement in the economy, I think the serious selling will start asap.  We could have a Black Friday?  I don't know how good or bad earnings will be for Microsoft, but I can tell you that most people will say that "Vista Sucks", and Windows 7 is just Vista part 2.

And since Apple is their biggest competitor, who just blew out earnings, what's the odds Microsoft will blow them out bigger then Apple?  Remember, Apple couldn't rally the market today.  How is Microsoft going to rally the market... without any new gadgets like the iPad?  Is Windows 7 as big or bigger of a money maker then Apple's iPad?  I don't think so.

That leaves it up to the Jobs numbers to be outstanding, causing another rally.  Everywhere I read, more and more people are stating that they don't believe the numbers to be accurate as the government lies so much now.  Nobody believe anything they say or do now.  So, if the numbers are too good... will the market believe it?  NO, of course not.  And if the numbers are bad?  Just another reason to sell off and take some profits.

You put together the NO Win Situation with the release of the Jobs data tomorrow, along with the high odds that Microsoft fails to beat estimates enough to justify a continued rally, and throw in the Goldman Sachs issue... and I'd say the odds are very strong for a sell off to occur.

And since Technical Analysis doesn't seem to work too accurately by itself anymore, I'm leaning more heavily toward the "overall" feel of the market, and what news events are coming out first... then see if it matches up with the TA's.  Right now, they do match up.  The TA's have been showing overbought now for quite awhile.  We have just been waiting for the right news event to trigger it.  Will it be the jobs data and Microsoft?  I think it's the bears best shot.

Red

368 COMMENTS

  1. Yes there is a creepiness in this market.

    But as of technical fundamentals of this market are very strong.
    Technically speaking thou shalt not short anything that is above 20/50/200 MA.
    If you do so you shall repent.

    I do not see any reason why TA is not working …

    For what you see in nearby economy may not be real, Your eyes may deceive you.

    Never let your sense of reality cloud
    Your judgment as a trader or TA guy.
    Trade your charts and switch of reality.
    For that the charts know all the truth that is.

    • All the truth that is related to current stock trading prices. All the truth shows a huge bear market, the question is when….and that could be months or years away, but I think sooner than that. Currently stupidly bullishly long….

  2. Carl’s morning call:

    June S&P E-mini Futures: Today's range estimate is 1191 – 1204. I still think that the 1180 low ended the correction and that a swing to 1270 is now underway.

    1195–1207.50 actual yesterday (8 points)
    1195.75->1204->1192.25 range last night
    1191-1204 estimate for today (13 points)
    1193 currently, so estimate is -2 to +11 from here (as bullish as I can recall)

  3. The bears got their initiation gap under the TL. You'll want to see a downward acceleration away from the TL today & tomorrow.

    Today is 4.22.2010, I posted earlier in the week the dates of the previous initiation gaps below the TL.
    Last one was 1.22.2010
    7.2.2010
    2.20.2010

    That's a lot of 2's.
    2 = 11 = Sum 1:11 = 66 = 6*6 = 36 = Sum 1:36 = 666

    • 666=999. In many countries, that is emergency number. I guess it means to call the PPT. So no decline then. lol

  4. Earlier this morning Carl said: I still think that the 1180 low ended the correction and that a swing to 1270 is now underway.

    He now says: My best guess is that the ES will drop to 1175 or so before the move up to 1270 begins.

  5. ALGO 1: Too clean looking double top on S&P Dow and many other indexes.
    ALGO 2: My Judgment is Short everything now…
    ALGO 1: My cousin ALGO 3 which works for PPT now, informed me… It is a trap laid by PPT.
    ALGO 2: So when we start buying.
    ALGO 1: Wait till enough bears short, then at 14:29:59 EST that is when we start buying.

  6. Carl now says:

    I think the market is now headed for 1225 or so (green oval). At that point it will become vulnerable to another 30 point break.

  7. tomorrow is 77 calendar days off the 2.5.2010 low

    2nd thrust of bull ended (9.23.2009) @ 77 calendar days
    4th thrust of bull ended (1.19.2010) @ 78 calendar days

  8. Carl at day’s end:

    1191-1204 estimate for today (13 points)
    1186.25–1207 actual today (20.75 points)
    Larger range, both lower & higher, than Carl suspected.

    Trade: In /ES at 1190.25, out there also. (no gain)
    Grade: C (lost no money)

  9. We are now in a New Moon Trade, which tends to favor TZA
    AmericanBulls had TZA with a Wait signal for today, with this trade in cash. Under AmericanBull’s Wait rules, nothing could have triggered a BUY, so this trade remains in cash tonight.

    Volume for TZA today was high today side of normal, 2nd highest in a month.

    $RVX (VIX for $RUT) closed up 3.75% with TZA down 3.2%. A divergence. Good for TZA.

    TZA was down for 6 days, up for 2 days, and down 3 days. Bad for TZA.

    The low for TZA had been from yesterday at $5.75. Today’s low was $5.56, 3.3% lower. Bad for TZA.

    Ultimate Oscillator for TZA fell for 9 days to 23, then rose for 2 days to 29, then fell 3 days to 22.9. Good for TZA at some point, as a value of 20 is generally considered a low point, but perhaps not tomorrow.

    MACD on the monthly chart has been flat far below zero for days, and remains that way today. Bad for TZA.

    Bollinger Bands for $RVX (VIX for $RUT): Today’s small black candle closed near yesterday’s close, a bit above the bottom Bollinger band. MACD seems to be flat. Looks like $RVX might fall tomorrow. Bad for TZA.

    Bollinger Bands for $RUT: Today’s long white candle for $RUT is a new high, headed towards the rising upper Bollinger Band. MACD is rising. Bad for TZA.

    Bollinger Bands for $RUT:$RVX ($RUT vs VIX for $RUT): today’s white candle fell to close near the Bollinger mid line. The upper Bollinger Band was flat today. Four days after what appeared to be a successful 3-day sell signal, pretty sure now the $RUT sell signal did not work. Bad for TZA.

    TZA had a higher high, lower low and lower close – Bad for TZA.

    Money flow for the Total Stock Market:
    $1,037 million flowing out of the market 3 days ago
    $ 364 million flowing into the market 2 days ago.
    $1,393 million flowing out of the market today.
    Bearish – Good for TZA.

    I will post the AmericanBulls candlestick interpretation a bit later.

    Overall, it looks bad for TZA.

  10. Sheesh gang…

    I leave to go work for one day, so I can pay my interest payment on my debt to the all might God Goldman Sachs, thinking that we might have a nice sell off today, and I come back to another UP day! WTF?

    I hope this was one of those “surprise rallies” that Sundancer said could happen after too many gap down days in a row, and not the start of a new uptrend.

    I hate seeing bottoming tails on daily candles, as the last time that happened, the market just went sideways for a week or so, then rallied high.

      • Thanks Dread…

        I like Daneric's stuff and respect his charting a lot. I try to read his post when I get the chance, and that pretty much sums it up to a “break of the sloping trendline” is the key to a sell off happening.

        That area he has in a rectangle box (labeled 16) is of big concern for the bears. If we continue trending sideways for another week, then a breakout to new highs would likely be next.

        But, there are several trendlines intersecting right now, from multiple directions, and this area is going to be tough to break. We'll see I guess?

  11. The Daily view from Americanbulls

    TNA had a Hold signal today, and was up today, remaining a Hold for tomorrow. The TNA buy was at $56.50. TNA closed at $68.65, up 21.5% since the buy. The candlestick today was a Long White Candlestick (strong buying pressure).

    TZA had a Wait (for a signal) today, and was down today, remaining a Wait for tomorrow. The TZA sell price was $6.51. TZA closed today at $5.58, down 14.3% since the sell. The candlestick for today was a Long Black Candlestick (strong selling pressure).

    Three recent TZA Buy signals have failed and may perhaps serve as a warning:
    Buy at $7.33, sell at $7.14
    Buy at $7.11, sell at $7.05
    Buy at $7.04, sell at $6.51

    For that matter, recent TNA Buy signals (until this last one) have also been uninspiring:
    Buy at $55.36, sell at $55.43
    Buy at $55.69, sell at $55.63
    Buy at $56.50, up 21.5%

    Summary of Positive $RUT based ETFs & a few popular ETFs & stocks (Market positive):  +10
    Hold: IYR(1x RE, up 3.8%), URE(2x RE, up 7.4%), DRN(3x RE, up 17.1%), QQQQ(up 4.0%), DIA(up 2.1%), UCO (2x oil, down 2.2%), AMZN(up 3.0%), ERX(3x energy, up 9.7%), IWM(1x, up 7.2%), UWM(2x, up 15.0%), TNA(3x, up 21.5%)
    New Confirmed BUY: AAPL

    Transition to Market Positive:  -1
    Not Very Highly Reliable BUY-IF: GS

    Transition to Market Negative:  -1
    Highly Reliable SELL-IF: SPY

    Market Negative:  -2
    Wait: USO(oil)
    New Confirmed SELL: GOOG

    Comment: Somewhat Bullish overall, Bearish Oil, Bullish $RUT, Bullish Real Estate
    Action for TNA or TZA for tomorrow: none

Comments are closed.

Loading Facebook Comments ...