Trader's Tip: Could The Drop In AAPL Be Forecast? Yes.

21 thg 4, 2018

I was asked if AAPL-will become the next-Blackberry....My answer was no. Yet....
The drop in-AAPL was indeed forecast in the charts. Here is what I saw:
1. A bearish butterfly was completed.
2. At the same time - All of the indicators on the top of my chart went bearish.
3. The lower indicators, chop and chop zone, also went negative (red).

Tips:
1. Examine your indicators when a "W" pattern, AB=CD, or three drives pattern are completed. Did your indicators change direction to down?
2. How far above a moving average is your stock (or position)? In financial charts, things tend to revert to the mean.
3. Has the broader market cycle had a long up move? The late, great Ed Hart once said.....
"The analysts not only counted the earnings of the here, but also of the hereafter."
4. Moving averages are guides. Selling to the downside tends to accelerate when the 20 day moving average fails to hold.
5. If the 20 day moving average fails, the next support is the 50 day. Ever notice that selling accelerates at these two levels?
This is because money managers have sell stops at the 20 day and 50 day. Use this knowledge to your advantage.

My feedback:
I went through more than 400 stock charts this week. Only 5% of these were in well defined, solid up-trends.
Be careful - stock prices are still way too high. How did I play this? I made my money this week going short.
I bought and sold DOG-because AAPL-BA-IBM-GS were falling. Currently, I sold my positions and await better pricing.
The reason the stock winners fall so fast is because those that own the winners don't want their profits to disappear, so they sell.
This week you saw this in-AAPL,as well as the semiconductors. Once this starts, it quite often feeds on itself.
The Market:
I think we will take one step up, then two steps down. Then repeat.
I still feel we will re-test the S&P-500-lows at 2532, fail, and then test 2400.

Don't chase. Let the position come to you.
May all of your trades go well. Don.