A healthy response to Apple's earnings is powering equities futures after hours this evening - keeping the bears away for at least another day. Overnight gaps are usually associated with third waves (and "c" waves, which are considered a type of third wave). We may be seeing a wave 3 of 5 on the small, near-term count for the broad markets. If so, that can send them up to and slighy above the Fibonacci retrace levels (like 1112 SPX and $43.29/43.30 QQQQ). Swing traders will expect to see followthrough tomorrow and Wednesday, then see if Thursday presents a reversal (or not (a continuation)). What about for Apple? While I can see a couple of ways to view the big-picture Elliott Wave count, the immediate question will be whether a gap up may be a wave 3 of 5 in this stock too. If this does happen - if Apple starts slipping on Thursday (or sooner which would be more bearish), then Apple investors/traders will have to start really analyzing what bigger-level wave would be topped by such a fifth-wave move.
Daily, weekly and monthly charts of Apple (AAPL) are below. The monthly Bollinger Band shows its upper band at $210 which is likely to be tested on the move this week. Notice that the indicators have been losing steam with some negative divergence too (and some big volume selling but lighter-volume buying recently). Unless this new push can really produce good momentum and more than a short-covering blowoff, this weakness in the indicators signal there may not be staying power in this push up.
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