THE APPLE BEAR MARKET OPTIMIZED MOVING AVERAGE UPDATE MARCH 20, 2013
On March 5th, the Money Flow, Relative Strength, and Ultimate Indicators triggered buy signals for the stock of Apple. Thus, this triple buy signal made it possible to take initial positions in this undervalued, oversold, and unpopular high-quality stock near the absolute bottom around 420.
(Click here for the chart for Apple)
Since that time, the price of Apple has rallied to a current price of 452. The so-called “Apple Bear Market Optimized Moving Average” stands at 464, just 12 points away. This moving average has served as the cap on three previous rallies in Apple over the past several months. As long as the price of Apple stays under the Optimized Moving Average, it is still considered to be in a bear market phase.
If the stock does not rally through the Optimized Moving Average at this time, I would expect a retest of the early March lows around the 425-407 price range. A successful retest could be in store for the stock so I’d start accumulating the stock on any move close to that price area.
MARKET OBSERVATIONS FOR MARCH 17, 2013: The stock market hit consecutive new highs for 10 trading sessions. That remarkable string was broken on Friday with the market’s modest decline. While the general market is certainly overbought by many measures, it is not as over-loved as you might expect. Since investor sentiment is still largely neutral, the market may correct in the short-term and then present investors with another chance to buy for the next leg up. That appears to be a less risky approach to making money than trying to short this relentlessly bullish market.
Key market indicators show the following:
Many key breadth indicators are showing neutral readings even after this persistent advance. If the market continues to march upwards in the coming week, it may present an opportunity to buy the Long-Term Treasury Bond ETF (TLT). This is one of the best ways to participate with less risk in a downward market as opposed to going short or buying inverse Exchange-Traded Funds.
If the market heads down next week, it may set up a short term buying opportunity for a continuation of this advancing market. So be ready to move in either direction as the market reveals its next opportunity for traders and investors.
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THE APPLE BEAR MARKET OPTIMIZED MOVING AVERAGE UPDATE MARCH 9, 2013
The Money Flow Indicator hit 5.13 during this past week. Both the RSI and ULT Indicators made brief buy signals shortly afterwards. Thus, this triple buy signal made it possible to take initial positions in this undervalued, oversold, and unpopular high-quality stock. (Click here for the chart for Apple)
But the price action since this triple buy signal has been more of a “dead cat bounce.” Perhaps, the stock is not yet ready to advance. My guess is that the stock of Apple will experience a lot of selling as the end of the quarter approaches. Many money managers with large positions in the stock will not want this on their books at the end of quarter. The stock of Apple will most likely be ready to advance after this selling period is over.
On the trading side, it seems to me that the stock needs one more thrust downward in order to shake out all of the weak hands. It may take a move to the 410-400 price area in order for that to happen. It could do so intraday so a limit buy order may be required in order to capitalize on such a move.
MARKET OBSERVATIONS FOR MARCH 9, 2013: The stock market hit consecutive new highs during the last 6 trading sessions. This is a classic example of letting a powerful move run its course and resisting the urge to short. The upside momentum has probably peaked at this time, but after a short correction, I’d expect at least one more overshoot rally to a new closing Dow high. In order for that scenario to pan out, we first need a sharp and broad correction lasting a week to 10 days. Then one final narrow advance up to a new high which is not confirmed by breadth and other broad-based averages.
Key market indicators show the following:
With many key breadth indicators at or near sell signal levels, I would be looking for a correction to begin on Monday. This will be the first leg down with most likely a retest of Friday’s highs in one to two weeks. Since the “Wall Street Craps Method” discourages both leverage and shorting the market, the best thing to do is remain on the sidelines and let the market correct. Then look for either a short-term upside opportunity in the general market or a trade in the Long Treasury Bond ETF (TLT).
Remember that the sentiment indicators show that market participants are still neutral. This is not a sign of a major top. So a correction here would give nimble traders and investors a chance to ride this market up when the rally resumes.
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THE APPLE BEAR MARKET OPTIMIZED MOVING AVERAGE UPDATE MARCH 2, 2013
The Money Flow Indicator hit 13.66 with Friday’s close. This is a clear buy signal and the first chance to take a position in Apple. Both the RSI and ULT Indicators are in the low 30s which are also very close to flashing buy signals on any further weakness. Now is the time to gradually wade into this undervalued, oversold, and under-loved high-quality stock!
Note: Monday March 4th or Tuesday March 5th could experience a sharp spike down (possibly towards 420-407) to buy into. Don’t be afraid to pull the trigger. It will be difficult to get the perfect price, but now is an optimal time. Remember, there is also the risk of missing out on a good opportunity! (Click here for the chart for Apple)
THE APPLE BEAR MARKET OPTIMIZED MOVING AVERAGE UPDATE MARCH 1, 2013: I have devised a new indicator for Apple which I call the “Apple Bear Market Optimized Moving Average“. It is a 50-day exponential moving average of the price of Apple. It currently has 3 points that served as the top of small rallies since early October 2012. This will help those who want to buy the stock low but want to get out before it turns down again. As of today, the moving average is at 482 and dropping rapidly.
With today’s AAPL price of 434, the spread between the Optimal Moving Average and current price is 48 points. Until the price of AAPL breaks convincingly above the Optimal Moving Average with increased volume, expect the bear market in AAPL to continue….much to the chagrin of those who purchased the stock during the height of its popularity last year.
Until the weaker hands give up on the stock, the bear market in AAPL should continue. The first clue would be a clear oversold buy signal in the “Money Flow Indicator” which has called each of the last three rally in AAPL.
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Right now, the Money Flow Indicator is at 23.51 which is in my estimation about one to three days away from flashing a buy signal. With AAPL’s current level of investor apathy, it would not be surprising to see a bottom in the next few days. Manage your chips wisely by taking a small pilot position in AAPL when the Money Flow Indicator reads below 30.
Update March 2: The Money Flow Indicator hit 13.66 with Friday’s close. This is a clear buy signal and the first chance to take a position in Apple. Both the RSI and ULT Indicators are in the low 30s which are also very close to flashing buy signals on any further weakness. Now is the time to gradually wade into this undervalued, oversold, and under-loved high-quality stock!
MARKET OBSERVATIONS FOR FEBRUARY 25, 2013: The stock market hit a new high last Tuesday before embarking on a sharp decline. Friday’s advance recovered most of the previous two-day decline. The market is in the unique position to either test last Tuesday high or test last Thursday low. Don’t be surprised if the market follows a common pattern of heading down towards the end of the month (and rallying in the beginning).
Key market indicators show the following:
With many key breadth indicators near buy signal levels, I would welcome a return to last Thursday’s low with a chance to go long towards an intermediate top in March.
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THE APPLE BEAR MARKET OPTIMIZED MOVING AVERAGE UPDATE FEBRUARY 19, 2013: I have devised a new indicator for Apple which I call the “Apple Bear Market Optimized Moving Average“. It is a 50-day exponential moving average of the price of Apple. It currently has 3 points that served as the top of small rallies since early October 2012. This will help those who want to buy the stock low but want to get out before it turns down again. As of today, the moving average is at 498 and dropping rapidly.
With today’s AAPL price of 460, the spread between the Optimal Moving Average and current price is 38 points. Until the price of AAPL breaks convincingly above the Optimal Moving Average with increased volume, expect the bear market in AAPL to continue….much to the chagrin of those who purchased the stock during the height of its popularity last year.
Until the weaker hands give up on the stock, the bear market in AAPL should continue. The first clue would be a clear oversold buy signal in the “Money Flow Indicator” which has called each of the last three rally in AAPL.
Key Apple indicators show the following:
- Relative Strength Indicator: “42” reading & is more than a week from a buy signal
- Ultimate Indicator: “42” reading and is also more than a week away from a buy signal
- Money Flow Indicator: “55” reading which is far from being a buy signal under 20
Until the “Apple Bear Market Optimized Moving Average” is broken to the upside, the trend is down for this popular stock. And until the Money Flow Indicator gets near 20, it still hasn’t gone enough to an extreme in this most accurate forecasting timer for buying Apple.
Special Note: It looks like a retest of the lows is about to happen. I would look to accumulate AAPL on this retest as it has a good chance of being successful. I would expect a negative “cover story” to cause the weak hands to capitulate on this retest. It may pay to be a day early on your buying of these pilot positions. AAPL has a habit of making huge jumps to the upside when bottoms are reached. Being a day or two late may cost you 30-50 points!
MARKET OBSERVATIONS FOR FEBRUARY 5, 2013: The stock market’s advance may be nearing its end sometime this coming week. If we can get another token new high in the Dow that is not confirmed by corresponding strength in the Dow Transportation and Nasdaq Index, it could signify the end of rally and the beginning of a sustainable correction. Smart traders and investors would be wise to sell into any strength during this coming week especially if it comes with “obvious good economic news.” That news will be the signal for all the latecomers who missed the rally to come into the market at precisely the wrong time.
Key market indicators show the following:
This coming week may mark the end of the current rally that started last November. Traders and investors should use any strength to lighten up on any remaining positions. The risk-reward ratio just doesn’t support adding or even holding too many long positions in the stock market at this time. While some issues may continue to rally, the time for the general market has probably come to get out.
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THE APPLE BEAR MARKET OPTIMIZED MOVING AVERAGE UPDATE FEBRUARY 4, 2013:I have devised a new indicator for Apple which I call the “Apple Bear Market Optimized Moving Average“. It is a 50-day exponential moving average of the price of Apple. It currently has 3 points that served as the top of small rallies since early October 2012. This will help those who want to buy the stock low but want to get out before it turns down again. As of today, the moving average is at 517 and dropping rapidly.
With so many traders, investors, and institutions having paper losses in this popular stock, it appears that the one thing that people don’t expect is a bear market in this issue. Almost all of the fundamental projections for the stock are in the 700-800 price range. Until these weak hands get scared out of the stock, my technical and behavioral indicators point to lower prices.
Some key Apple indicators show the following:
- Relative Strength Indicator: “34” reading and not far from a buy signal under 30
- Ultimate Indicator: “31” reading and close to a buy signal under 30
- Money Flow Indicator: “43” reading which is far from being a buy signal under 20 (Note: This indicator has been the most timely and reliable of the three mentioned above!)
Until the “Apple Bear Market Optimized Moving Average” is broken to the upside, the trend is down for this popular stock. And until the Money Flow Indicator gets near 20, it still hasn’t gone enough to an extreme in this most accurate forecasting timer for buying Apple. For now, my crystal ball says that a turn to the upside in Apple will have to wait until mid-to-late February (approximately Feb. 18-23).