Wall Street Craps – 2012 Global Ebook Finance Award-Winner

THE APPLE BEAR MARKET OPTIMIZED MOVING AVERAGE UPDATE APRIL 20, 2013

The so-called “Apple Bear Market Optimized 50-Day Moving Average” currently stands at 443. The current price as of Friday’s close is 390. The 417-392 price range for accumulating the stock that was mentioned on the March 30th Update is now at its lower end. So based on price alone, this would seem to be a place to start buying. But in terms of the internal indicators, it may still be a little too early to do so.

(Click here for the chart for Apple)

Internal Indicators for Apple currently read as follows:

* Relative Strength Reading:  28.00 which is a buy signal under 30.00

* Ultimate Indicator Reading: 30.66 which is just barely missing the buy signal under 30.00

* Money Flow Indicator Reading: 33.77 which is a few points away from flashing a buy signal

**********

Based on these indicators, I would say that the stock of Apple is very close to a buy signal.  But it would take a triple buy signal for me to start accumulating the stock. I am especially cautious about buying Apple until we see a clear Money Flow Indicator buy signal well under a reading of 30. At that time, I would gradually wade into the position with the idea of trading it as it moves back up to test its dominate 50-day moving average around 440.

What I’m trying to gauge, is whether those who bought the stock last year on the much-publicized march up have finally given up on Apple. It may still take an obvious piece of bad news in order to get the fundamentally-trained holders of the stock to capitulate. It could be now, but it could also be at a later time. But for now, it would appear that a trading rally is close at hand.

Trading Note: That rally could start with a quick bounce, a scary but successful retest on obvious bad news, and then a move up to challenge the moving average. This could start happening next week so be ready.

MARKET OBSERVATIONS FOR APRIL 15, 2013: The stock market continues to climb the proverbial “wall of worry” and in the process causing short-sellers to throw in the towel. But with a few key oscillators near sell levels, I would expect a short correction in the near term. That would be followed by an upside test of the recent highs. That next rally should probably tells us whether it is the last move in this rally or if there is more to go. I wouldn’t rule out the idea that the current rally could last into June.

Key market indicators show the following:

• Investor Sentiment – is still in a neutral position
• NYSE Breadth Oscillator – Ultimate Indicator reading of 68 – close to a sell signal
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 64 – approaching a sell signal
• Risk On/Risk Off Indicator – Ultimate Indicator reading of 43 – neutral
• Dow Jones Transportation Average – shows a key divergence with other major averages

For now, my advice is to remain on the sidelines and let the market set itself up for its next big move. A short-term top is only a few trading sessions away. That could lead to a short & sharp dip that may be worth buying into. But it appears that the upside is generally limited from this point on.

**********

As for Apple (AAPL), the stock has drifted back down towards it base around 420. Meanwhile, the Bear Market Optimized Moving Average for Apple stands at 451. The price pivot points looks for a possible move to the 417-392 range. It may take such a move in order to get the last weak hands to give up their stocks to stronger long-term hands. After such a time, the good news will follow about the next dividend boost resulting in a new Apple advance. Be patient and wait for a possible move into this lower price range.

MARKET OBSERVATIONS FOR MARCH 30, 2013: The stock market hit two new rally highs this past week, despite the negative-news coming from Europe. This relentless rally still does not show any real signs of correcting downwards in price. What it has done is chew up time by moving sideways and allowing the technical features of the general market to reach equilibrium. This means that the stock market can still go in either direction over the near term.

Key market indicators show the following:

• Investor Sentiment – short-term neutral & long-term moderately over-loved
• NYSE Breadth Oscillator – Ultimate Indicator reading of 55 – neutral
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 50 – neutral
• Risk On/Risk Off Indicator -Ultimate Indicator reading of 48 – neutral

The choppy action in the market last week allowed the market to neutralize its overbought condition. The general market is up against resistance at the present level. This is one of those times in which it’s too late to buy, too risky to sell short, and probably one in which a savvy market player would be willing to “take some chips off of the table.”

My advice is to keep your powder dry in case the market has a sharp near term correction during the months of April and May. Such a scenario would set up a good buying opportunity in mid-May.

**********

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.

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.

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.

**********

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!

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 17, 2013: The stock market tested its February 1st during this part week. I would expect one or two more tests of these highs (Dow 14018) in the coming 10 trading days. If we should get a short and sharp decline, it could be an opportune time to go long for a quick trip back up to the old highs. The internal breadth indicators are largely neutral and show that the market has been under a mild correction from within.

Just because the market isn’t going up, don’t assume that it has to go down. It is entirely possible that the market is simply chewing up time before continuing its march higher. And speaking of March, that is the most likely month to expect a more sustained drop in the market. Right now, there are just too many bears predicting the end to this rally. When the bears get quiet, it will probably mean that the final top of this rally is in. We may be close to that time, but I don’t think we are there quite yet.

Key market indicators show the following:

• Summation Index – has been in a month-long consolidation pattern – this means that the general market can be expected to go strongly in either direction
• Investor Sentiment – is short-term neutral & long-term slightly negative
• Fear & Greed Index – is at 84 which is in “Extreme Greed” territory
• NYSE Breadth Oscillator – Ultimate Indicator reading of 42 & headed for a buy signal
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 43 & headed for a buy signal
• Risk On/Risk Off Indicator -Ultimate Indicator reading of 51 which is neutral

Last week, I mentioned the Long-Term Treasury Bond Fund (TLT), Gold Miners (GDX), Silver Trust (SLV), and the China ETF (FXI) as possible speculations. But based on last Friday’s action, I will resist the temptation to “catch the falling knife” and avoid these stocks until things settle down. As I stated in my book, Wall Street Craps: How to Play Today’s Hot & Cold Stock Market For Fast Money With Less Risk, “buying in a panic is just plain risky.” Most high-percentage bottom are not at points of maximum fear, but instead at points of maximum apathy.

**********

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).