Wall Street Craps – 2012 Global Ebook Finance Award-Winner

THE APPLE BEAR MARKET OPTIMIZED MOVING AVERAGE: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 539.

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. It seems hard to fathom, but it may take a move to $425 before panic sets in with this stock. Only then will the stock of Apple trade from weak hands to strong ones. There are just too many investors relying on “hope” which is almost always a bad thing to bet on when playing in the stock market.

Despite what Tom DeMark said on CNBC, I would contend that the stock of Apple has not fully exhausted itself on the downside. So my word of advice is simply to trade carefully with this issue. And if you buy it, do it incrementally on the way down as an investment rather than a trade.

Until the “Apple Bear Market Optimized Moving Average” is broken to the upside, the trend is down for this popular stock.

MARKET OBSERVATIONS FOR JANUARY 21, 2013: The stock market’s advance is running into resistance as it returns to its previous high. It has now reached its 9th successive new high in this rally since mid-November. Therefore, its momentum should soon run out (rarely over 13 successive new highs in any rally). But internally, the general market is not overbought. In fact, the 10-day ARMS readings are showing that the market is even slightly oversold. This surprising fact leads me to believe that any correction will be shallow and short-lived. Instead, any decline should be viewed more as a possible buying opportunity for another ride up.

Key market indicators show the following:

• Investor Sentiment – is neutral both short and long term
• Fear & Greed Index – is at 89 which is in “Extreme Greed” territory
• NYSE Breadth Oscillator – Ultimate Indicator reading of 56 which is neutral
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 46 which is neutral
• Risk On/Risk Off Indicator -Ultimate Indicator reading of 60 which is neutral and unchanged from last week

For now, my advice is to stay or move to the sidelines and let the market set itself up for a possible buying opportunity. The stock market may surprise the public by continuing to rally instead of decline over the intermediate term.

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