One Bad Bunch Will Spoil the AAPL ~ The Risk Averse Alert

Tuesday, April 24, 2012

One Bad Bunch Will Spoil the AAPL

First things first. Keep in mind tomorrow when the world is abuzz with AAPL, the iPhone's coattails have been growing ever shorter these past couple years. This is according to NASDAQ's cumulative advance-decline line, whose current position relative to the NASDAQ Composite Index speaks of a violent crash in waiting...

$NAAD cumulative

And wouldn't you know it, NASDAQ's very darling is poised to oblige...

company chart ($AAPL)

If formation of wave 2 in ... drum roll ... May 2010 isn't the strangest coincidence here at the prospective conclusion of five waves up in AAPL. The fifth wave of wave 1 unfolded much like wave 5, carrying RSI from 50 straight up to its peak extreme. This time even more so. One thing appears clear. AAPL's recent relative strength surge makes it highly unlikely $1000 will be seen anytime soon. Rather, AAPL appears a fine candidate for a 38.2% haircut, now that its momentum has been lost. A crash back to the range in which wave 4 formed ($350-$400) is very much in the cards.

There has been nothing technically "saving" about yesterday's and today's grind higher following the thud lower to start the week's trading. By all measures the market remains in a precarious position. I suspect this might not change tomorrow, given the likelihood AAPL's after hours gain of 7% is carried forth to the market at large using all the mechanisms the hopelessly bankrupt have for drumming up excitement in garbage left in the ruins of their collapsed Ponzi scheme, all the while only exercising unchanged reality wherein every minute counts.

Fast Money
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