AAPL – (dip buy on watch) – yesterday we saw a fakeout on both sides. Morning started with a quick drop, then a big pop to highs of 125.95. I noted within our group that I didn’t like the look of AAPL/market when it started giving up the gains from that pop. Anytime we see a big pop and it doesn’t hold, clear sign to watch out below. Soon as we broke the low of day that was put in during the first 5-10 minutes of trading, it sold off from there. What we’re seeing here overall in the market, in my opinion, is a flush of new long positions. When there’s too many people on one side of a trade, it will tend to reverse. I saw an extremely low P/C (Put/Call) Ratio which means the long positions outweighed the short ones, and that’s usually a contratarian indicator. Again, when everyone is long, watch out cause the market will look to shake out weak hands who were chasing the highs. I personally like that the market is gapping down here as of this writing, 8Am EST. It should get this down move over with faster and we can see where the support comes in.
Key levels to watch: Potential gap fill zone could serve as a ‘dip buy’ area – noted on chart from $119.05 to $120. If it doesn’t hold $119.05 then $117.50 is next that must hold for bulls. If it breaks below $116.81 then we’ve got a short term trend reversal.
AMD – (dip buy on watch) – pretty similar as above with AMD / AAPL both tech stocks. As discussed on the call last night we had a big weekly breakout of an 18 week trading range. Currently the weekly candle is setting up as consolidation/inside candle, which as long as last weeks lows hold up, could prove to be a nice dip buy. As of this writing 8:44Am – we are gapping down which in my opinion is the best scenario to get this sell off over with quickly
Key levels to watch: $88 to $87.50 level would be encouraging to see buyers step in. If we break and stay below $86.53
BA – had a small short play on this into today will likely close it for small profits, but wanted to share this chart as an example of how Ichimoku cloud can serve as resistance when you’re below it, then finally break inside of the cloud, and re-testing the top. Whereas if we were above the cloud, the top of the cloud structure would generally serve as support.