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Thursday, March 15, 2012

AAPL Pullback

We saw AAPL hit 600 today.

It's just about it's own country, in size.

Here's the flag that's forming. Is this a bear flag or a bull flag? Was 600 a Bulltrap? Or after hitting 600, should we expect the country of AAPL to be more successful than ever?

I got out this morning, but am back in at 589.05. Will see.

37 comments:

  1. Well, we got our answer for sure. I was stopped out, and this triangle resolved to the downside.

    Still watching for the next setup, because apple is a tasty low-hanging fruit.....

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  2. I was thinking about dumping mine this morning. Haven't yet though.

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  3. Bond yields are up. Market is trending higher. We had an itty bitty pullback. I think it's more up from here.

    I got back into AAPL after the second leg of the W was formed at 14:31. Holding and adding since then. Again, overnight I'll be holding half-positions in AAPL and QCOM

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  4. CSX (trains) CEO said that coal volumes will be down 30%. I guess there's no joy in JOY.

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    1. Don't worry Rock you have been on the Naughty list for so long coal volumes will be up by 30% when I deliver your Christmas Present.




      Ok that wasn't the REAL Santa Claus - But that doesn't mean Rock has not been naughty this year

      Mutt

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  5. This article about how the new monopolies are killing the competition is brilliant (and scary). We all now live in fear not of the State but mostly of big corps who rule everything and everyone. Play ball or else. Not the market of a healthy country.

    http://harpers.org/archive/2012/02/0083788

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    1. Mannwich - I doubt that article says much more than you have already explained to us about how the big keep getting bigger and the small are forced to become smaller, but it may give a different insight.

      I am getting ready to head to bed, but I will read the article in the morning.

      Mutt

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    2. No, but it provides some pretty stark examples of this phenomenon (so proof), so it's well worth a read.

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    3. yep yep, the old golden rule. Those with the gold make the rules.

      I remember when our CEO met with a customer CEO's company, and said something like "Your company is at the top of our support list, you know. You are a key customer. I understand your company is considering the purchase of new hardware, and I hope you make the best decision for your company in the selection process". In other words, buy from us or your billion dollar investment in our product won't be repaired.

      Yep. Yep.

      The other anecdote is the story of the shit sandwich. Which is why you continue to work for your company, every day, taking a bite. You could always go next door, and take a bite of their shit sandwich, but after you do this a few times, you realize they pretty much all taste the same.

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    4. So true, Rock. Sigh. Which is why people only change shit sandwich's if either their current one starts to taste REALLY badly and/or if the other shit sandwich pays a hell of a lot more to nibble on their shit sandwich. As a former recruiter, I used to try to gently remind delusional hiring managers of this, usually to no avail.

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    5. Yep yep. And if we pay a hell of a lot more for the opportunity to nibble, I'm afraid all the current eaters' sandwiches will taste all the more bitter.

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  6. A note from Cobra's site is interesting:

    http://library.constantcontact.com/download/get/file/1104076872181-139/Finishing+the+Opex+Week+at+a+New+High.pdf

    He says that Monday will be down. It's interesting that even in 2009 and 2010, when the structural support to the market was in place, the monday was down, even then.

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  7. UUP is down, and the market is down. Hmmmmm.....

    UUP is still in it's upchannel, even after this -0.7% fall today.

    Bob Doll of Blackrock was on Bloomie. He said look for good free cash flow, those are the companies he likes. Mee Too. If you need to find it and don't know how, go to finance.yahoo.com, click a ticker, scroll down on the left looking for "key statistics", and free cash flow is way down at the bottom.

    Another thing he said was that he looks for revenue growth. Mee Too. He doesn't like banks because he can't figure out where the increasing revenue is coming from.

    I tried to short Sears SHLD again, and TDAmeritrade won't let me. They're closing like 60 stores, and will stop selling clothes in like 10 more. A little cooling off, you think? And it's up so much from December.....

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  8. @Greg,

    I came to say Congrats. You knew 'APPL'!

    Well done, Sir!


    ICan

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  9. Well, he was right. We had our lower open. I didn't take a chance, and was out of my half-positions. too bad, because my half-positions are up, like QCOM, AAPL

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  10. An interesting article on the use of trend lines. Of course, we all know how to use them, right?

    http://jerrykhachoyan.com/proper-use-of-trend-lines/

    I don't exactly do it this way, I let TDAmeritrade draw the trend channel, using 2 standard deviations from the mean of the price bar slope. Then I just look for the fallout outside those bounds. Some folks use bollinger bands, which are kind of interactive, but I don't like them because using the bollinger bands as trading signals, I've backtested that and it's far far from being accurate. In other words, using bollinger bands by themselves causes a money loss.

    In fact, I've backtested nearly every trading tool available, and by itself, using each tool as a trading signal has lost money. I ran across a website once where some college sr. thesis or perhaps MBA thesis (I forget which) which validated my study. Too bad, I wasted a lot of time on those backtests.

    Anyway, the one tool that comes closest to making money is the use of the MFI (money flow index) which shows net money flowing into or out of a stock: the math uses price * volume and I use a 5 period average. This way, if the bots are trading and volume is dropping while price is rising, I won't get a false "up up and away" signal. Using the slope of the MFI, and the channel with 2 standard deviations as the markers, really helps my trade.

    Last Friday was an exception. Every trade I made, every single one, went against me. I start a trade with a small number of shares, but at $10 per trade, it costs $20 for every mistake. If the trade doesn't go my way at the beginning, my perceived setup is immediately invalidated, and I exit the trade.

    Looking at the trades from Friday, they didn't work because there is no longer-term bias, either higher or lower. We're trading in a flat channel, and without a trend, looking at the charts seem to have no value.

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  11. Is this Lowenstein propaganda piece an indicator that the top is in? Or close?

    http://www.nakedcapitalism.com/2012/03/roger-lowensteins-disgraceful-propagandizing-via-bernanke-as-hero-piece.html

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  12. And AAPL paying a divvy another?

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  13. @Mannwich:

    The volume is low in the market these days (options expiration day is an exception, as we would expect). A tiny pullback was bought but at a significant lower volume.

    No, I don't think the top is in yet, because I think the low volume means people are waiting for a significant pullback before they enter. In the short term, I think the market will be up because the funds traders will have to enter to use their money. When I look at $CPCE on stockcharts, the ratio shows heavy volume on calls. Bloomberg calls it "the smart money". I dunno about that. But it could indicate attitude, and be a reflection of the public sentiment. Anyway, it looks like when you overlay the SPY with the CPCE, the high peaks in the CPCE seem to correlate to a future drop in the market. Low valleys in the CPCE don't indicate anything in particular, as far as I can tell.

    I've been reading over at
    http://jerrykhachoyan.com
    and this kid is pretty bright. Have a look at

    http://jerrykhachoyan.com/the-top-3-things-that-could-derail-this-recovery/

    and none of them are imminent, and most are long-term and have some solutions for work-arounds.

    So I think it's up-up-and-away for awhile, at least.

    But you are much better at identifying short-term tops than I. As I recall, in memory, you called a couple with amazing accuracy.

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    1. You're probably right, Rock. I just think that eventually most people will realize they almost have no choice but to flee bonds and get sucked into this market. That will take things quite a bit higher before the next Black-ish (or gray) Swan hits, with cries of "Hooocanode" following more bailouts of some undeserving peeps.

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    2. Yeah, I think so too. Probably push housing prices lower, mortgage interest rates higher, until the Fed steps in again.

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  14. The other think I forgot to mention is my observation of the weekly (weakly?) UUP. It's been in an upchannel, with the third test breaking down below the bottom of the 2 standard dev wide channel. And on the daily, UUP has confirmed the daily uptrend break with today's action. Usually, dollar down is good for the market's up trend.

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  15. I just discovered something about relative strength!

    You can kinda sorta get it from Stockcharts.com

    Go there, and put in the two tickers you wish compared, like

    "SHLD:SPY"

    and stockcharts.com will put up a relative strength pic for you. It seems to be calculated from the beginning of the year, so it's not like my "last 5 days" chart, but from the slope, you can get the relative strength trend.

    I put up my 60 minute chart with relative strength, and a 20 day relative strength chart for SHLD:SPY, and the shape of the two charts are identical. (the offset's not).

    So anybody who wants to understand my relative strength calls and evaluate them for themselves, this is a way.

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  16. Probiotics May Reverse Celiac

    note: "May"

    March 9/Sherwood, Oregon/Food Consumer -- Once celiac disease develops, the only known way to prevent ongoing damage to the small intestine is by following a strict gluten-free diet. Prevention would be a far better option, but it has conventionally been said that there is no way to prevent celiac disease from occurring.



    Now, researchers may have uncovered a promising strategy that, for the first time, appears to cause celiac disease progression to reverse. That strategy is consuming probiotics.

    Using a mouse model for celiac disease to investigate the influence of probiotics, taken orally, on disease development, researchers revealed that when mice were fed the probiotic strain Saccharomyces boulardii KK1, the pathological changes associated with celiac disease progression began to reverse. Researchers stated in the journal Laboratory Investigation, "The selected probiotic treatment reversing disease development will allow the study of the role of probiotics as a new therapeutic approach of CD [celiac disease]."

    It is already known that gut microflora play a critical role at the onset of celiac disease, and past research has shown probiotics may help heal intestinal barrier function in people with celiac disease, as well as alleviate the severity of the condition by influencing inflammation to varying degrees. It is also possible that the millions of people who suffer from "out of intestine" varieties of celiac disease or wheat intolerance, which can express itself in over 125 health conditions, may benefit from supporting their microflora with a regular supply of friendly bacteria.

    From the March 9, 2012, Prepared Foods' Daily News.
    http://www.preparedfoods.com/articles/110979-probiotics-may-reverse-celiac

    AAIP

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  17. MEH - Thanks for the link, I have a friend who suffers from celiac and the sad thing is, is that often times eating foood that has only come in contact with wheat products will make him fall ill, needless to say we do not make it to Subway very often - I will pass the link along to him.

    I have also heard other people talk about it and one conversation really stood out was that one person had relatives from Europ visit and while eating American food they came down with Celiac, but when they returned to Europe the where no longer ill.

    I do not remember all the details of the story, but it seems like Celiac is more of an American disease, which is rather odd, because all that FrankinFood is supposed to make us healthier - NOT

    Mutt

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  18. So I was googling around looking at charts (my cable TV is having reliability problems) and I found this about Bradley turn dates:

    http://forbestadvice.com/Money/Gurus/DonaldBradley/BradleyTurnDates2012.html

    China slowdowns. Profits fell 11%. The middle class has spent as much money as they have on properties, and now that the Chinese government says non-chinese investors can't buy property, looks like the property boom which has stalled will be failing. I suspect a contraction is coming in their near future.

    So we're starting turn-around Tuesday in good shape, down 1/2%. If you look at the Bradley data, you might conclude this is the start of something big. However, this is not my opinion (yet) because I play the tape, and we're firmly entrenched in our upchannel.

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  19. I think AAPL's going to pullback. I don't know why. I just get that feeling.

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  20. Looking at VXX, volume's been up since around Feb 6-9. Inching towards my target.

    The MFI says that even though the price is decreasing, the money is flowing into the stock. Interesting. There may be some bears out there. I wonder if it has anything to do with Bradley.

    But I don't fight the tape, I wait for my setup and pounce.

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  21. Housing market's recovered out here. Prices the same now as before the financial crisis.

    It really helps to have that "false" IPO cash in your pocket. And BIOMED cash as well, I guess.

    I've looked at properties since I came back, and each one that I would consider (not the dumps that you need to spend 100K in refurbishing) as an investment has sold for cash. There was a piece on the news TV that said Chinese millionaires are buying houses for cash so their kids can go to school here.

    Globalization.

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  22. Radioactive consumer goods being shipped to us from China and India.

    Globalization. Gotta love it.

    Don't buy tissue boxes from Bed Bath and Beyond. Your face may end up with that "healthy glow"....

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  23. Glow in the Dark TissuesMarch 20, 2012 at 11:13 AM

    Rock - Maybe, the Chinese who are buying up the houses, will buy their own tissues from Bed Bath and Beyond.

    Last month (or so) I stopped by a Bed Bath and Beyond for the first time, they had more crap in there and all I could do was think - How did I live so long without this over priced crap.

    Although I really did want a pepper grinder, but not for $25.

    Mutt

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  24. Actually, I have a peppergrinder that uses a couple batteries and has a light. I've worn out 3 of them over the last 20 years or so. It's amazing.

    Grinds cloves, anise, anything you can fit in its little chamber. I love it. I think it cost $25. Worth it. However, now I have to buy a geiger counter so I can count geigers before I buy at BBY.

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  25. Actually, I wonder if there's a market for an integrated test box that would test for common toxins and radioactivity and the like.

    I used to tell my worthless son that if he didn't study, all he'd be fit for is a food taster for a king.

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  26. Actually, I wonder if that could be an iphone app.....

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  27. vxx almost made my target: 20.02. Actually, it may not be a good investment because the math of the leverage may not work when the spy gets so high.

    Over the last 11 days, the spy has gained 4.4% (11 days ago we had that "big" one-day pullback) but the VXX has lost 19%.

    Should have shorted the VXX.

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  28. You know, one thing AAPL's never been good at is thermal management.

    http://www.huffingtonpost.com/2012/03/19/ipad-overheating-problems-issues-complaints_n_1362659.html

    For a long time I've battled the HTML3 because to stream HTML3 video requires more and more bandwidth, compared to MPEG or DivX compression. That means we users are more affected by the Comcasts and ATT's bandwitdh charges. AAPL's rolling over a little on this one, I think, because the processor and memory system in iPad3 is more powerful (still can't decompress mpeg realtime). So more powerful processors/bigger memory needs more power. More power means more heat.

    The scary thing is people take these on airplanes, and use them for the entire trip.....no matter how long or short that may be.....

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