AAPL Cycle High Confirmed
05/04/16 Weekly Re-Lay Alert: ‘All Quiet on the Eastern Front?’
“An eerie calm has shrouded the Asian markets since late-January. But little upward progress has been made in that period. And, just look at AAPL for a textbook example of what I still consider a very viable (and impending) possibility in many Indices.
For almost three months, AAPL slowly but steadily rebounded from its late-Jan. low – which was the retest of its late-August low, which was the culmination of a 30+% meltdown from its late-April 2015 peak.
And then, in a matter of days (11 trading days, to be exact) it abruptly gave back all the gains of the preceding 3 months. That is NOT the sign of a healthy market.
The latest drop came immediately after AAPL had rebounded into the latest phase of a 23–25 week low-high-high-high-high-(high) Cycle Progression – dating back to the June 2013 bottom – that now projects a 23–25 week decline…into late-Sept. ’16.
Even more significant, the latest plummet – which occurred exactly 360 degrees from the onset of its overall decline (late-April 2015 & late-April 2016, immediately following the ominous Date of Aggression) – took AAPL back to multi-year price support at 92–95.00. To recap:
— The Oct. 2014 mini-meltdown bottomed at 92.00–95.00/AAPL.
— The August 2015 meltdown bottomed at 92.00–95.00/AAPL.
— The January 2016 meltdown bottomed at 92.00–95.00/AAPL.
— The April 2016 mini-meltdown has just reached 92.00–95.00/AAPL.
If it is true that ‘double bottoms hold, triple bottoms don’t’, it is even more likely that quadruple bottoms do not hold. And that is essentially what
AAPL now has at 92.00–95.00/AAPL – a quadruple bottom. That is also the mid-point (~95.00/AAPL) of its 4.5 year trading range – with a lower extreme around 55.00 and an upper extreme around 135.00.
When that support (92–95.00) gives way, an accelerated drop to [reserved for subscribers only] would become much more likely. However, this is not a ‘pick on AAPL’ rant. It is merely to point out more evidence of underlying deterioration that is unfolding in some big names… even as the DJIA – the ultimate ‘smoke-and-mirrors’ Index – retests its Major, multi-year upside targets & resistance at 18,150–18,550.
While AAPL was plummeting, GOOG also dropped sharply (~11%) – after peaking on April 19th. SBUX – though not a tech stock – dropped similarly (~10%) in late-April… all helping to lead a reversal lower in the Nasdaq 100 and cast some renewed uncertainty on that Index.
Of course, it is hard to view the tech sector without looking ‘east’ and wondering what a washout – even just a limited one – in that sector would do for the Asian Indices, particularly those in China.
The Nikkei dropped ~10% in 4 trading days, while the Hang Seng, Shanghai Composite & Shenzhen Composite did not suffer as sharp of a drop.
However, all of these Indices remain precariously close to multi-month & multi-year lows… edging ever closer to the edge of that abyss. In other words, it would only take a little snowball effect – with another minor sell-off – to potentially trigger a larger snowball effect in Asian Indices. And one only needs to look at late-August ’15 & late-Jan. ’16 to see how the rest of global Indices react to that type of action.
So, it looks like many of the ‘ducks are in a row’ for another quick sell-off leading into late-June – the next phase of 5- & 10-month cycles. While all appears quiet on the Eastern Front, it would not take much selling to dramatically change all that… and trigger a new assault on paper assets.
Stock Indices are showing preliminary signs of reversing lower – led by the Nasdaq 100 & tech stocks – initially validating analysis for a late-April–late-June decline.
The NQM peaked on April 19, 2016 – the latest phase of a 19–20 week low-high-high-high-(high) Cycle Progressiondating back to the mid-Oct. 2014 spike low – while holding weekly 21 MARC resistance.
Most of the other Indices also peaked on April 19th or 20th – in perfect unison with the Date of Aggression. Those highs occurred ~90 degrees from the Jan. 20th spike lows in so many Indices… as well as the latest phase of the DJIA’s 24-week high (Dec. ’14)–high (May ’15)–high (Nov. ’15)–high (April 18–22, 2016) Cycle Progression.
With that peak, the S+P completed a textbook example of wave (duration) equality, creating successive 10-week advances. That was/is expected to spur an initial drop into May 16–20th. The NQ-100 triggered a daily 2 Close Reversal sell signal on April 19th & a weekly one on April 22nd – reinforcing this.
On a near-term basis, the Indices have sold off for the first three days of the new month – and into mid-week – after the DJIA & NQM tested and held weekly HLS levels last week. The DJIA & ESM are seeing their daily 21 MACs flatten… but not yet turn down.
All of those factors show that the Indices are at a decisive juncture for the 1–2 week trend. In order to escalate the recent declines, the Indices would need to turn their new intra-month trends down – with daily closes below [reserved for subscribers only].” [Refer to May 4, 2016 Weekly Re-Lay Alert for specific downside price target for potential meltdown, later in 2016.]