Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Wednesday, October 17, 2012

Sentiment EMAs Lifting

Stock Market Technical Analysis Blog

Click on image to enlarge

After three days of upward movement in the market we can see the red EMA lifting on the DOW, S&P, and SPY shown in the top row of the daily charts above.  In the fourth chart of the top row above we can see that the first three charts have produced enough lift to keep the red EMA on the VIX from crossing to the top side - an event that will kick the market into sell mode.  As I mentioned in Monday's blog they had to keep the sentiment EMAs rising this week and next week in order to produce confirmed lift in the weekly 5/10 EMAs shown in the middle row above.

So far so good, the upward movement has continued three days in a row which is something that hasn't happened in a while.  Yet there is a pink elephant in the room that everyone is trying to ignore but all eyes should be monitoring AAPL's breakdown shown in the bottom chart.

Yesterday AAPL's price bar hit resistance at the merged pink 50 and blue 20 EMA lines.  Today AAPL's price was not able to break above the two and dropped back down.  This is a huge pivot point for AAPL.  If they can jam AAPL here over the next several days it will produce a blue 20/ pink 50 layup which was what produced the June through September rally.  If AAPL loses it here it will have a blue 20 / pink 50 down cross which could easily take AAPL down to last June's prices.  They have two, maybe three days to get their act together on AAPL and make the 20/50 lift start happening.  If they cannot pull it off, well heeled shorts will be shorting AAPL with both hands and both feet.


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