Last quarter market pillar AAPL missed sales for the first time in years and Mr. Market busted out his paddle and spanked 'em good. Like 3.5% beatdown. This doesn't seem like that big of deal until you realize Apple is a market onto itself with a ~$3 trillion market cap. I actually just accidentally typed billion instead of trillion, you know, like most other companies. My bad. Apple probably has $3 billion in petty cash.
I digress.
I care not for Apple, but I care a whole lot about everything else and I have always believed "As Apple goes, so goes the market". So I got out' me trusty pencil and paper and drew this 3 month chart showing all that's happened since the last earnings report. Split it down into 1hr bars. On a side note, can you even imagine drawing these things out by hand? Holy crap. You'd likely learn the subtle nuances of price action extremely well as you arduously printed each friggin' candle by hand until your fingers ached. I'm pretty sure I'd go clinically insane somewhere along the way. Or become an alcoholic. Or my ADD would kick in and I'd have a lot of half-assed charts laying around along with the empty beer cans and dull pencils.
Speaking of that ADD... I digress. (again).
First off, I don't have SPX (S&P500) overlayed on here for the sake of clarity, but if I had you'd see that both Apple and SPX peaked at precisely the same time. Like to the hour. Coincidence? Nope. Secondly, see those red rectangular areas I highlighted? As evidenced by the built-in Fixed Range Volume Profile you can see the areas where the volume was low.....and these coincide with rather strong resistance zones.
So Apple's price may stay locked in between the $157-$167 zone for a bit. If it does manage to break out above $167 it may do exactly like it did last time and go to $182. Will it? The fate of the mature bull market may hinge on it. This tired old bull is getting to be quite long in the tooth and her time's-a-comin'. Does she get put out to pasture, or does she have one last rodeo in her?
I think that depends on Fed chairman Jerome Powell and Apple. These two entities likely control the fate of the entire market.
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Well, 1 outta 2. Apple nailed it. Jerome mailed it. Fed is obsessed with inflation (I can't blame them) and it is going to continue to create massive headwinds for the markets as they reverse course.... the Fed is no longer Mr. Market's friend. We could be looking at a slow descent for most of the first half of 2022 as volume stabilizes and the new trend takes root.
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BOOM GOES THE DYNAMITE! Apple goes thermonuclear and drops a 7 banger on us. 7% of a company valued at ~$3 trillion? Let me get out me abacus..... that's like $210 billion they jumped today. Not bad for a day's work.
Anyhow, I was entirely correct in Apple being a catalyst and the Nasdaq popped 3% today as Apple sucked the whole market up. Will it last? It might... for a while. Until the Fed hijacks investor's amygdala again and we resume running around like chickens with our heads cut off.
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Notice that Apple basically gapped up through the resistance zone via the strong earnings/guidance release. This zone may well provide support now as it has in the past when Apple leapfrogged over it. Apple doing well is a very good sign for all bulls market-wide.
Mega cap tech still working, as we have also seen with MSFT. These are the companies that have given us 10x over the last decade. I don’t trust the bounce on other tech with no earnings though. Good luck.
AlphaBravoCharlie77
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Thanks for the update!
cerealtrades
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AAPL is certainly one of those stocks that leads the market. everyone said this earnings season would be bad, and theyve been right so far. i have a slightly bearish bias for broader markets, and in a sort of reverse logic i think this means red for aapl, while red for aapl means red for indices. this is a good idea, and if i bought the bounce i would be looking for the exit.
cyberluck
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it will drop another leg down for 5 waves down. then recovery or at least a B wave if the correction is deeper.
AlphaBravoCharlie77
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Pencils? At least it's not brush and ink like the Japanese traders in the 18th century. hahaha