... Just want to clarify - ” There is no reliable way to determine when wave 1 would be completed or how much wave 2 would retrace” what’s unclear regarding wave 1 is *when* it’ll stop, right? Or is it even unclear if this is wave 1 at all? Thanks in advance!
Confirmed is wave 1 since breakout above $202.96. Just not sure whether it would complete normally at $216 or next possible target $235 or even higher target $268. At this point, I’m confident to say that AAPL would hit $300 some time in 2010 provided no Black Swan appear. If we can sell at the peak of wave 1 and buy back at the bottom of wave 2, return would be at least more than 50% of buy n hold (through wave 2 decline).
Edit: Trend following system indicates that AAPL is still trending up.
Confirmed is wave 1 since breakout above $202.96. Just not sure whether it would complete normally at $216 or next possible target $235 or even higher target $268. At this point, I’m confident to say that AAPL would hit $300 some time in 2010 provided no Black Swan appear. If we can sell at the peak of wave 1 and buy back at the bottom of wave 2, return would be at least more than 50% of buy n hold (through wave 2 decline).
Edit: Trend following system indicates that AAPL is still trending up.
Lastly, max pain thesis. Have been closing above max pain on OE for the past few months.
That’s certainly great to know, thanks again Mace
The only thing that’s somewhat worrisome from the weekly chart is the RSI - we haven’t seen RSI staying above 70 for so long since our last bull run beginning Mar 07
In any case, I think it will be prudent for me to take profit (from my loooooong under water $200 Jan 10 calls that I bought in early 2008) when AAPL hits around 215… In any case, thanks again!
...
b. This week, $185.55 to $208.71 is an impulse. Typical retracements are:
14.6%=$205.33 (min for a wave four type of retracement)
23.6%=$203.24 (min for a wave two type of retracement)
38.2%=$199.86
61.8%=$194.40
Any price lower than $195, is likely that a higher degree impulse is being retraced.
Has begun praying that $194.40 won’t be cracked. AAPL rebounced after hitting 50% ret=$197.13.
Max pain thesis: So long AAPL closes above max pain on OE Friday, AAPL is in a multi-month rally. It usually closes near highest OI (calls) when in multi-month rally and near highest OI (puts) when in multi-month decline.
Max pain (Nov)=$195 up $5.00, max pain (Dec)=$200 and max pain (Apr)=$185
Current pain=$195 drops $5.00
Highest OI (Nov calls)=$210 and OI (Nov puts)=$185.
Highest OI (Dec calls)=$220 and OI (Oct puts)=$180.
Highest OI (Apr calls)=$210 and OI (Apr puts)=$150.
Comment: Let’s hope AAPL would close near highest OI (Nov calls) on OE.
EW: LoD so far is $195.36, almost 61.8% ret of $185.55 to $208.71 impulse. Continue to pray that $194.40 holds.
Max pain thesis: So long AAPL closes above max pain on OE Friday, AAPL is in a multi-month rally. It usually closes near highest OI (calls) when in multi-month rally and near highest OI (puts) when in multi-month decline.
Max pain (Nov)=$195 up $5.00, max pain (Dec)=$200 and max pain (Apr)=$185
Current pain=$195 drops $5.00
Highest OI (Nov calls)=$210 and OI (Nov puts)=$185.
Highest OI (Dec calls)=$220 and OI (Oct puts)=$180.
Highest OI (Apr calls)=$210 and OI (Apr puts)=$150.
Comment: Let’s hope AAPL would close near highest OI (Nov calls) on OE.
EW: LoD so far is $195.36, almost 61.8% ret of $185.55 to $208.71 impulse. Continue to pray that $194.40 holds.
Looks like we’re going to find out if 194.40 holds momentarily. LOD right now 194.36.
Max pain thesis: So long AAPL closes above max pain on OE Friday, AAPL is in a multi-month rally. It usually closes near highest OI (calls) when in multi-month rally and near highest OI (puts) when in multi-month decline.
Max pain (Nov)=$195 up $5.00, max pain (Dec)=$200 and max pain (Apr)=$185
Current pain=$195 drops $5.00
Highest OI (Nov calls)=$210 and OI (Nov puts)=$185.
Highest OI (Dec calls)=$220 and OI (Oct puts)=$180.
Highest OI (Apr calls)=$210 and OI (Apr puts)=$150.
Comment: Let’s hope AAPL would close near highest OI (Nov calls) on OE.
EW: LoD so far is $195.36, almost 61.8% ret of $185.55 to $208.71 impulse. Continue to pray that $194.40 holds.
. LoD so far is $195.36, almost 61.8% ret of $185.55 to $208.71 impulse. Continue to pray that $194.40 holds.
Blew right through 194.40.
. Permabull’s view is today’s price behavior is an ending diagonal with LoD, $191.10, just above 78.6% ret, $190.50 (Edit: AH, AAPL hits a low of $190.57). If true, should begin rally from here.
wave one=$185.55 to $208.71, length=$23.16
wave two=$208.71 to $191.10, ret=76%
wave three=
1.00 of wave one=$214
1.618 of wave one=$228
If AAPL continues to decline tomorrow, the gap up after earnings is likely an exhaustion gap. That is, wave 1 is completed.
wave 1=$82.33 to $208.71
wave 2=
min ret=23.6%=$178.88 .
norm ret=61.8%=$130 .
Max pain thesis: So long AAPL closes above max pain on OE Friday, AAPL is in a multi-month rally. It usually closes near highest OI (calls) when in multi-month rally and near highest OI (puts) when in multi-month decline.
Max pain (Nov)=$190 dropped $5.00, max pain (Dec)=$195 dropped $5.00 and max pain (Apr)=$185
Current pain=$195 dropped $5.00
Highest OI (Nov calls)=$210 and OI (Nov puts)=$185.
Highest OI (Dec calls)=$220 and OI (Oct puts)=$180.
Highest OI (Apr calls)=$210 and OI (Apr puts)=$150.
Comment: Likely that AAPL would close near max pain rather than highest OI (calls).
EW: AAPL is retracing an impulse of higher degree than the $185.55 to $208.71 impulse. Likely that it is retracing wave 1. Min ret price target is 178.88. Looking at hourly chart, the likely scenario is decline to $188, dead cat bounce to $192, resume decline to $178.88.
Mace, what general timeframe are you talking about here? Days/weeks/months?
In general, I talk in multi-month. The decline to $178 should happen within 10 days. I guess that from Jan 06 price behavior. IMHO, position traders should not go long here. Note that AAPL is in a declining channel from $208.71. AAPL hits the upper channel line at $196s, where I sold 1,000 AAPLs, and fell hard today. EW-wise, $208.71 to $188.17 is a bearish impulse which I believe is a of a of A of wave 2 (abbr as 2.A.a.a). So expect a 2.A.a.b (dead cat bounce up to $196, likely only $192), then 2.A.a.c (decline to $178), upon completion of 2.A (most probably around $160) is a B-wave (suckers’ rally up to $180), then a C-wave (this is bad, can be as low as $122 by Apr 10). Above if AAPL is behaving similarly to Jan 06 to Jul 06.
Mace, what general timeframe are you talking about here? Days/weeks/months?
In general, I talk in multi-month. The decline to $178 should happen within 10 days. I guess that from Jan 06 price behavior. IMHO, position traders should not go long here. Note that AAPL is in a declining channel from $208.71. AAPL hits the upper channel line at $196s, where I sold 1,000 AAPLs, and fell hard today. EW-wise, $208.71 to $188.17 is a bearish impulse which I believe is a of a of A of wave 2 (abbr as 2.A.a.a). So expect a 2.A.a.b (dead cat bounce up to $196, likely only $192), then 2.A.a.c (decline to $178), upon completion of 2.A (most probably around $160) is a B-wave (suckers’ rally up to $180), then a C-wave (this is bad, can be as low as $122 by Apr 10). Above if AAPL is behaving similarly to Jan 06 to Jul 06.
I agree with your 178 target should selling pressure continue but you never put your thesis of a similar market in the context of how the overall markets compared. We were in a clear up trending bull market through 2006 versus this market is full of deer in headlights.
... I agree with your 178 target should selling pressure continue but you never put your thesis of a similar market in the context of how the overall markets compared. We were in a clear up trending bull market through 2006 versus this market is full of deer in headlights.
Finally, worked out an alternate count for the primary degree wave 1. It is an extended fifth wave impulse.
1.i=$78.20 to $103.00, length=$24.80
1.ii=$103.00 to $82.33
1.iii=$82.33 to $133.50, length=$51.17
1.iv=$133.50 to $121.75
1.v.(1)=$121.75 to $146.40
1.v.(2)=$146.40 to $134.42 - wave 2 usually ends inside here or near 52-week EMA.
1.v.(3)=$134.42 to $188.90
1.v.(4)=$188.90 to $185.55 - wave 2.A usually ends inside here or near 13-week EMA.
1.v.(5)=$185.55 to $208.71
For option traders, if you can figure out when wave 2 ends, you can make indecent gains, something like 30x to 100x by buying calls at the end of wave 2. This is exciting. Anyone want to make a WAG price for wave 2? Or have a good strategy that don’t depend on accurate price forecast?
Since length of wave 1 is $130.51, min price for wave 5 is $289.36. Norm is $419.88.
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$5.00
. LoD so far is $195.36, almost 61.8% ret of $185.55 to $208.71 impulse. Continue to pray that $194.40 holds.
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