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What Apple’s (AAPL) Technical Breakdown Means For The Market

Daily Update May 12th

5/12/2016 – A mixed day with the Dow Jones up 11 points (+0.06%) and the Nasdaq down 24 points (-0.50%) 

Just prior to Apple’s (AAPL) earnings, a few weeks ago, I have suggested that Apple’s stock price was building a perfect wedge pattern. Here is that article/chart Apple (AAPL) Hits An Important Technical Juncture – What Will It Do Next?

apple wedge

And that is where it gets interesting.

Earlier today Apple’s stock price took out an important wedge support level located at around $92 a share. Not by very much, by about $2.50, but the break was important enough. It suggests, once the stock price follows through, that Apple’s stock price has quite a bit more downside ahead. To the tune of $40-50 per share if we take typical wedge pattern characteristics into consideration.

Impossible? 

About a year ago, Twitter (TWTR) had a very similar setup. I wrote about it here Why Twitter (TWTR) Should Go On Your “Stocks To Short” List and here Twitter (TWTR) Is Breaking Down. Is Social Media On Death’s Door?

Here is that chart. Please note, once Twitter broke below wedge support, something Apple did today, it proceeded to collapse over 50%.twitter new chart

And this is where it gets even more interesting. No one cares about Twitter and everyone cares about Apple. You can say that Apple’s (AAPL) stock price is the existential representation of the overall bull market from 2009 lows. And as I have said so many times before, as goes the Apple, the market will follow.

Can today’s technical breakdown be repaired?

Most certainly, but I must be honest, recent price action doesn’t look good for Apple’s stock price. Nor for the overall market.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years.  If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. May 12th, 2016  InvestWithAlex.com

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

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Year End #9 – Smart Money Is Still Distributing Apple (AAPL) To Fools

Daily Chart ANovember 19 InvestWithAlex

11/19/2015 – A flat day with the Dow Jones down 4 points (-0.02%) and the Nasdaq down 2 points (-0.03%) 

The original post was published on May 21st, when Apple’s (AAPL) stock price was putting in an important all time high (double top). At that time I have suggested that smart money was distributing the stock. Apple’s stock price is down about 10% since then.

It appears nothing has changed. If anything, big guys are trying to unload at a faster pace. This Goldman Sachs analysis was released just a few days ago.  Apple’s shares are going to soar 43% Sure, and I am nominated for a Nobel Prize in literature.

That is to say, don’t be a pawn in their game. My view on Apple hasn’t changed. 

A few weeks ago Apple (AAPL) has reported yet another great quarter. Yet, despite the outperformance, Apple’s stock price is barely up. So much so that most investors, market pundits and money managers are dumbfounded by company’s recent decline.  After all, it was not supposed to happen. Apple is the best performing company in the world (which is technically true) with like a zillion dollars in cash on their balance sheet.

What gives? I will simply repeat here what I first said on May 21st. When AAPL was putting in its top.

May 21st Update: Alert: Smart Money Is Trying To Distribute Apple (AAPL) To Fools

I firmly believe that the overall market and Apple (AAPL) will crack at the same time. Hence, overwhelmingly bullish coverage of the company and recent analyst upgrades should cause some concern. For instance…..

There is another name for all of the above. Distribution. The smart money is trying to unload their massive positions to unsuspecting retail investors in an illiquid market. A game that is as old as the stock market itself.

Listen, I don’t have anything against Apple. It is one of the best performing companies out there. Yes, it is overvalued, but its valuation is not as bad as some of the junk floating in the market today.

I am merely pointing out that retail investors shouldn’t be sucked into a game that they cannot win. Make no mistake, once Icahn, Morgan Stanley and the rest of the big guys unload their long positions (if they are smart), Apple’s stock will fall like a brick. Just as the market will. That is to say, the opportunity with AAPL might be on the short side of the trade, not the long.

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Year End #9 – Smart Money Is Still Distributing Apple (AAPL) To Fools Google

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Why You Should Never Disclose Your Trading Position

Apple InvestWithAlex

I always pay attention when somebody, big or small, begin to run around yapping about their stock position. But not in a positive way. I am always interested if there is an opportunity to take the other side of the trade.

Let me give you an example. A few months ago some guy was running around in various public forums and screaming at the top of his longs that Netflix (NFLX) was going to collapse based on his fundamental research. Not only that, he was so confident that he wasn’t shying away from disclosing his massive Put Option position. As accurate as his fundamental analysis might have been, Netflix did the exact opposite, staging a massive rally. Gaps included. I can only imagine that the person in question was whipped out in a matter of minutes.

Here we go again,  The last time Apple did this, it rallied 55%

Sure, the chart above can be interpreted as “base building” before the next push higher, it can also be interpreted as “distribution”. It is anything but strong. And just because that’s the way it worked out last time, doesn’t mean it will play in the same fashion again. Plus, there is this, Alert: Smart Money Is Trying To Distribute Apple (AAPL) To Fools

In the final analysis, don’t ever disclose your trading position. It rarely pays off.

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Why You Should Never Disclose Your Trading Position Google

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Why Apple (AAPL) Watch Will Be A Disaster

While Apple’s growth remains incredibly strong for the time being (iPhones, iPads, etc..), I have a few questions for Apple (AAPL) investors…..

  1. How long before investors realize that Apple Watch is a complete failure?
  2. Further, how much of a haircut will Apple stock get once investors realize that Apple’s innovative drive died with Steve Jobs?

Apple Watch….give me a break. Watch the video below. While intended as a promotional piece, it outlines every single reason as to why most people will not get it. Conversation starter….good at filtering……sure, and some guy from Nigeria just told me that my dead uncle left me $25 Million.

But you have got to give it to Apple’s PR machine. Apple Watch reviews don’t matter to early adopters and Apple says smartwatch demand to exceed supply at launch. Real world translation, outside of a few geeks, Apple diehards and hippies, very few people will get Apple Watch.

Finally, as soon as all of the above becomes evident, how much of a haircut will the Dow Jones (recently added Apple) get?

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Why Apple (AAPL) Watch Will Be A Disaster  Google

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What You Ought To Know About Apple (AAPL) Dragging The Dow Down

aapl on dow

I continue to be amazed at how our 3-Dimensional reality works behind the scenes. For instance, the chart above illustrates what the Dow would have looked like today if Apple (AAPL) was added to the index back in February of 2008. The Dow would be at around 22,500 and Jeremy Siegel would look like an absolute genius that he is.

Here is the thing. The Dow has an incredibly strong mathematical structure that moves the index behind the scenes. This structure has been in existence since May 20th of 1790 and it hasn’t been broken since. This same math suggests that it would have been impossible for the Dow to be at that level today. In fact, we won’t see it until we hit the year 2021. Hence, Apple was skipped in 2008 and the Bank of America was added instead.

Now that Apple (AAPL) is the company with the biggest market cap, significant overvaluation, too much competition and no exciting new products in its pipeline (hello Apple Watch)……..I believe the company will help drag the Dow down. In other words, Apple was added to the Dow Jones just in time for another bear leg to begin.  Amazing multidimensional reality is once again displaying itself in our limited 3-Dimensional human perception.      

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What You Ought To Know About Apple (AAPL) Dragging The Dow Down  Google

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Is Apple Running Out Of Ideas?

apple-watch-investwithalex

Apple Watch is the future…..seriously??? One can argue that Apple’s stock price has been driven higher in anticipation of Apple Watch. Well, that in addition to Apple’s blow out quarterly results. However, there is a real reason to believe that Apple Watch will face a disastrous launch. Here is why….

In addition to a lot of competition, here is my common sense analysis. Outside of geeks and hipsters, I don’t think many people will get  Apple Watch. It just doesn’t make any sense in terms of applicable use. Medical applications aside, I just don’t see the need to have two internet devices on ones body, when one of them, the phone, being by far superior to the other. Plus, very few people wear watches this day and age.

I did see the potential of iPod, iTunes, iPhone and iPad. I don’t see it with iWatch. And while I might be proven wrong, I don’t see many people texting or emailing from their watches. It’s not applicable, the screen is too small and the process is, to be frank, idiotic.

The final question is, if Apple’s Watch fails as a product, how much of a haircut will the stock price get. We might find out soon.

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Is Apple Running Out Of Ideas?  Google

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Is Apple (AAPL) and Tesla (TSLA) About To Crash? Some Big Players Think So

Tesla forecast

Bank of America believes Tesla (TSLA) is about to collapse. Bank of America is predicting a massive Tesla collapse

Very quickly, it would be wise to pay attention to this analysis. As I have suggested before, Tesla is highly speculative, massively overvalued and their is no guarantee that the company will succeed in their overall mission. The competition from big automakers is catching up fast. The technicals support B of A assessment and high flyers such as TSLA tend to perform poorly in bear markets. An exact environment we anticipate.

Also, Germany’s Berenberg Bank German Bank Predicts Apple Stock Tumbles Over 50% As Shares Roundtrip To $60

Let’s use a different kind of financial analysis for Apple (AAPL). Let me tell you a short story first. In December of 2002, Apple’s valuation stood at $15 Billion. It is at $750 Billion today. Here is the point I am trying to make. If I would have told investors 12 years ago that Apple would be selling at 50X most recent price, I would have been laughed out of the building. By most investors. Reverse the situation today and you might have your answer. Plus, remember one simple truth when it comes to investing. Everyone loves a certain stock only until no one does.

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Is Apple (AAPL) and Tesla (TSLA) About To Crash? Some Big Players Think So Google

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Hey Buddy…..Wanna Triple Your Money?

apple car

Here is a FREE stock tip. Buy Tesla (TSLA) today at incredibly speculative valuation of $25 Billion and sell it to Apple (AAPL) 18 months from now for $75 Billion. At least according to Jason Calacanis. Don’t believe me? Here is the analysis.

Perhaps Jason is right and Apple will buy Tesla at such a premium and you will be able to make a relatively quick 200% return on your money. It’s a crazy world after all and Apple certainly has the cash. But maybe, just maybe, this is an indicator of how out of sync with reality most investors have become.  I have a feeling that an upcoming bear market will cure this problem.

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Hey Buddy…..Wanna Triple Your Money?  Google

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Is Apple (AAPL) Really Worth $1 Trillion?

aapl

Apple (AAPL) has been on a tear since reporting its earnings. It broke above its previous resistance levels of $115 – $120 and the stock looks unstoppable. Further, everyone believes that AAPL is a strong buy and that the company is worth at least a Trillion. Consider the following.

While I don’t typically bet against Carl Icahn, you might want to be very careful here. Here is why. As illustrated above, the overall bullish overtone on the stock is excessive. And if I had a penny for every “no brainier” investment that went sour, well, I would have a lot of pennies.

Would Apple be properly valued at $1 Trillion? That’s debatable. There are a lot of people who believe that Apple is worth a lot more. As Carl Icahn does. Then there quite a few people who believe that Apple is excessively overpriced here. Pick your medicine. Finally, should a bear market develop as anticipated, it is highly unlikely that AAPL will be able to maintain today’s levels. In other words, Apple might be at or near its top.

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Is Apple (AAPL) Really Worth $1 Trillion? Google