Just a couple more general observations here on $AAPL, since it’s so important to the market and is at such an important spot. It now resides under its channel (green) and within a downward-sloping set of rails (orange):
As of yet, it’s not a clean rejection of the channel that I was concerned about yesterday. I was worried about a strong gap down today, and meh, we didn’t do that. It’s not a forceful push away from the channel, and hugging it like this isn’t very threatening at the moment.
Zooming in we can clearly see the Wyckoffian nature of the consolidation:
This is, as always, either accumulation or distribution. To my mind, “the public” seems very bearish to me. And I would expect them to be the sellers here. But, I can’t know that for certain. If, contrary to what I can see, people are rabidly trying to buy the dip, then we would have to suppose that bags are being filled.
Nevertheless, I think the economy is still in reasonable shape, and I doubt the market has topped. And if I were an institutional player, and I wanted to accumulate Apple, I would probably poke it out of this channel, too, if I could, to give people a good scare so that I had more supply to absorb. If I wanted to distribute, I would probably run it up higher and make people bullish first, not dump it this low like this.
[UPDATE]: I just want to add one more “fact” to these (after I originally posted this article): This local consolidation is sandwiched below the 250-day EMA and the 60-week EMA. So, while some will see support of the daily EMA “lost,” it’s actually still being supported by a much longer-term EMA here.
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