Behold, the Structures on Tech: $AAPL, $GOOGL & $MSFT

This has been a shit show. But, I’m feeling very optimistic tonight. It’s been very difficult looking for the low. However, in reviewing things this weekend, I am amazed by how many individual names made higher lows while big tech made new lows. That is very bullish, for the markets to support less important names like that. And in virtually all of the cases where those higher lows have been made, the rallies have been impulse waves.

For example, let’s look at $ADBE, which I have just added to my “Other Selected Counts” page. A beautiful, 5-wave impulse up, and a clear 3-waves back. The rally up from the 5/12 low had no overlapping waves, and with the rally today, the move since the 5/17 high now has overlapping waves. So, it’s an impulse up and a correction back. That means the trend is now up.

ADBE

Dozens and dozens of names are like this across the board. I’ve handled this correction poorly, but in reviewing long-term counts, in many cases, this a correction is of cycle degree, and in some cases, even of supercycle degree. And getting the feel for just how “big” those should be is difficult until you’re through them. And now I think we’re through them and boy, those were big.

But, looking at tech, I see in many cases, massive parallel rails everywhere.

$GOOGL, saved at parallel rails:

GOOGL

$AAPL, parallel rails:

AAPL

$MSFT, parallel rails:

MSFT

Parallel rails are not threatening. They make bull flags after all. And, I know, I’ve prematurely anticipated bullish wedges (e.g., here), which then turned out to stretch their legs into these flags, but my worry is that we can reverse hard at any moment and I don’t want to chase into higher prices. To get a good trade on very low and very early pays huge dividends down the road in a trending move, especially given the leverage of options. I want to start the options roll-ups early right at the first wave, not in the middle of the third ones.

Looking for and insisting on lower prices here these last couple of weeks seems—to me—to be much like looking for new highs on Tesla in December of 2020. Yes, higher prices did keep coming, but then, all of a sudden, down she went, 40%. So, yes, lower prices have kept coming here, but once we see the rally I think is coming, I hope that keeping the discipline of looking up here will have proved itself useful. If one has the mindset of looking to sell every rip at a market turn, one will lack confidence to stay long in a powerful thrust.

At any rate, these structures are huge, have been a real pain in the ass to assess bottoms for—especially given my fear of such one-sided trades—but I think we’re there. We have everything we need in place. Lots of things count well here, and I’m glad to finally see so many impulse waves off of lows. Sentiment is, of course, what we see at very long-term bottoms (GFC, COVID, etc.).


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