AAPL 180.05 –7.63% – AAPL got downgraded to an unconfirmed bearish chart today on a trend line break below that mid-term bearish wedge we’ve been following closely in the recent days. The levels to watch for rating changes as per the current TA conditions are shown on the graph. The 175 line appears to be a very crucial one to hold for this stock to limit the damages on this TA. See the next chart for more evidence of this. This chart is not looking good at all. Can AAPL quickly bounce back up 10% to negate this ugly action of today? Sure it can, it did it in the past and might do it again. But looking at these current conditions, it ain’t looking pretty. Note: W&S means Wait and See.
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GOOG 657 –4.13% – GOOG got also downgraded to unconfirmed bearish. The action was less damaging than for AAPL though so it does carry better odds of a recovery and negation of the trend line failure.
BKX 83.25 –3.34% – Gosh, we’ve been calling for this POS sector to keep going down for months while everybody kept trying to pick bottoms. If feel like a broken record, this sector is in a major downtrend and despite episodes of strong rallies, it will keep going down and down for months until proven otherwise. For the near-term though, the stock got downgraded today to a confirmed bearish after being downgraded to unconfirmed bearish following the failure of the infamous 88 support line of the 88/100 trading range. While BKX was in this bearish consolidation range I had it under a W&S bias. There is a potential bullish wedge in formation, heck, maybe, so we never know though. Got to keep an open mind on this POS partner!?
For a scary idea of how low can BKX go look at possible trajectory below. BKX was not even able to do the 92/95 kiss goodbye kiss before resuming the downtrend and failing 88 support. This chart doesn’t look good on the long-term horizon until proven otherwise. Odds are it won’t be a straight down move as I expecte many strong rallies. Heck, might even get back in the 90/95 kiss zone in the coming days/weeks! The near-term levels to watch are showing on the above chart.
VIX 23.94 +6.45% – VIX has been instrumental to time perfectly all of the market intermediate trend changes over the last 18 months as long-time blog readers would attest. Below is the VIX TA from a recent BPG update dated 11/16. This TA was a great tool to anticipate the Xmas rally and this week’s reversal as you will see on the updated TA later on. Take note of the small zigag pattern on the anticipated path before the breakout above the triangle as we will get back to it.
And here is an updated TA I loaded on the blog on 12/7. VIX bounced below the resistance of the triangle as expected and the market rallied. Take note of the RSI comment in the right end bottom corner.
Below is the updated chart. After a short-term market sell-off in the first half of December which reversed temporarily the second down wave in the VIX triangle, the Xmas rally resumed strongly in the second half and this made VIX fell straight down and stopped where? You got it, right on the triangle’s support line above 18 exactly as expected way back on 11/16 on the chart shown above matching both the anticipated price movement and the time span. See now how the RSI comment on the above chart nicely supported the anticipated turn. Been like this for the last 18 months. ?
The levels to watch are indicated on the chart.
I found very interesting the fact that VIX did not spike up above 25 near-term resistance today on the adverse pre-market news (payrolls, INTC downgrade, Obama’s win, according to Phil not a WS favorite, etc.) and the ugly market action.
This might tell us 2 things :
1. Fear level did not increase much during the market sell-off thus hinting at complacency which supports the thesis that this bear market is indeed in its initial phase.
2. It wouldn’t take much of good news for the market to bounce back up and start another short-term uptrend. An well-timed AAPL upgrade like we often saw on Monday mornings would probably do the trick.
Now if you go back to the first VIX chart and look again at that zigzag below the triangle’s high boundary before the breakout , if this best odds anticipated path continues to be a good guide, it means that the early January market sell-off is about to subsides on the market consolidating and digesting the losses before resuming the downtrend. Or deciding to change TA character completely and start a new bullish phase, heck, we never know, always remaining odds for the other scenarios to happen.
By the way, nobody knows the future and no system can predict it ether. All we can do is to assess the general market conditions, estimate the directional odds and act accordingly but keep on monitoring the action and re-assess the odds if required. If this market changes TA character and turns bullish for the mid to long-term timeframes, I’ll simply dump the 9/13 BPG, replace it with another one, salute the bull and run with it. « Markets are never wrong, opinions often are. « as per Jesse Livermore.
Anyway, today’s action in VIX hints at a coming market stabilization and possible bounce I feel.
But there is a big dark cloud looming on the horizon and this might sent VIX jumping above the triangle’s resistance at anytime. China! More on this later.
