akoptiontrader

Now I know you sad sacks won’t believe me, but when Steve Jobs first came out with that hormone imbalance thing and the market rallied, I told C21 I didn’t believe him. To me it was the typical soft landing type of statement, the kind meant to let the stock down easy. Today, I believe him even less. I have a hunch we may never see him at the helm of AAPL again. I think that is not good for AAPL, maybe not technically or logistically, but via perception, and in our world perception is everything. That is what I do every day on this blog, I study the perception of the mkt. I pay some attention to fundamentals, but what is important is perception, because that is what motivates buying and selling. Perception – Economy Bad, No recovery in sight = sell. Perception- New president will fix everything, make more money= buy. Reality does not matter until it catches up to us like it did in the tech bubble and the housing bubble. Our perception was that it was going to last forever, reality finally caught up and she smacked us right upside the right side of the chart. So let’s see what our perception is now.

VIX is showing fear, with a small pull back late in the day. It took off like a rocket today. I have a new gray rectangle of death, once inside I look for a reversal. I don’t think we will move straight up into it, but I think we test it eventually.So much for my bear flag from yesterday eh?

So we now have 6 down days in a row with increasing v. That my friends is very bearish, along  with an increasing VIX that is retest the lows bearish. We need to see the v continue to increase to confirm this. You can see we blew the doors off some strong support.

So the last time we had 6 down days in a row with increasing v, the 7th day was the reversal day. The only difference, those were 7 huge moves down. However, percentage wise we are not much lower. I would not be surprised to see the same here, maybe a huge scary sell off followed by an intraday rally.

The S&P, more of the same. Blew through strong support with the next one at the around 810. We could blow right back up above this last support, that would not be uncommon. Note the furious v on the e-minis. OUCH!! Most of that due to AAPL news. Let’s see if that support line holds. Methinks we may slide down it a little. 

SPY, shows increasing v with the down move, bearish, but not crazy v. You can clearly see the bearish divergence on the v and the up move prior to this last drop. We had a little rally today to finish off lows, but I would feel better about a rally if we touched 82.50 first. 

NAS, much the same. Blew through the floor and searching for some more floor. Note both this and SPY sitting on bbb, which should offer some support. Still indicators pointing down, they are just getting warmed up. 

The Qs, love the Qs. I closed out my puts today for an excellent profit, and I even left some profit on the table, not on purpose of course. To me, this chart has support all over the place, but it doesn’t seem to matter. I have been playing it using short charts for the most part. I would not be surprised to see a reversal tomorrow, after some down move caused by selling of AAPL, which is down 7% after hours. If aapl hits 80, I may actually play calls on the Qs tomorrow, that felt weird to type. If we gap down, like I think we might, I will be waiting for a reversal sign to see if I can’t sneak some quick up action. Not recommended for the faint of heart.

Let’s finish with some X play, three charts in a row, all pointing downward.

XLE, small trading range nearing bottom. Note you cannot just play it off the support, must wait for conformation of reversal.

XLV, broke through up trend, indicators pointing south v increasing and a bit of indecision today. Would love to see it touch trend line and then sell er short. 

This one is purty. Might be my favorite one of the three right now. Hit bbb and rallied back up to line, should  turn down again unless it breaks through trend line.

In closing: My first scenario, open down and cruise down fast, then rally back up just as fast, finishing near the open on either side. Next scenario, gap down and continue down and hold. Third scenario, all others. No matter what I think may happen or what I see onthe charts, the mkt. will do what it wants, our job is to make $$ off of it. I pray healing to Mr. Jobs, but I realize perception is all that matters and I predict we start to see stories, blogs and rumors of a much more serious sickness than we were first told. Also, I have noticed a perception that 2009 may not be the recovery year everyone hoped it would be. Trade watching for a quick reversal and prosper. AKOT