9:50 AM — Technology looks pretty strong today and Apple looks like it’s ready to test it’s first line of resistance at $320. Here’s something I wouldn’t be shocked to see happen. We’re seeing the $VIX come off as indicated on the SPY daily commentary right. There’s a whole host of bottoming indicators in the market. Apple got down as low as $310. Everyone expects Apple to see $300 or $280 this summer. Those are both huge points of support and it makes sense for the stock to at least test psychological support.
But at the same time, the market often-times doesn’t make things this easy. For example, in January 2008 – February 2008 correction, we saw a lot of people waiting to buy Apple at the $100 mark and $90 a share mark. That was the “technical support” at the time. The lowest they got was $115 on an interday basis. In August of 2007, after Apple reached a high of $148 off of July earnings, we saw a big summer correction. Everyone expected Apple to retest $100 a share — as that made a lot of sense at the time — it only reached a low of $111.50. I remember this distinctly, because I actually picked up a ton of short-term options in that $111 -range.
So what i’m getting to here is this. It’s very possible that Apple bottomed at $310. The reason I say this is simply because the market isn’t going to make things this easy for everyone. The two logical places for Apple to go are $300 and $280. Is that going to happen? I think highly unlikely. Either Apple will not make it to $300, or fall below it to 290 and trick everyone who wants to buy at $280. Or scare the living shit out of everyone and let it fall below $280 pissing off basically everyone. I think those are the different ways to see this. I don’t think it’s going to be an obvious, “ok everyone, we’re at $300 support, lets all buy and get rich” type of thing. Time will tell.
10:42 AM — Major accumulation of Apple today off of the FBN securities upgrade. Here is where Apple stands today in relation to the beginning of June. June has been one horrific month for the stock. It opened the month near $350 and has gotten as low at $310 — that’s a $40 point loss or more than 10%. Yesterday, the stock fell out of it’s lower-trend line of the June downward channel. It has since broken back into the channel. Once Apple breaks the upper-trend line, you’ll probably get a retest of $335.00 pretty quickly. See here:
11:32 AM — Apple is bumping against it’s first major resistance here. It’s testing the upper-trend line of it’s June downtrend. A break above that channel can potentially catapult the stock higher. A break above the trend-line probably suggests a move to $335.00. See below:
11:39 AM — Today is now considered a major accumulation day. The market has bottomed on countless number of occasions on major accumulation days. I’ll now be looking to buy pullbacks in portfolios. Click here.
3:00 PM — Ok this is looking very strong. Recently, we’ve seen this same move in Apple before end in failure the monday before the developers conference. But given the accumulation, I think the evidence is getting more compelling that we’ve bottomed. That we’re going to see a major rally in July. Here’s why. We have major accumulation, an all-day buy day, and Apple has broken slightly above the upper trend line. Moreover, this confidence vote in Greece is a climax resolution to a problem for the broader market.
Now this doesn’t mean that we have a full v-recovery underway off of this correction. Instead, it means that the correction could be nearing an end and that after a retest pull-back, this market can be in rally mode. Now everything is very over-extended on the hourly chart. The QQQ and the SPY are both very over-extended. The SPY is more over-extended than it has been since early February. That’s nearly 5-months ago. This over-extended indicator I look at has a +90% win rate. Meaning, if you short when the market is over-extended or go long when the market is over-sold based on this indicator, you generally win 90% of the time. What I mean by win, is you will be able to either cover a short or sell a long position for a win within a few days.
So at this point, I’ll be buying pull-backs in the Bullish Cross model portfolio. Notice that in this portfolio, we’ve taken a position in Apple at $312.50 and at $320.30 on the QQQ at $53.88 and on Caterpillar (CAT) at $95.83. All are up quite substantially. On CAT, we’re already up 6.0%. This model portfolio is going to do a great job versus the market. If I was running a hedge fund, this portfolio is probably what I would be doing for the main capital 75%. The SPY model and the Apple Investment thesis model would probably account for 25%. Here’s where Apple stands right now. Notice it has broken its upper trend-line: