1. Long SPY 10,000 Shares @ $137.00 in the SPY Model Portfolio.
2. Long SPY 4,250 Shares in BC Long-Term Portfolio @ $135.90
MODEL PORTFOLIOS CURRENT POSITIONS
1. The Bullish Cross Apple Model Portfolio
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2. The Bullish Cross SPY Model Portfolio
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3. The Bullish Cross Long-Term Portfolio
Please see the portfolio.
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4. The Apple Common Stock Model Portfolio
1. Apple Long-Term Position: 1,175 shares x $451.71 = $530,759.25
2. Apple Trading Position: None.
Cash = $588,326.90
KEY POSITIONS ON WATCH
Positions “On Watch” are those positions which we are considering. It doesn’t mean we are taking these positions for sure. We are just entertaining the idea.
1. The Bullish Cross Apple Model Portfolio
2. The Bullish Cross SPY Model Portfolio
3. The Bullish Cross Long-Term Portfolio
4. The Apple Common Stock Model Portfolio
THE LIVE BLOG 9:30 AM – 4:00 PM
3:30 AM — Good doom and gloom morning to everyone. Good to see the futures up, and yes we’re still in the absolute nightmare of Apple sitting at $540 a share and trading at a 12.2 P/E ratio with only two months left before I blow my brains out.
But anyways. Let’s talk about where things stand and where we need to go from here. So far Apple has essentially traded sideways ever since having that capitulation-type day down to the low $530′s a share. We have tested the $530 area on four days now. And in each day Apple has held its ground well. Right now, Apple is still sitting under a 30-RSI on the 14-day chart which is encouraging. Moreover, the NASDAQ-100 is sitting at, near or under a 30 RSI when I lasted checked. Which like Apple, tends to be a very solid indicator for an incoming rebound. Apple happened to also close at a 26 Chaikin Oscillator. Now that’s not super extreme or anything, but it is still consider oversold. With being down here at a 28.19 RSI after hitting a low-point close of 24.33, the hope is we will now experience the aftermath of that between now and January expiration which is just a little more than two months from now. Remember, most Apple recovers are v-shaped recovers and there is far more time between now and January expiration than there was between the time it took for Apple to fall from $705 down to $530. Just keep that in mind. Most other recoveries were v-shaped recoveries. I think it’s more important for us to see Apple make a recovery to $640 to $650 by the mid-to-late December than to get all the way up to $700 by January. A $650 mid-to-late December rally would be plenty enough for us to make transitional trades. So here is where Apple stands in terms of its RSI:
On top of being so extremely oversold on the daily 14-day RSI, Apple is still deathly oversold on the 7-day RSI. That one is also very important when it gets to extremes. Whenever you see extremes on that, it’s typical an indication that things have gone a little too far:
And of course, in spite of the sideways action we’ve seen the past few days, Apple still is sitting at an extremely low Chaikin Oscillator on the daily chart. Notice that this is typical one of of the more reliable signals for Apple:
On the 5-minute chart, this is what we have going on. Remember, symmetrical triangles tend to be continuation patterns, but don’t have to be. Meaning, this one can break up. We’ve seen plenty in up trend end those up trend-ends and we’ve seen ones in downtrends bottom the stock. It’s just not typical. But given the extraordinarily oversold conditions on the daily, it wouldn’t surprise me to see this one break to the upside. Apple closing above $580 this week would be a huge success for our $655 – $705 predicament. A close above $580 this week would surely set Apple up to re-take the $600 level next week and that would give us 3-weeks to get even a small window of opportunity near $650 a share. You get that opportunity, 90% of you need to take it and transition out of your $655 – $705 spreads. In fact, don’t wait for me to tell you. If you see Apple break through $600 a share and your spreads start to become very reasonably priced, then get out if you can’t stomach it any longer. Personally speaking, if I see Apple run to $650 by mid-December, I’m sticking it out. I didn’t play russian roulette just to get no reward in the end. If I’m getting put through the ringer, I’m collecting. But that’s just me. For you, you need to move on if Apple gives you that opportunity at $630 to $650 by mid-December.
Finally, under the circumstances that we’re in, just remember to chill out a bit and listen to Slow Life.
10:05 AM — Apple is starting to move with the market whether it’s over or under performing. So you need to keep an eye on AAPL, the SPY and QQQ. When you see Apple tick down a few dollars, it’s not because of Apple per se. It likely is because the market has just ticked down. And vice-versa. But we are starting to see some outperformance by Apple. Again, we just need to first get the bleeding to stop. Once that happens, Apple will set the stage for a larger recovery and quickly.
I just cannot be in the position to entertain every worst fear that everyone has here. That’s why I run a Bullish Cross live. To post what I think is going to happen. “But what if’s” isn’t going to cut it. Really, I cannot be in that position.
First, I’ve told everyone here at least 1,000,000,000,000,000,000,000x now Apple today is not comparable to Apple in 2007-2008. In 2007, Apple had $3.93 in EPS. Today Apple has $44.15 in TTM. The company is 11x larger. It is not the same animal. It would have responded differently to financial crisis and it would have trended different with different volatility. That’s why it’s very rare for me to go back to that era if ever.
So if you ask me, Andy back in 2006… you’ve already lost me. So don’t even start a sentence like that. Next I’ve already outlined what I think is going to happen. I think Apple is going through a bottoming process right now and then will see a big rebound in short order. It could be off of a u-recovery which will take a little longer to start, but we will see a stock that rallies into year-end. There’s a fair chance that we will see Apple close the year out above $650 a share. There is a fair chance we see it hit $650 by mid-December. So that’s where I stand. I cannot entertain anything further than that. Now if you want to disagree and sell today or entertain further fears, go for it. Have fun. I cannot be in the position to continue to combat those fears. I can only post logic and reason in BC Live and it will be up to you to weigh the evidence. I know you have big decisions to make, but I’m not going to all of a sudden give you some further insights that are not already posted here at Bullish Cross.
You know, I have these friends with me that do this all the time. They say. “Andy, give me your take on things” What the fuck are you talking about? I just did. I just posted 4,000 words at BC Live. It’s not like I’m hiding a bunch of stuff that I’m not posting here. In fact, by writing things out, I’m being a lot more detail oriented. So you’re going to get a better picture here than with a conversation. In fact, in most cases the conversation just reiterates what I just wrote at Bullish Cross.
But anyways. Let’s talk about the markets now. First thing’s first. The SPY looks like it could be forming some sort of an inverted head & shoulders or triple bottom or something like that. Or it could be forming a bear flag and we’re all fucked. It’s either or. Alright. Take a look for yourself:
This feels a little more bullish to me than bearish. But who knows. I was thinking last night about going long the SPY with this set-up in mind. But if it loses the lows, we could see one last push to the downside. Because that is all I think the SPY has left in it. One more push down if that. So why not go long now? We probably will today.
The NASDAQ-100 looks like it’s forming something like a falling wedge or maybe a bear flag. Who knows. It’s definitely consolidation after a down move which tends to be bad. But again, you can only analyze that with the backdrop of what is going on with Apple and the set-up on the SPY. But here is the set-up on the QQQ. It looks a little messy:
To be perfectly honest with you though, the NASDAQ-100 is oversold. And the set-up on the SPY looks pretty decent. I think those two things together argue for at least a rebound if not a bottom. Take a look at the QQQ-day. You can see that it’s getting pretty darn oversold now:
What’s more, the NASDAQ-100 has taken a 10% correction. So there you have it. Even if we see lower lows, we’re not far from a bottom in the whole market. And if we’re not far from a bottom in the whole market, we’re not far from an explosive rally out of Apple. Because this part is absolutely clear. If the market bottoms and starts to rally, Apple is going to go ape-shit crazy on rally. You can tell that at this point the only thing that’s a drag on Apple is the broader market. You can sense it every session now.
Now the SPY is the thing that is the most concerning to me. The SPY hasn’t really hit any oversold territory. And that is a little annoying. Because if the SPY were oversold, then it would make it far more likely that the SPY was near a bottom all things considered. That being said, the $NYMO did fall to -55 yesterday. That is getting close to a bottom. -80 is a bottom. -100 is an extreme bottom. The $NYMO is the most reliable bottoming signal for the entire stock market.
Well I take back the SPY comment. The SPY is down to a 32 RSI. Notice that a 30 RSI on the market as a whole is pretty low. It’s not extreme. We’ve seen the SPY get down to a 19-22 RSI before in brutal corrections for those that remember. Like the May correction had the SPY down there. So did the last August correction. But in a lot of market corrections, a 30 RSI tends to do it. But it’s mostly the $NYMO that bottoms things out. See below:
Finally, Apple’s triangle continues. It’s looking more like a bear flag by the minute though. Yet, given that Apple is still so oversold it’s hard to believe that it breaks to the downside, but it certainly could.
Yet, I will say this. That while on the minute chart it does look like Apple is forming a bear-flag, the chart is far more encouraging on a 60M basis. This looks like a consolidation or triple bottom to me. We saw this after the July correction where Apple tested the $570 level three times before taking off. So this feels a little like that and it even looks a little like that on the 60M chart:
Finally, notice that the SPY is getting close to oversold on the 60M chart which means that we could be nearing at least a near-term bottom ahead of one of those very nice little short-lived rebounds. Also notice this triple bottom set-up or inverted head & shoulders or whatever looks pretty prominent on the 60M chart of the SPY:
Alright people. We’ve been doing this same thing every day for a year and a half now. If you want to start getting your grips on the things, you always have to be watching the SPY, the QQQ and AAPL. That’s at a minimum. If you want to go further you can. Like you can watch financials, materials, industrials etc. But I don’t think that’s particularly necessary as that information is already contained and reflected in the SPY and QQQ.
The reason you always want to be watching all three is because the SPY and QQQ impact what happens with Apple. For example, Apple’s pattern right now is ambiguous at best. At worst, it’s a bear flag ready to send Apple spiraling down in a fiery crash. But suppose the SPY suggests that the market is ready to pop or the QQQ suggests that we’re ready to see a very sharp rebound. That could shed more light on Apple’s formation. You see, that’s why it’s so important to watch everything.
Don’t think that every little move up or down that Apple makes is Apple’s. It’s not. 90% of the time it’s market related. When you see Apple tick-up during the day, in most cases it’s because the whole market has just ticked up. If you see Apple fall from $548 down to $543, in most cases it’s because we just saw a very sharp reversal in the broader market. If today, you all of a sudden see Apple rebound up to $550 a share, it’s probably because the entire market has reversed course and is now green. So watch the market. Apple is market dependent right now.
If the market direction turns for the positive soon, Apple will thrive in that environment. That’s when our recovery will begin. Right now, it looks like Apple has chosen the path of consolidation which is fine for now. The only negative right now is that Apple is no oversold by any stretch on the near-term indicators. The 60M RSI and Chaikin Oscillator are far off oversold. But the daily is still deeply oversold.
Let me give you a little secret about the RSI and Chaikin Oscillator. Not just with Apple. With EVERYTHING. Including the stock market as a whole. Anytime you get this oversold on the RSI, the next move tends to push the RSI way into overbought territory. So right now, you are quite literally experiencing the low-end of the range for everything. For the SPY, the QQQ and for Apple. Apple is at a 27.81 RSI right now. That’s why I have doubts of this formation breaking to the downside. But it might. But then what? Then we are back to where we were last Thursday an Apple is no lower than it’s lowest point. Why? Because it would hit extremes again. And so there you have it. Apple is at the bottom end of its range. It’s not going to have much or any downside at all from here and for Apple to push a lot lower, it needs to see a HUGEEEEEE rebound first. And when I mean huge, I mean like $100+.
10:50 AM — by the way, here are all of the charts together. Notice everything is now oversold together. Which means we’re getting close to an everything all-out market rally. This is the key to Apple rebounding:
As you can see above, Apple, the SPY, the QQQ, the NASDAQ and the Down Jones are all oversold. Now when it comes to the broader market, in MOST cases hitting a 30 RSI or just under is enough. You can see that even in big corrections hitting just a 30 RSI has been enough. But there have been times where the corrections have been larger. Where the SPY/Dow/QQQ/NASDAQ have gone deeply oversold. It happens but not often.
Can this be one of those times? Sure. It can. But it can also just be a normal correction. I mean, just look at the past three years of the NASDAQ. In that 2010 flash-crash induced euro-crisis correction, the NASDAQ never dropped below 30. Neither did anything else. In the Feb-March correction of 2011, a 30 RSI sort of stopped the bleeding then. And then we have the last two corrections which were really f’d up. The debt ceiling fail lead to the deeply oversold sell-off in that crash. It was a crash. Everything went straight down. Then we had last May which was also a little more bloody than usual. And now we have this correction. We’re right under a 30 RSI on most of the indices. Could there be more downside. Sure. But I don’t think we’re far from a bottom on the entire market to be perfectly honest. As I said earlier, I’ll probably take a SPY position today.
11:00 AM — Apple at the lower trend-line of the bear-flag. Let’s just call it that for now. We’re at the bottom of the trend-line. We lasted visited the top of the trend-line yesterday near $550 a share. So down here if Apple loses $538 I think it is, then it could lead to a full all-out breakdown with Apple at a 27 RSI right now. I just find that very difficult to believe:
Position taken: Long 10,000 Shares in the SPY Model Portfolio @ $137.00
11:01 AM — The SPY has had enough of a beating I think. This could be a premature long position. But I’m happy with the entry. I’m probably going to be holding this position for a while. I could ride it down a few points and then back up and will sell hopefully near $150.
12:40 PM — The market is down 90 right now and Apple is still hanging onto positive territory. What does that tell you? Since last Thursday introduced the best set-up Apple has seen, we have seen a complete and total halt of the selling pressure. Just hang in there. We have so much time between now and expiration. Just be a little more patient. When the market turns, so will Apple. And we’re not far from that.
2:25 PM – Some really good news. It looks like the $NYMO is currently estimated at -79. Remember -80 is what we want to see. Personally, I hope the Dow goes down 220 today at the close while Apple closes just slightly in the red. Say -$0.10. That would be extraordinary. That could push the $NYMO down to -85 to -90. That would really bottom us out. The $NYMO is the biggest indicator for a market bottom than any other indicator. It’s even highly correlated to Apple bottoms. Take a look below. This is where we will close if the $NYMO closes down near -80:
3:00 PM — Alright as we head into the last hour of trading, the $NYMO is now right under 80 and Apple is still holding its lower trend-line. Remember, even if Apple were to breakdown below its lower trend-line, where is it going to go exactly? It’s still extremely oversold:
The SPY, QQQ and Dow are all very oversold now. And with the $NYMO touching down to -80, we’re really starting to get close to the end of this correction for the market. And once the market improves, Apple improves.
3:16 PM — Apple is re-testing it’s lows here. I’m telling you, this is a fair trade-off. You want the markets to bottom. And the market’s best shot at bottoming is to have the $NYMO fall as far as it can go. -100 would be great. But anything below -80 is fine. And as long as Apple holds its lows, we’re fine. Take a look below:
3:20 PM — Apple just needs to hold this area right here and we’re fine. Hold this low $530′s for a third time with a -85 or -90 $NYMO close and we will be in business. You need to hold on just a little longer. Almost there. Almost there.
We could be right at the edge here of the end of this.
3:45 PM — this is not bad. Trust me. This action is good. The market is down 177, the $NYMO is almost at -90 and Apple is holding its ground. They are buying the shit out of Apple at $537.00. It’s support is being held under heavy hell fire. This is impressive. Look at $537. The market is rolling over and Apple’s $137 isn’t budging. I think this could be the bottom for the whole market. We will get the conclusion soon. But this is it. This is the best buying opportunity you’re going to get in the market and a once in a lifetime opportunity in Apple for the lucky asshole who can buy any spread of any kind down here at $537.00. I think this level is being held like a camp right now.
Position Taken: 4,250 Shares in SPY @ $135.90 in BC Long-Term Portfolio (40% position)
3:50 PM — Alright. We’re deploying the rest of our cash position in the BC Long-Term Portfolio in the SPY. We just bought a 4,250 share position in the SPY for the BC Long-Term Portfolio. This is different than the SPY Model. See here:
This constitutes roughly a 40% position of the portfolio. We’re indexing right here for timing purposes because I don’t time to sit there and spread the risk. So we will just take the full S&P 500. 40% position. We may reduce that exposure and go overweight in some financials soon. But I think this sell-off here today may constitute the lows for the market. If not the lows, then pretty damn close to it.
3:55 PM – Apple is still holding its lows. The market has made substantially new lows, but Apple has still held its lows set last Thursday. A full week without a new low for Apple. Until Apple loses its $533 lows, it’s still in ok shape and still consolidating. Meanwhile, the market has lost quite a bit over the past week, got really oversold, and now the $NYMO is in the tanker. Things are starting to look like a full bottom across the board now. The $NYMO is currently at -87. We won’t know the final number until about an hour after the market closes. But the estimate is close enough. Don’t forget, Apple is at a 26 RSI right now on the daily. That’s keep a steady floor under the stock. We are really not far from a big rebound. You just need to be patient at this point:
4:01 PM — The $NYMO has closed near 87. That could suggest that the SPY, QQQ and Dow may be right at a bottom. We’re also oversold across the board on all indices and on Apple. The next broad move is up. We don’t know precisely when it will begin, but the next broad move will be deep green. That’s all I can really tell you. The space between today and January will be huge up. Does it start tomorrow or Friday or Monday? Who knows. I just know the big broad next move is up. This is what the $NYMO will show once it records over the next hour:
As you know, everything is extremely oversold. Here they are. This is how things have ended:
5:30 PM – So I noticed there are a lot of you that think that the technicals are nonsense. Well if that’s what you think, then you should consider why you are in Apple right now at all. Reflect on the reasons for holding your spreads. Right now, the $655 -$705 is fetching $1.00. That’s $1.00 more than $0.00. The 2014 $900 – $1000 spread is a 50-bagger right? Well if you buy the 2014 $900 – $1000 spread and Apple makes it up to $1000 a share by next January, your spread will be worth $50.00. It will be the same result of Apple hitting $705 a share this January.
So you have an out right here and right now. You can sell your $655 – $705 spread and buy the $900 – $1000 January 2014. You would just need to wait until 2014 to collect. That’s basically your options right now. So if like A.S. you believe technicals are the equivalent of this chart below, then consider that possibility of transitioning:
5:37 PM — by the way, for those who don’t think it’s all mumbo jumbo, mumbo jumbo, mumbo jumbo, here is the final print of the NYSE McClellan Oscillator ($NYMO). The S&P 500 is almost at a bottom: