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Stockhaven’s Market Take 1/14/13

Let me start off by saying how impressed I am with this market. AAPL traded around $500 pretty much all day (as I predicted it would last week, more on this in a moment), yet the NASDAQ hardly sold off at all. In addition, the Dow finished green and the S&P500 was pretty much flat. Nor could the VIX get off the mat today. This brings me back to a question I posed just over a week ago

“How high can the market go without AAPL coming along for the ride?”
-Stockhaven’s Market Take 1/6/13

 Stockhavens Market Take 1/14/13

At the time of that writing, SPX was at 1,466 and AAPL was at $527. Since then, AAPL has fallen nearly 5% while SPX has managed to edge ever so slightly higher. So the current answer to this question is not much higher. However, the mere fact that SPX hasn’t pulled back at least somewhat with AAPL is a good sign for the bulls. I’m still leery of this market though at its current levels given the way AAPL is trading.

I have said before and still say that SPX cannot and will not make a serious run beyond 1,475 without AAPL at least showing signs of stability. Either my thinking is too narrow minded in putting too much emphasis on AAPL, or the market’s thinking is too open minded in ignoring the most recent price action. Today’s low holding (1,465) would be a good tell of sorts as far as what exactly the market is thinking.

In regards to AAPL, none of my readers should be surprised by today’s move down to $500. I have stated on numerous occasions in this space that I felt $500 would get tested ahead of the 1/23 earnings release.

“Well after closing Friday at $527 I am officially declaring $500 back in play for AAPL. To me, the bears seem to have a real chance to test and break $500 before earnings on 1/23 and I suspect they take advantage of that chance.”
-Stockhaven’s Market Take 1/6/13 

“In what is becoming a common theme, AAPL just can’t get off the mat at all. The stock traded lower again and is now down 2.8% for the year. I reiterate my view that $500 is definitely in play ahead of earnings (1/23 is earnings date) and at this point it is starting to look like a magnet.”
-Stockhaven’s Market Take 1/9/13 

So now that we’re at $500 in AAPL, what should you expect now? After the initial gap down on Monday, there was a big volume drop off post 10:00 am on AAPL which resulted in a lot of sideways action, with some bullish spikes as the day wore on. So the main thing I am looking for is high volume on a 3 minute basis (consistent 3 minute candles with more 200-250k in volume) after 10:00 to signal a deeper move lower into the low $490′s and possibly $480′s. As for upside, well AAPL has a ton of work to do but some people are likely going long vs $500 while targeting a bounce back into the $510-$520 range.

The bright spot today came courtesy of the Dow Jones Transportation Index, which was able to break above Friday’s high and enjoyed a close near its highs for the day. DJT is now less than 0.5% away from its all time high put in in 2011 at 5,627. In addition, DIA is very close to breaking a triple top pattern at $135 which should have bullish implications if accomplished as well. These two indexes are helping keep things afloat near multi year highs for the S&P500 while the NASDAQ continues to be a laggard due to the action in AAPL.

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