Apr 202015
 

At a weighting of nearly 15%, more than double the second largest component (MSFT) and 4x that of the third largest component (GOOG), AAPL's strong rally today is largely driving the advance of the $NDX. Even if we don't back out AAPL's 2.5% gain but simply give it an equal weighting against the other stocks in the $NDX, we can see that today's gain in the equal-weighted NDX ($NDX-E) is over 28% lower than that of the AAPL top-heavy $NDX. While the 1% gain in the $NDX-E is still respectable, today's rally in the $NDX-E, as well as the other major US stock indices, so far appears to be nothing more than a continuation of the short-term oversold bounce off the support level that was highlight on Friday afternoon.

Of course, this over-weighting thing cuts both ways. AAPL is scheduled to report earnings next Monday, April 27th, after the market close. We also have a slew of tech giants reporting this week, including IBM, FB, YHOO, MSFT, GOOG, and AMZN. Bottom line: Either strap in & hold on or considering reducing market exposure if you aren't a big fan of volatility and large opening gaps as the choppy price action that we've seen recently isn't likely to abate anytime soon. High volatility can be very frustrating for swing traders as it tends to provide numerous whipsaw buy & sell signals in addition to running the stops of both longs & shorts alike.

AAPL, $NDX & $NDX-E April 20th

AAPL, $NDX & $NDX-E April 20th

 

Although I've been providing a lot of short-term market analysis recently via intraday charts such as the 15-minute time frame, the swing-short position on the QQQ is driven largely off of the daily & even weekly time frame. If & when my intermediate outlook for the markets changes, I will do my best to communicate my thoughts asap. As of now, I continue to expect a resumption of the downtrend that began when the Q's topped on March 2nd. Since then, the QQQ has been making a well-defined series of lower highs & lower lows, i.e.- a downtrend. Only a move above the previous reaction high of 108.38 from April 13th would call this current short-term downtrend into question.

QQQ downtrend April 20th

QQQ downtrend April 20th

 

 April 20, 2015 1:38 pm  Equity Market Analysis Tagged with: , ,
Mar 242015
 

*+-This is the same daily chart of AAPL available through the Live Charts page. About a month ago, I had updated this chart to highlight the most recent overbought cluster & negative divergence on the RSI. The history of previous corrections in AAPL has been [continue reading…]

 March 24, 2015 2:44 pm  Equity Market Analysis Tagged with: ,
Sep 032014
 

*+-As a follow-up to last week’s AAPL Looking Toppy post, after today’s high volume sell-off that took AAPL down well over 4% earlier today, I’m seeing a few technical developments that have further strengthened the bearish technical outlook that was previously outlined for AAPL (Apple [continue reading…]

 September 3, 2014 1:53 pm  Equity Market Analysis Tagged with:
Aug 272014
 

*+-It will be interesting to see if AAPL (Apple Inc) wows the public next month with the widely expected larger iPhones, this oversized iPad or any other tricks it may have up its sleeve because the chart on AAPL is starting to look ripe for [continue reading…]

 August 27, 2014 10:23 am  Equity Market Analysis Tagged with:
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