My posts might be on the light side today as I’ll be whittling away at my Honey-Do list in preparation for a Holiday party that we are hosting tomorrow. However, I did want to point out the significance of this very large, very pronounced thin zone on AAPL (as evidenced by the volume at price histogram).
Basically a thin zone is an area, such as a gap or in the case of AAPL, where relatively very few trades took place. Thin zones, just like gaps, often tend to be back-filled rather quickly once entered as there is very little (if any) price support. I took this screenshot just before the market opened and as I type, AAPL is trading at 510, just inside the top of the thin zone and now below both the key horizontal support as well as the daily uptrend line (my former first downside target which was hit when AAPL bottomed on Nov. 16th). AAPL may just want to re-test those recent lows but any solid move or close below would be a very bearish technical event and could spark the next big wave of selling in AAPL, which of course, would most likely drag the broad market down with it.