Monday 17 December 2012

What Is AAPL Telling Us About Money Flow?

The day chart below of AAPL shows the precarious state of the broad stock market - hanging on a precipice today - as AAPL comes into the 500 level. This speaks moreso to the 'internal/domestic' perceptions on the health of the US economy into 2013, and money flows (or out-flows in this case) as the Nasdaq Composite/100 Index (and technology at large) are the domestic, risk-appetite barometers -- AAPL is its proxy.




Above, I've highlighted the Bear/Bull zones to reflect the overall structural trade-set up and expectations if price is to find acceptance in these spatial areas. I referenced the AAPL rejection from Quarterly Lows (570) coming into December, which turned the 'Major Trend' Bearish on a monthly basis and spelled caution to long investors coming into December. We need to watch a few things with AAPL:
1.Year End Close >/< 505 (Monthly Low Support Reference)
2.Year End Close >/< 481 ('Strong Support Trendline')
3.Year End Close inside 'Normal Velocity Regression Channel 2010-2011' or outside and above this phase shift.

I am expecting a choppy finish to the year-end trade. As opposed to a persistent trending market. Despite the AAPL move lower, the NQ has yet to turn down on the weekly timeframe. The NQ is bracketing at 2689-2611 range with 2600 as strong support. Anything outside of this range would signal change.




Above we can observe the disconnect in Money Flow into Dow 30 and S&P 500 and out of Nasdaq 100/AAPL as the former reflect international perception, money flow and 'safety', whereas the latter, as mentioned more speculative, domestic behaviors.