Just to remind everyone, after all of this consolidation and pulling back we've seen over the past three weeks, at this point Apple is only a mere $1.70 below its highs. So you can see that regardless of all of the back and forth in this consolidation period, it's overall very bullish. Remember, Apple rallied from $102 up to $116 in just 4-sessions. Since then it has ping-ponged back and forth between $116 and $111.50. For the past week or so Apple has been contained within a range of $111.50 and $114.50. That range has gotten a little tight as it should in a bullish pennant. And the action we've seen the past two weeks looks every much like a pennant now. It's not longer a bull flag. A bull flag is a continues decline at a shallow angle that eventually resulted in a clear-cut breakout to new highs. This isn't that anymore. Instead, we have something more like a symmetrical triangle or bullish pennant forming. Here's what a pennant would like with today's action:
The daily does still look like we could have a bull flag breakout if Apple just rallies from here on out and what we see today constitutes the beginning of that breakout. But the hourly definitely looks more like a pennant because the trading action of the past week essentially invalidated the bull flag thesis from an hourly perspective. The daily is still open to that possibility. Remember, each time scale could have entirely separate patterns develop. You can have an ultra bullish 1-minute chart, a super bearish hourly and a very bullish daily. You can imagine a one more chart where Apple develops a picture perfect inverted head & shoulders. The hourly could have a bear flag forming (very bearish). And yet, the daily chart could have some sort of major double-bottom or bull flag in the works. So you can see different types of patterns develop on different time-scales. Here, there is a potential bull flag breakout no the daily chart, but that is no longer the case on the hourly. Here's how this could still be a bull flag:
Suppose Apple were to run straight through the highs over the next few days from here and then top out around $122 or something like that. If that happened, the chart would clearly look like a bull flag breakout. When observing the total move, it will look like Apple rallied to $116, flag down to $111.50 and then broke out of that flag to run to $122. Now let's compare to the hourly. The hourly chart no longer really reflects this outlook. What we needed to see was for Apple to fall to the lower trend-line a few days ago, push back up to the upper trend-line, stall out and then continue until we had a solid clear-cut breakout. See below:
Instead, this is what we have brewing. This is actually very bullish. Especially if the trading range tightens. Notice how Apple didn't fall under $112 this week. It fell to a low of like $112.50. In fact, since hitting $111.50 around the 26th and again just after the $26th, Apple hasn't fallen under $111 since then. It has trading in a tighter but upward tilting range i.e. a bullish pennant or symmetrical triangle. ITs' still bullish either way. So the daily looks bullish and the hourly looks bullish. Don't mistaken this trading action. Now as is typically the case, sometimes this bullish formations can break to the downside. It does happen, it does happen frequently, but an upside breakout in this scenario is still far more likely = about +60-70% when backtested. What's more, the catalysts are clear in Apple's favor. It's obvious Apple is going to deliver strong results. Look if there was any doubt in Apple's mind whatsoever, it would not have reiterated guidance. Think about it. If Apple were doubting the quarter, they would do what they have always done and that is to NOT say anything about guidance or the quarter after delivering its results. It delivered its results back in July and reiterated guidance for the quarter during the last couple weeks of the quarter. Think about that for a minute. When Apple reiterated guidance, the quarter was nearly over. So I don't understand how the hell ANYONE could sit there and try to interpret the change in earnings schedule as somehow suggesting Apple is going to report bad earnings. That's really stupid sorry. It just is. Like no company is going to reiterate guidance a couple weeks before the quarter ends and then deliver bad results. Especially a company like Apple who has NEVER done so. We've been following Apple closely since 2005 and it has never once ever increased, decreased or reiterated its guidance. So to do so here is a clear indication that earnings are fine. The point is that the catalyst are in Apple's favor. The earnings report is likely to be strong. This is likely going to be known by the most powerful on Wall Street and the stock is going to likely react positively ahead of earning as the cheaters get in ahead of it. Just like when we saw the stock tank for 8-days ahead of its fiscal Q2 earnings report and lo and behold Apple delivered really bad results? Remember that. So I think it's obvious that some people just know the nature of the report ahead of time. And we have the same advantage because we're using our intellect to arrive at that conclusion on our own.
On top of all this, BotTrigger has every imaginable bullish indicator that is strongly in support of a much higher AAPL going in the year. The point is to be grounded in our analysis but also be ready for the usual shenanigans we are aware this Market can pull. So we are involved on the long side but ready to take advantage of market mistakes like what we saw back on September 9th when AAPL tanked all the way to the $102 area. We were ready to pounce and we will do the same thing when that pull back comes once more.
