Contrarian Apple

I know that even thinking about shorts in a monster rally is dangerous. With the Fed throwing billions in stimulus at the economy every week, who knows how long the bull can continue.
But looking at some charts this morning, something just seemed wrong about AAPL.

All the volume on the big gap up is a positive for the bullish thesis. But the follow through has been week. Technically it closed the gap, back to a solid support around 185-190. Then is has moved back to the previous highs. Opened this morning around 205. That rally back has been on declining volume. Now volume is at the lower end of the normal range. Just thinking that some more fuel is going to have to be added to keep the fire going.
Not shown on this chart, but there is considerable RSI divergence as well.

When I checked the weekly, AAPL is back to the late 2007 levels. When the world was priced to perfection and it was universally believed the market could keep on going higher forever.
Now we've had the worst recession/depression since the 1930s, credit has evaporated, housing has crashed and 10 million people have lost their jobs. Yet here is Apple, right back to where it was. Just seems like something is wrong with this picture.

Think I'll have a look at some put options today.
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TBT looking good

TBT looks like it is setting up for a nice move higher. This snapshot taken just after the open this morning.

The resistance at 48 is well defined with multiple touches. There is also a good case to be made for an inverse Head and Shoulders. $6 from the neck to the low, so the upside target would be 54. That works out nicely wth upside resistance from previous highs. Also, a 161.8% move of the trading range gives a target of 51.7. Volume was good yesterday, so a close above 48 would be the buy signal.

No position yet.
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Setup in Preferred Financials

PGF is the ETF for Preferred Financials stocks. Interesting because the weekly chart seems to be hitting close to Fibonacci levels.

Interesting that is closed yesterday right on the weekly 50% line at 14.7. The whole setup is looking a little bearish to me. But if can hold above that support, a run back to 16.0-16.2 would not be out of the question.

But if it can't hold, then 14.20 would be a first target. With the weekly 38.2% level at 12.49, and chart support just below that around 12.2. So risk / reward to favor the short side.

No position in this stock.
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Interesting setup on VNO

VNO is an office property REIT. Yields 2.5% and P/E of Zero.
The chart is an interesting setup, worth going on the watch list.



Just drifting in a possible pennant. Looks like a short on a close below 60, with a possible target between 54 and 50.

No position in this stock.

Chart of the Week

Got this chart from Zero Hedge today. If a picture is usually worth a thousand words, this one is worth a book. Think about it. Since 1971 you had to make 4.43% every year just to break even on purchasing power. Transaction costs and other fees on top of that.



Have a good weekend.
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Retail Reversal

Nice reversal today in Nordstrom (JWN).

This is the action at about 10:45. No support taken out yet. Target (TGT) has a lot of positive things to say this morning, which should be positive given the love-fest bull market run we're seeing. TGT gapped higher and is selling off as I write this, about 11:00 now.

The weekly is just on giving a sell signal from overbought. That chart shows the drop off in volume as the market moved higher in the last 3 weeks.
Still early in the day, but if the afternoon bull squeeze doesn't work today, this could be a short. Plenty of potential.

Disclosure
- No position in JWN
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GS Weekly

I've never traded this stock, but the 4 year weekly is starting to look interesting.



The interpretation of the Head and Shoulders pattern is a little suspect, even so, it measures to within $10 or so of the recent bottom. Getting close to resistance at 140, and weekly volume dropping off dramatically. Even if GS is back in full bull mode, looks like a setup for a significant pullback.

Disclosure
- No position in GS
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100 to 1

After an absence to take care of some personal matters, I'm starting to post again. Hopefully maintaining some continuity for awhile.

This morning I saw this piece on ZeroHedge, GM Officially Wiping Out Common Shareholders.

Aside from the obvious fact that anyone who still owns GM stock is supposed to get wiped out, that's how Darwinism works, it occured to me that this could have a big effect on the Dow Industrials. The DJI is the only major stock index that is price weighted. So GM at $185 would take it from having almost no effect on the daily DJI moves, to having an outsized importance.

So would it make sense to short the Dow, against almost any other index?
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