Apple Inc. (AAPL) H&S Top Pattern

AAPL is forming the right shoulder of a H&S top reversal pattern. We note high volume on the left shoulder which is typical of the pattern.  The strong uptrend begins to wane as the head forms on less volume and then, finally we confirm the pattern when we observe really weak volume on the right shoulder.  We had a volume spike when AAPL capitulated on Friday November 16th.  Since then AAPL has retraced on declining volume.

We expect the right shoulder to top out in the ambush zone or the blue line which lines up with left shoulder.  After we breach the neckline, we might get a dead cat bounce, followed by a measured move down.  The measured move should be the approx.length of the top to neckline, in this case $200 (705-505).

Apple Inc. (AAPL) Short-Term, Oversold Bounce

In my previous post, I outlined the Fibonacci support (ambush) zone for AAPL based on an extended move to date.  The area of major support is $567 to $535.  Yesterday's bounce at $623 was in the ambush zone from $567 to $705 highs.

The second chart shows the series of measured moves down.  If the series breaks, we can trade all the way half way back from highs to lows.

The target is still $567.00, but there will be relief rallies along the way.

Technical Picture - Consolidation - Markets Mixed

The markets consolidated ahead of tomorrow's jobs data and in the wake of the big move from the March lows. The DOW and S&P had minor losses whereas, the NASDAQ and Russell printed minor gains. As depicted on the chart above, we are testing the top of the congestion zone which formed prior to the correction. Normally, we would expect matching or similar congestion areas to form prior to breaking higher. If that's the case, we need to consolidate through price and not just time.

Normally, strong jobs data leads to higher interest rates and pressure on gold. The GDX chart below shows that we are on the cusp of breaking out of a symmetrical triangle. How does it work? Well, strong jobs data suggest the need for continued QE (quantitative easing) by the FED, may be coming to an end, sooner than later. Whisper numbers are always higher than consensus, so this is always tricky.

Day Trades

TSLA gapped up, and flagged into the rising 5 period EMA on the 15 min. timeframe. As we can see from the daily chart above, we had two targets, gap resistance and gap fill. I took a partial at resistance and was stopped out on balance. Eventually, formed a bearish base, which I shorted.


Early weakness in RIMM formed a bearish flag near daily support which I shorted hoping for a BO, but there was a huge buyer lurking around $56.85. The trade was aborted when price formed a base just under the flattening 5 period EMA. Just like the APOL trade from a few days back, the failure sets up a long entry. The next test of this level should break.

From the daily chart above, we see that a measured move of the bear flag pattern would bring prices down to $50.00, a solid support zone.

DECK - not a winning setup, but I was hoping that the bear flag would break and extend to the low end of the congestion zone.


VRUS was a momentum gap. Price rallied, retraced and consolidated, forming a base and setting up a low risk entry (NR7). VRUS is blue sky, but on a measured move basis, it should top out between 80 and 81, and consolidate.