20DMF and AAPL

[Pascal]

Interesting action: money moving out of the markets, but barely out of AAPL.

Note that if the MF closes below the red dotted line, it will turn short.
Be aware that the market is now used to discount pull-backs in expectation of fresh liquidity.
It is not wise to trade as if you knew what the next move will be. If you "know it", then everybody else knows it and this knowledge is probably priced in. It is always wiser not to "know," because you will be betting your knowledge against thousands (millions?) of other people's knowledge - opinion.

For example: I am pretty sure that you know that China is going to have a hard landing and that commodities will be hit hard. You also know that with major elections in Europe over the week-end, political instability will be the main focus next week. Finally, everybody knows that even if there is officially no QE, the FED needs to create liquidity to force rates down by buying treasuries.

If you know this then it is already in the market price. This market is very hard because everybody is more clever than everybody else and at the end, sheer brutal force of liquidity - or the lack of it - is what moves the price.

So, stay focused on what you do not know and doubt what you know!



Pascal

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[senco]

....

Note that if the MF closes below the red dotted line, it will turn short.

As of yesterday's close 7 of the 9 XLX ETFs are long. Should be expect at today's close most of the XLX ETFs to go cash or short?

[Pascal]

As of yesterday's close 7 of the 9 XLX ETFs are long. Should be expect at today's close most of the XLX ETFs to go cash or short?

Most are close to the 0 level-porosity.
This means that they will turn short by the close.


Pascal

[brrim]

Pascal; What may be equally as important with regard to AAPL is that money isn't moving in when AAPL is trading near its 50 dma.
Best regards,
Robert

[Pascal]

Pascal; What may be equally as important with regard to AAPL is that money isn't moving in when AAPL is trading near its 50 dma.
Best regards,
Robert

Yes, the fact that we are just below the Lower Boundary with no money moving in is worrisome.
The situation of the current holders has also changed. I show below two Volume Histogram for the total float of AAPL shares. We can see that mid-April, there was a good equilibrium, with half of the shareholders losing money and half still in positive.

This however has now changed and it is how a negative selling back-loop starts forming, with lower prices attracting lower prices. By experience, I have indeed noticed that a loss of -10% is acceptable, but once it gets higher, shareholders start cutting their losses. There is a group of shareholders that stands at the -10% level. This is the group that will sell first, as soon as the price breaches the previous low of 560. This level must hold or else, the selling will snow-ball on other techs and then on the whole market.

In the meantime, this is in fact the place to buy AAPL, at least if the market was starting to bounce from here and if we could witness large players being again attracted by AAPL. Let's see what Monday will give us. The market will by then have had all the time to digest the fact that Germany is potentially standing against all other European politicians who want to debase the Euro to "grow" their exports.


Pascal

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