While We’re Waiting…

December 12, 2012 (9:30 am)

We’re simply waiting now to see how this potential double bottom reversal gets resolved. There’s really nothing you can do but position for the eventual outcome and wait.

Trading Psychology and Resistance Levels

The $555 level is a really important line of resistance for Apple. Breaking that resistance level could drive a series of events that allows us to float back up towards the previous highs. A majority of traders, fund managers, market makers, etc. have a basic understanding of technical analysis. If they see the shares break above that $555 resistance level, we could see an immediate shift in trend, because most will agree that there is a clear-cut double bottom. You’ll see the sentiment change extremely quickly. Then, if we are able to take out $594 (the next significant level of heavy resistance), you could see buyers come in from every angle.

SPY Update

A couple of weeks ago, we discussed the strong potential for an inverted head and shoulders pattern to be forming on the SPY. We bought 7,000 shares at $139 to take advantage of this setup as well as very low reading on the NYMO. This morning, the SPY hit our target price of $144.

And here’s the NYMO. The blue line on the right shows where we indicated a strong buy opportunity.

Today, we’ll be selling our SPY position at $144. It’s now oversold on the 60 minute chart and we should see a roughly 2% pullback in shares. We’ll look to re-enter when it pulls back, but we do expect a continuation of the rally into the new year.

Position Sold

  • 7,000 shares of SPY at $144.00