Bats and Crabapples — September 19, 2011

UPDATE:  3:50 PM

SPX bouncing on the non-news of Greece, etc.  Should be limited to the .786 of Friday’s Bat pattern at around 1210.50.


Friday’s Bat patterns are playing out nicely, with SPX down to within .45 of its .618 Fib level before getting a good bounce at the 10-day moving average.

A Bat pattern target is normally .618 of the DA retrace, meaning just below 1170.  The pattern .382 level at 1168.14 correlates nicely with the larger (since May 2 high) .236 Fib retrace at 1166.  I’m thinking it’s a reasonable level at which to rebound to the channel line one last time a la July 21.

Don’t expect a straight line, though, as Fed mania and stick save Euro zone conference calls will provide plenty of upside impetus.  A good target for today’s rebound:  the .382 Fib level (from the May 2 high) at 1205.1.

BTW, I normally don’t pay much attention to individual stocks, but a bellwether like AAPL is hard to ignore.  Recall it recently completed a Gartley pattern at 392.08.  Here’s the chart I posted on Aug 31.

Along with the Gartley on SPX, a neckline backtest on COMP and SMA 200 on NDX, it helped convince me to call 1230 the interim high.

We got a nice reversal almost immediately, retracing 26 points (.618) in the following three days.  Now, it’s back with a vengeance, hitting an all-time high of 411.82 just minutes ago.

Of course, in the process, it completed another bearish Crab pattern.  Crabapples, if you will.

It’s actually overshot the 1.618 ideal D point of 407.90.   So, the pattern could be busted.  Or, it could be it just got a little ahead of itself.

But, looking at the long term picture, there’s a rising wedge that’s clearly coming to a head.  If so, AAPL could end up spoiling the whole barrel.

More after the close.


Take a peek at the divergence on AAPL’s weekly chart.  Does the RSI have the juice to break through the TL?


Bats and Crabapples — September 19, 2011 — 3 Comments

  1. George H

    I will respectfully disagree. A market as concentrated as this one is in a single stock is not healthy…smells too much like Radio in the late twenties.