Tuesday, October 23, 2012

using AAPL technicals to locate the next floor in the SPX

Looking at the weekly chart of AAPL I notice it's RSI reached an astounding 98.90 right at the stocks long term blow off top (I view the second higher high in the stock as stop running those who shorted *the top* which ramped as high as 705ish. Notice the higher high was not confirmed by RSI and in fact now that price is snapping back the other way, it's first resistance to the collapse doesn't come in until 500ish which would satisfy the RSI sell signal while also coming in right at the longer term rising trend line.  I'll be using AAPL's price action to help me hold fast to my initial target of 1325ish on the SPX. I'd expect large nasty swings in SPX (SPY) during the fight to hold 500 in AAPL.

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