Apple and the Dow Threaten Major Cyclical Tops

By: Joseph Russo | Fri, Oct 26, 2012
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Apple and the Dow Threaten Major Cyclical Tops

At the five-year anniversary (a Fibonacci turn-year) from its historic print high in October of 2007, the Dow is threatening to mark another October cyclical peak.

From a fresh historic high in late September, the Apple bellwether is also threatening to mark a lasting high of substantial import.

As we continue to have great success in charting both of these markets, we have decided to share with readers grounds for considering plausible tops of significance in both.


The Dow

In short, the case for a plausible cyclical top in the Dow rests upon the downward impulsive footprints left in the wake of recent declines. From the October 5 high at 13661.87, the Dow fell impulsively to the first pivot low noted at 13296.51 on the chart below.

A 78.6% retracement rally to the 13588.65 pivot high occurred swiftly thereafter, but quickly gave way to another five-wave impulsive decline to a fresh new low on Friday October 26, which also happens to be a suspected turn-date. We warn that this may be setting up a bearish nested series of 1st and 2nd waves.

DOW 30-Minute Bars

As the Dow moved down toward its first pivot low at 13296.51, we drew a line in the sand for chart service subscribers, which called for a 375-pt decline toward the 13062 target. Amid the lows on Friday October 26, we captured this target.


What would turn the Dow bullish?

Though still struggling to find a short-term bottom, we would not be surprised to see a retracement rally ensue following Friday's projected turn-date low. What would really turn the Dow back into the bullish camp is if it were to achieve sustained trade and closes above 13475.


Apple

In short, the case for a plausible cyclical top Apple is the same as the Dow, and rests upon the downward impulsive footprints left in the wake of recent declines. From the September 21 high at 705.07, Apple has fallen impulsively to the pivot low noted at 691 on the chart below.

With a forthcoming prospective turn-date slated for November 1, we may see lower lows into this period or an attempted rally back and subsequent failure. Of added note is the $581.50 level which if breached, shall negate bullish prospects for the 4-wave down in question.

Apple Top

As Apple moved down beneath 644 support (now resistance), we kept Chart-Cast members long from a price of 399.90, positions which we established back in December of 2011. Yesterday however, we got an email alert confirmation to take in excess of 50% in profits and reverse short, which we did at today's open of 609.43. If you are wondering about the negative month-to-date equity displayed in the lower chart panel, it is simply the mark-to-market amount of open profits drawn down from the start of the month.


What would turn Apple bullish?

Though still struggling to find a short-term bottom, we would not be surprised to see a retracement rally ensue following Friday's low. What would really turn Apple back into the bullish camp is if it were to achieve sustained trade and closes above 662.

Consider yourselves warned with a proviso for the bullish contingencies so noted.

 


Technical Analysis ON-DEMAND:

For those who may not be aware, Elliott Wave Technology provides custom on-demand technical analysis for Stocks, ETF's, Futures, and Mutual Funds. If you are interested in obtaining analysis for any of your portfolio holdings, you may obtain a sample and learn more about this service by clicking here.

 


 

Joseph Russo

Author: Joseph Russo

Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology

Joseph Russo

Since the dot.com bubble, 911, and the 2002 market crash, Elliott Wave Technology's mission remains the delivery of valuable solutions-based services that empower clients to execute successful trading and investment decisions in all market environments.

Joe Russo is an entrepreneurial publisher and market analyst providing digital online media solutions designed to assist traders and investors in prudently and profitably navigating their exposure to the financial markets.

Since the official launch of his Elliott Wave Technology website in 2005, he has established an outstanding record of accomplishment, including but not limited to, ...

  • In 2005, he elicited a major long-term wealth producing nugget of guidance in suggesting strongly that members give serious consideration to apportioning 10%-20% of their net worth toward the physical acquisition of Gold (@ $400.) and Silver (@ $6.00).

  • In 2006, the (MTA) Market Technicians Association featured his article "Scaling Perceptions amid the Global Equity Boom" in their industry newsletter, "Technically Speaking."

  • On May 6 of 2007, five months prior to the market top in 2007, though still bullish at that time, he publicly warned long-term investors not to be fooled again, in "Bullish Like There's No Tomorrow."

  • On March 10 of 2008, with another 48% of downside remaining to the bottom of the great bear market of 2008-2009, in "V-for Vendetta," using the Wilshire 5000 as proxy, he publicly laid out the case for the depth and amplitude of the unfolding bear market, which marked terminal to a rather nice long-run in equity values.

  • Working extensively with EasyLanguage® programmer George Pruitt in 2010 and 2011, the author of "Building Winning Trading Systems with TradeStation," he assisted in the development of several proprietary trading systems.

  • On February 11, 2011, he publicly made available his call for a key bottom in the long bond at 117 '3/32. Within a year and half from his call, the long bond rallied in excess of 30% to new all time highs in July of 2012.

  • For the benefit of members and his general readership, he responded to widespread levels of economic and financial uncertainty in the development of Prudent Measures in 2012.

  • He publicly warned of a major top in Apple on October 26, 2012 in the very early stages of a 40% decline from its all time high.

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