September 9, 2014

Is That All Ya’ Got Apple?

applelogoAfter weeks of hype to pull everybody into the AAPL web the company finally pulls into the hall with Tim Cook taking the stage and starting the fireworks. Or I should say the anticipated fireworks. The only thing I can really say about the performance of the stock after all was said and done – it was akin to “a fart in church”. Please excuse my bluntness if it offends anybody – but think about it. The company didn’t say anything exciting about products aimed at anybody over the age of 15. Yes, the long wait for the Apple Watch is over with the company announcing its entry into the smart watch space. With a price tag starting at $349 it seemed to be aimed at the 1% crowd. The hype or should I say possibility of actually generating the $2.5 billion in revenue, which is pegged at about 5% of the entire watch industry just didn’t carry much weight when it came to what to do with all that long stock accumulated over the past few weeks.

There was a litany of pundits putting out statements; here are some that I found amusing:


  1. “Like it or not, it is pretty cool that the Apple Watch does get us one step closer to the Jetsons-esque future we’ve all dreamed of. – Ryan McCaffrey
  2. “My comment on Apple Watch: We don’t know what it cost, we don’t know what it does, but everyone needs one.” – Steve Liesman
  3. “If the Applewatch gets mass adoption, everybody will be walking down the streets looking a caricature of a very busy person.” – Justin Paterno
  4. “Disappointed that Apple watch won’t be available till after Christmas. That’s going to impact any Fall rally for AAPL.” – Dr. J.
  5. “It seems absolutely obvious to me that Apple’s watch is an absurd, near-useless device. Everyone will have three this time next year.” – Dan Gardner
  6. “Apple just killed the entire smart watch market until next year. Have fun, everyone else. That was COLD.” – Ben Juchera
  7. “I wish AAPL would put Apple Watch in a standalone company so I could short it.” Kid Dynamite
  8. “The Apple Watch is AAPL’s riskiest product launch since the Newton.” _ Jon Fortt

However, the market didn’t respond as lightly sending the stock into a $7 tailspin after pushing back to all time record highs. This in turn brought out a massive attack on the NQ and returned the balance of the broader indexes back into sliding lower.

volatilityThe NQ was a wonder to behold on Tuesday. The market basically opened weaker in line with the balance of the broader markets but found continued buying support each time the sellers moved in. After moving sideways and succumbing to an after lunch sell off the NQ stopped right at 4072 support (light intraday support) before getting pumped as AAPL began to rally significantly ahead of the grand announcement. This brought the market to session highs at 4110.75 and just below the 14 year high at 4113.75. Then it was if someone walked in and pulled the plug. The NQ began to sell off along with AAPL, pausing briefly at support around the 4078 area and again at the 4072 area before ultimately finding a bottom, (intraday) at the area of the previous low at 4052.

The pattern on the hourly chart is too inconclusive to determine the likely path the NQ will take. The technical indicators though quickly pushed into slight oversold readings into Tuesday’s close, which suggest an initial bounce on Wednesday is likely. The daily chart is also inconclusive as to the longer-term probability of a continued slide lower. With the technical indicators quickly dropping out of overbought and turning more neutral it raises the potential for the NQ having completed a smaller “flat” correction. Flat in that the decline and intervening rally were basically equal in length. If this were the case, the NQ would be set to resume the larger advance with new highs next up. I’ll be watching closely for additional signs of what’s next for the NQ.

Check out the enclosed chart for trades and discussion on Tuesday’s action in the $NQ_F

9-9-2014 2-07-16 PM_NQ_EAGLE


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