AAPLTalk Late Night, 9/18/13 Market Close: ??? + QE3 = Two-Day Bounce

Gaps in logic, gaps in price – I just can’t figure out AAPL’s price action one bit lately.

Hopefully I can provide some mild entertainment to go with the usual charts.

Did those overall nice reviews of the iPhone Fall Collection (including iOS 7) cause the gap up this morning?  Er, maybe?  I suppose it was nice to see an apparent connection between the Fed’s delay of any tapering (for all practical purposes, at least through the next several months?); the market having a stimulus-fueled rally; and AAPL re-finding its footing as the 460 level beckoned.  I know, price action over all else, but things at least seem to make more sense when there’s some correlation between the broader markets and AAPL.

So, we went from 506 to 450 and back to around 465 in about a week.  Not great for anyone but opportunistic traders, really, but it certainly beats the alternative.  And today’s relative strength was much more impressive than yesterday’s uninspiring 5-point bounce.

We’re less than two days out from what I call the Second Trial of Sentiment – starting Friday, iPhone launch day.  Of course, long lines are a given.  (After all, Apple isn’t that doomed, and there’s only 400-ish stores worldwide and nowhere near enough supply-constrained iPhone 5S units to go around).  How long after 12:01AM Pacific time until iPhone 5S pre-order times slip and brick and mortar supplies run out?  How will Wall Street react?

Onto the hourly/daily charts.

Hourly chart:

aapl-hourly-091813close

– Who saw the gap up on the way after Tuesday?  I sure didn’t.  Nice going, if you did.

– A little too short a timeframe for an island bottom formation, isn’t it?  And yet Tuesday’s price action kinda sorta looks like one in retrospect.  Hey, I dunno.  More on this in the daily chart commentary.

– Is 465ish an potential support/resistance level (darker green line)?

– I suppose it’s a good sign that the Williams oscillator is in overbought territory again.  Given where AAPL is and where it was, though, it’s hard for me to be too bullish based on a two-day bounce of 15 points against a five-day cascade of over 50.  But that’s just me, and after-hours (where AAPL traded up over 80 basis points) certainly did indicate bullish sentiment, which was noteworthy.

Daily chart:

aapl-daily-091813close

– Is that a mirage, or maybe – just maybe – a kinda-sorta island bottom looking setup?  And if it is, where to measure from – the three candles where AAPL struggled to stay over 465, or the two candles where AAPL ultimately held 447ish?  Both sets of candles?

– Seems AAPL can’t go three days without a significant price gap in some direction lately.  Well, one level that _is_ fairly easily pointed out is 475ish (white line), which AAPL tried and failed to reclaim before it sold off another 25 points.  Potential action area?

– AAPL attempted to retake the 38.2% retrace level, and got somewhat close to the SMA-50.  It started above and held the SMA-200, which was constructive.

– I’m not calling “Right Shoulder Watch” off yet, considering the immense uncertainty heading into next Monday (which is when the market expects Apple to report initial weekend iPhone numbers – with some expecting 7.75M in combined iPhone 5C and 5S sales).

– Can AAPL make it a third day of gains?  That would be a bit different, since AAPL hasn’t been able to string together three winning sessions since mid-August.

It’ll be interesting to see if the markets continue their taper-free celebration tomorrow, and if there was something to AAPL’s strangely optimistic after-hours trading (what exactly it might have been, I have absolutely no clue).  See you on the trading floor.

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