A as in Apple

Apple is up almost 3% today, but that’s not why I’m posting this. Rather, it’s pretty obvious that Scenario A has transpired and that A+ (the immediate push down) can be discarded. As I’m writing this we are actually touching 2325 on the $COMPQ, which was the target for Scenario A rally. The critical level for the near-term bearish case is the 2353 wave 2 high – we are still ways away from that but let’s keep an eye on it. I personally never discard a probable scenario until the rules tell me so, which is essential in this whipsaw market.

We expect things to start topping out now as we are getting closer to the FCOM report. Nothing new to report until then. For the record: Although we have been supporting the bearish case as of late (i.e. Scenario A) I would not be too unhappy if we crossed 2353 since that would make trading a hell of a lot easier and provide us with more downside in the longer term. In the interim we remain stuck in sort of a ‘trading limbo’ in which the near term bearish case plausibly outweighs the near term bullish scenario, but we can’t be for sure (Berk actually is, but I am not). Frustrating for anyone out there – whether they believe in wave theory or not. Bottomline is that everyone keeps having to deal with a whipsaw market. So, a ‘final resolution’ is what we all are waiting for, but of course the market is going to continue to frustrate. That’s its job, right? 😉

My personal strategy for the moment is to sit on my short positions and eat losses until they either get stopped out or until the $COMPQ breaches 2353 (the former probably happens before the latter). If we see a strong move to the downside from around here (2325) then I plan to add a few short positions, as Scenario A will retain the highest probability.

Until I see 2325 breached I’m setting the short term indicator to down, and the long term remains down of course.