Apple, Google, Mr Softy, and of course NVIDIA, are all under a magnifying glass as they grow to the sky on the AI hype that feels a lot like the dotcom hype. Instead of Pets.com, we have Chewy. Instead of Webvan.com, we have Grubhub, DoorDash, Instacart and many others. Tech stocks are all the rage like the party in 1999, a la Prince. Traders and investors, donning fleece vests with embroidered tech company logo's, kneel before Prophet Jensen that is holding up a black box that he calls the latest AI chip, but it looks a lot like a spray-painted Amazon delivery box. Companies are diversifying away from their core businesses these days buying goofy stuff like Enron back in the day buying bowling alleys and movie theatres not even remotely related to energy. It's fun to watch the greedy little humans.
Anyhoo, the previous Apple chart, linked here, discussed the potential triple top. There is an old adage among chart technicians that 'triple tops do not exist'. Apple was set up to answer this question as the three blue asterisks show on the weekly chart. If AAPL price would have fell from the third top, it would have proved that triple tops do exist, but alas, the hype from the WWDC conference created an upside Caligula orgy rally. Confucius says, "There is no such thing as a triple top." Well, it actually was a message in a fortune cookie in Times Square. In truth, Keystone has studied tens of thousands of charts and the trip tops are a 50/50 proposition just as many sustaining the triple top as there are charts that break up through nullifying the triple top like the Apple chart above.
Jumping over to the daily chart, the gold circle shows the golden cross where the 50-day MA crosses above the 200-day MA signaling bullish party time ahead. It is always fun to listen to the idiots on television and the internet discuss the golden and death crosses (the death cross is the black circle) since they always get it wrong. Sure, the death cross indicates price sogginess ahead and the golden cross indicates price joy, however, they let out the most important aspect of the patterns.
When a death cross occurs, price typically rallies for several days or a couple-three weeks. This is because a long sustainable downhill slide had to occur to send the moving averages lower and then cause the 50 to slip below the 2 hundo. After all that negativity, you would need a boost, and price does as well and will typically begin a relief rally. Visa versa for the golden cross, like now. When a golden cross occurs, price worked hard to pull those moving averages higher and get the 50 to cross up through the 2 hundo, so it needs to take a rest from all that partying. And the slump and pull back occurs as the chart shows. Time will tell how long the golden cross remains in play but, by definition, the 50 and 200-day MA's will not curl down until price drops below that 187 area.
On the AAPL daily chart, the blue lines show a W-pattern bottom, and a nice bottom it is as David sings. Sometimes the W bottoms have an extra hump; an extra hump never hurt anyone. W patterns are strong bullish set-ups and if under either the 50 or 200-day MA when it forms, it will be a stronger rally, and if the W forms under both the 50 and 200, it will be even a stronger rally higher once it breaks out. The W above in the daily chart is below both the 50 and 200, and it is 13 points in height so the breakout at 178 targets 191 which was achieved easily. The WWDC orgy took it up another notch.
The chart indicators on the daily chart all all in negative divergence except for the MACD line that still has some fumes in the tank to bring price up again in the daily time frame. Considering the doom and gloom presented by the other indicators that now want more downside, the MACD may be a moot point and price will continue to run its downside course in the daily time frame. If price comes up for a matching high this week and the MACD goes neggie d, you can call the top in AAPL in the daily time frame.
Note the huge selling volume on Friday. Traders and investors were cashing-in on Sapple while encouraging Joe Bagholder to buy the shares on the AI hype. Some say indexes, ETF's and funds have to rebalance their AAPL and NVDA positions due to weighting requirements and the expectation is for investors to reduce exposure to Apple and increase it to NVIDIA. However, NVDA's selling pressure on Friday was somewhat normal so the big volume appears to be more of an Apple thing. Perhaps the behemoth Sapple has run out of ideas and all they have to offer is different colors of the iPhone these days? Or are they on the verge of being one of the AI kings going forward.
Comically, the only ones that have made money in AI are the ones selling the chips and software. It is just like the gold rush where the big winners were the men selling picks and shovels to the sucka's. NVIDIA, Microsoft, Google, Apple, they have their chests puffed-out but what will happen when everyone realizes AI does not live up to the hype. Keystone has a new name for Artificial Intelligence. Let's call it 'Cut and Paste' or maybe 'Boilerplate Reorganization'.
If businesses do not understand, in detail, how the work flows through the company, and everyone's role, and every standard document and specification is available, AI will be useless. Didn't everyone learn this when the SAP software hit corporations in the 2003-2010 years and was supposed to streamline and revolutionize business? All it did was make companies realize how poorly managed and inefficient they were. You cannot polish a turd. You cannot make something run more efficiently with fancy tools if you do not understand how it works.
The red lines show the neggie d in play on the weekly chart. The MACD line and histogram have a hair of upside juice available although the MACD is clearly in neggie d over the multi-month period. The dark blue circle shows a Tweezer Top over the last couple weeks which tend to indicate a significant top. The long shadows extending upward make the candlesticks look like a pair of tweezers. This pattern also occurs at significant bottoms sometimes as well with the shadows extending downward and it is called a tweezer bottom. There is lots of talk about bottoms this morning with this motley crew. Girls, Girls, Girls. Woo!
The volume candlesticks show that most everyone that jumped in long on the WWDC hype, took the money and ran at the end of last week. The path ahead is down for a multi-week pullback. Price may try to jog higher over the coming days or week or so due to the stubborn MACD's, but if so, that jog move would mark the top and the start of the mutli-week move lower. The long romance with Sapple may be over. The Romantics.
Keystone is not long or short AAPL currently. If he played, it would be on the short side going forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added Tuesday Morning, 7/2/24, at 4:47 AM EST: AAPL 216.75.
Note Added Saturday Morning, 7/13/24, at 7:35 AM EST: AAPL 230.54. The bulls are pumping the rotten apple higher and higher after the triple top nullification. If you bring up the weekly chart, price makes a new high with the RSI flat, which is neggie d. The stochastics are also neggie d and both are overbot so this is all bearish wanting AAPL to place a top and begin a multi-week move lower. The MACD line, histogram and money flow eek out new highs, however, so they still have some fumes in the tank to help price remain elevated and even squeeze out a slightly new high. A jog move will be needed to turn the indicators neggie d (down-up), maybe even 2 jog moves, so AAPL will likely place a multi-week top anytime over the next 3 or 4 weeks. It could be in the week ahead if things deteriorate quickly. Price would not be expected to move substantively higher due to the neggie d and overbot conditions with the RSI and stoch's. But, as always, no need to guess, simply watch for when the weekly chart sets up with neggie d across all the indicators and you can call the top in Apple (this month) and start of a multi-week slide lower.
Note Added Wednesday Morning, 7/24/24, at 5:02 AM EST: AAPL 225.01. The negative divergence remains across all chart indicators on the weekly chart except for the MACD squeezing out a nose-bleed higher high. Thus, the top, on the weekly basis may need a jog move (down one week, up the next week for the top) for the MACD to go neggie d and verify the top. She's almost there. Apple should top out anytime over next couple weeks or so and begin a multi-week move lower back into that sideways channel at 165-195.
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