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Zach Bass (a.k.a Ernie Varitimos) is Chief Bloviator of Investor in the Wilderness. He has 30 years experience as a Tech Maven, Investor and Consultant. Zach has been using Macs since their introduction in 1984, and investing in the markets just as long. His mission is to help guide all level of investors through the Apple Ecosphere and make sense of the markets. Zach's take on Apple, the markets, and life pursuits, will keep your mind tuned.

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Apple Investors Get that Dry Powder Ready

August 8th, 2008 • Related • Filed Under
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Check out the $BKX, the Banking Sector, it was down 5% ! This was primarily due to AIG and a 30 year Treasury auction. AIG took massive losses and was down 18.05%, WOW! This is going to get the talking heads squirming.

The Naz just barely was able to hang on to support yesterday (August 7) using the 50- day SMA (2356) to finish at 2355, the 50-day EMA is just below that at 2340. It looked like earlier in the session we might have a chance to continue the Naz breakout, but mid session the steam ran out. The S&P and Dow are big time laggers of the Naz, and fell even further on the bad Jobs report, AIG, and many other factors.

The big questin now isn’t whether the S&P and Dow will follow in the Naz footsteps, but whether the Naz can hold the support it has now. If the Naz loses the 50-day EMA, then we’ll most likely test previous lows. But I think this market has had enough and we’re going to see the positive divergences on the weekly charts start to kick in.

To harken back to yesterday’s analysis I said we would need another move down to strengthen those positive divergences on the weekly charts. And now is the time. If you are in cash as I have been advising over the past couple of sessions, then you should be ready to take part in what I believe will be a good Bull run. Happy Trading!

UPDATE (Friday Morning @ 8:27 AM EST):
Futures were looking up until Fannie got Her gun and shot herself in the head with $2.3 billion in 2nd quarter losses. But I believe investors are going to shrug off that news and the positive divergences that I have been talking about in the weekly charts of every index will start to take over.

I believe yesterdays push down was the last straw that strengthened those divergences and peaked negative sentiment. So look for a muted start, followed by a strong follow through. I guess I’m sticking my neck out here acting like a seer, but that’s what the TA leaves show me.

PS: I’ll be going on vacation starting tomorrow for two weeks with the family, this is our 18th yearly excursion to Martha’s Vineyard. I’ll still be posting my daily analysis, it just may be a little more irreverent and elated than my normal style. Here’s where I’ll be spending a good portion of my time…

Click here for a picture gallery from last year’s MV vacation. This is what I live for.

More on this topic (What's this?)
The End of Steve Jobs ™ (The Curious Investor, 12/18/08)
What’s going on at Apple? (Part I) (The Curious Investor, 12/17/08)
Apple Stock Struggles With $180 Resistance (Stock Trading To Go, 8/21/08)
AIG Stay of Execution: Holding Company Can Access $20 Billion of Subsidiary Capital (naked capitalism, 9/15/08)
Read more on Apple, American International Group at Wikinvest

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