Apple Investors are Going to Hell and Back
Yup, we’ve been there before. Hoped we’d never return, but it’s in our destiny. Today’s action made certain of that. We’re going to retest those lows. Conventional wisdom says that’s how Bear markets come to a close. You go down for that initial plunge, shoot up to catch your breath, then take another plunge, touch the bottom just to make sure it’s still there, and then rocket up above it all, free from the weight and friction. And you find yourself floating atop the sea of despair that had previously engulfed you.
It’ll be liberating. Right? Investors will feel that they’ve endured enough already, and that they deserve a strong rally. But wait, what if it’s not the bottom? What if we whiz past the recent lows and head for the lows of 2002, what then? Or even worse yet, what if we lose the 2002 lows, will there be any rally? Will there be any way out of this morass? Or will we be so far gone that all we’ll be able to muster is a knee scraping crawl for the next few years? If we continue down this path, there will be much suffering.
I don’t like thinking about this kind of suffering, but it’s necessary to confront it, see it for what it is, why it’s there, how it affects us, and most importantly, how to realize a plan of cessation for that suffering. I’ve always been the eternal optimist, where every obstacle, every adversity, every instance of suffering, presents an opportunity to learn, to grow, to find the path. I mean, what’s the alternative? To Fail? I think not!
So, I won’t complain about Secretary Paulson’s indecisiveness, and total lack of leadership, as the primary cause for our drop in the market today, or the horrific earnings and dismal guidance from Intel in the after hours, …oh, and let’s not forget the complete inability for AAPL to catch a bid and hold that critical 95 level. Nope, won’t do it.
Instead, let’s look at what we have. Or should I say what we don’t have? What we don’t have are buyers. For that matter, with such light volume, one could argue that we don’t have sellers either. If we were in fact looking for a bottom, we’d much rather see lot’s of volume on the way down. That way we could be relatively certain, as the market came down, the sellers would wear out. But in the last three sessions, volume has been extremely light.
Perhaps one could argue that the sellers are already tapped out, and the buyers are simply biding their time. On the other hand, you could also presume that the sellers are biding their time, waiting for the markets to approach those old lows, then jump on board and slam the market straight to hell! In either case, one thing is for certain. This market is going down hard if we take out 839 on the S&P, which of course is our previous low for this current Bear market, and the 50% retracement off the highs.
So, if we take out 839, then we’ll probably visit the 2002 low of 775. So, where is hell? Well, if we take out the 2002 lows, then the next level of support would be the Fibonacci level of 61.8% retracement off the highs. And I’ll give you one guess where that level is… As unbelievable as it sounds it’s 666. So, there you have it, hell!
