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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 (AAPL) Not Immune from Retest of Lows

December 2nd, 2008 • Related • Filed Under

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Yesterday’s decline was very telling. A lot of people got very excited over the market 20% gain last week, and Apple’s 12% gain. But you must know that even though it was spectacular, all it did was set us up for yesterday’s (December 1) huge sell-off. And more importantly for the impending doom to come.

 

 

This chart of the Volatility Index (VIX), which I sent out to Wilderness Email Alert subscribers, show a very nasty pattern forming. As much volatility as we’ve had so far, I believe the grand daddy of all is coming soon. You can see that previous bull flags set us up for historic volatility, but now we’re setting up in a bull flag that is several orders of magnitude greater. And I wouldn’t be surprised to see triple digit numbers in the VIX.

The market is looking for a bottom, and it’s going to find it. But the timetable is not fixed and the depth of how low it can go is not certain. So what does that mean to the markets? Doom if you’re a Bull. Possible nirvana is you’re a Bear. You gotta short this market man! Enough said.

Now I was quite impressed with Apple’s ability to stave off the huge decline yesterday, but there will be no place to hide when this monster takes hold. Apple may very well see the 70s, possibly even the 60s. Does it deserve to be there? No! Is there any rational fundamental explanation for it? No! But mark my words, if we see 666 in the S&P we’ll see 60 in AAPL.

More on this topic (What's this?)
What’s going on at Apple? (Part I) (The Curious Investor, 12/17/08)
Apple (AAPL): Steve Jobs' Replacement? (market folly, 11/19/08)
Apple Inc (AAPL) Target Lowered (Short-Term Trading, 1/2/09)
The End of Steve Jobs ™ (The Curious Investor, 12/18/08)
Read more on Apple, Volatility Index at Wikinvest

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