Elliott Wave 5.0 "Reboot"

Sunday, March 3, 2013

Apple Bears are In the Drivers Seat.

Nobody really knows where Apple's stock price is going to go. Just five, six months ago they have been telling us that Apple is going to $1000 and even $1600, yet it continues to slide in price. Fundamental analytics just does not work when all the analysts are as emotional as the investors are. Analysts are paid to pump a trend. You would not want some major analyst yell Apple's going to crash to $420. $420 is a price where there always has been a big gap. I use the guideline that 90% of all gaps get filled and we still need more time to completely close one of the first and largest gaps.  Even then there is no guarantee that Apple is ever going to break $700 again as we have a steady decline in progress. If Apple was heading down into a gully, or into any type of previous 4th wave, I would become more bullish but this is not the case.

There is a bright side to this slide and that is, we have several gaps open that are above today's prices. . Heading back up, the first gap that would get filled would be at the $500 price level, and this would break the downward trend line as well.
In the short term I would like to see a huge spike develop pointing due south, and then I would expect a substantial rally.

 At the same time as analysts were pumping Apple's stock to go to the moon, insiders were selling as fast as they could, even before it crossed the $700 price level. Pumping by the mainstream analysts is how investors get sucked into buying high and holding. Another prime example of the Greater Fool Theory at work. Who was this greatest fool that bought Apple as it crossed $700?

Another good thing is that Wall Street has no memory so this big sucker game gets played over and over as new fools are always getting brainwashed to join the party.