Page 18 | Applelong — Trading Ideas on TradingView

Apple: Low volatility, volume and price- where are the bulls at?Volume Apple-0.09% Volume continued falling on Tuesday and Wednesday, -5% on each to 20.8m which is 45% below the 1 month average at 38.5m and 50% below the 6 month average at 40m. This is Bullish IMO as it shows that at these prices holders are not willing to sell their AAPL-0.09% risk at these prices, as they seek higher prices before they offer higher supply, hence volume stays low and the stock trades with a bid bias - hence the gap up at the open today - illustrating the supply & demand disequilibrium caused by low supply side liquidity and maintained order demand. However, volume has contracted significantly every day this week, losing over 20% since the week start, providing a promising environment for apple-0.09% growth, but the stock has struggled to hold onoto any gains, with candles often closing in the lower 25% quartiles of their ranges - indicating the stock isnt necessarily looking to push up yet. IMO the stock requires more new buyers, it isnt a selling problem its a demand side issue. With the SPX0.33% rising, it shows liquidity is increasing in risk assets so im not sure why apple-0.09% isnt receiving some of the new liquidity and posting upside gains. Volatility & Apple-0.09% vs VXAP Correlation We continue to have a bullish view from a vols perspective as implied vols dropped yesterday over 1% to 20.90. Apple-0.09% vol0.00% carries the trend with volume , falling every day this week and now sits at lows from June 2015. Also the correlation between APPLE-0.09% and its Implied volatility index continued to maintain deep into negative territory - at 93% falling marginally from 94% yesterday. This reinforces the bullish volatility signal - as historically, a higher negative relationship sets the best environment for Apple-0.09% growth. However, the correlation dips slightly, as PRICE that is starting to fail the relationship - as when correlation falls price SHOULD rise hence the high negative relationship. However, price is trading flat/lower thus the correlation is becoming more positive (lower vols and lower price = positive corr) Evalutaion Both the falling implied vols and volume , all of which in record setting/ bullish areas provide the perfect environment for growth so as per the last 3 days I am bullish on apple-0.09% and STILL expect a $100 break out to 101/2 this week, though the probability falls significantly, but thrusday is usually the best day for gains, with friday being the worst. These indicators make me especially bullish as the lower volume and vols are occuring whilst apple-0.09% trades close to 100USD, where usually, the psychological level causes volume to spike as the uncertainty causes sellers and buyers to flood the market - Which as a result also cause volatility to spike. Given that we havent see this, apple-0.09% should be comfortable with a price hike and is showing strong signs that this is the case. I feel apple-0.09% needs some upside stimulus at these prices and it will cause a cascaded rally from 100 to 1005+ in a short period of time. We just need to get past this 100 level, which keeps growing its strength every day

APPLE 4% ALGO SPIKE? LOWER VOLS & VOLU; HIGHER NEGATIV VOLS CORR Algo spike 4% to $101.8? At 18:19 BST Apple stock surged from 99. to $101.8 and back again all within a minute. It was Likely to be algo driven OR a data/exchange error - though no news outlets reported either or offered any other speculation. Though $101.8 is the closest near by resistance strong hold for apple, so it would be a weird coincidence for a "data error" to trade to that price - equally as possible none the less. IMO, because there was little volatility after the event and also because Apple is now struggling to break the $100 i think it was probably a data/exchange error. If it was an actual demand induced algo spike, the stock would have experienced signifcant price volatility after the event as much of the markets TP/SL levels would have caused a large wave of stochastic automated buying/selling as positions are closed out. Further, if the spike was real, apple should have been able to trade above $100 easily today; 1. As $101.8 would be a clear bull target level. 2. as the spike would have removed all of the $100TP selling pressure last night - meaning there would be little volume left to continue long squeeze selling today (which annoyingly has been the case). Volume Apple Volume fell significantly on Monday by 40% to 23m vs 39m (1month av.) and 43m (6month av.). In the first half of trading today, volume was also 7% down from yesterdays first half at 11.23m vs 12.0m - signalling today may continue the bullish trend. This is Bullish IMO as it shows that at these prices holders are not willing to sell their AAPL risk at these prices, as they seek higher prices before they offer higher supply, hence volume stays low and the stock trades with a bid bias - hence the gap up at the open today - illustrating the supply & demand disequilibrium caused by low supply side liquidity and maintained order demand. Volatility & Apple vs VXAP Correlation We continue to have a bullish view from a vols perspective as vols dropped yesterday despite an algo driven spike to $101.8 (4%). Apples CBOE VXAP continued to sell off, closing yesterday at 21.64 from 21.73 Friday. Also the correlation between APPLE and its Implied volatility index continued to fall deeper into negative territory - surpassing levels seen in the last bull run to $112 which peaked at 90% (92% to 94%), This reinforces the bullish volatility signal - as historically, a higher negative relationship sets the best environment for Apple price growth.

BUY APPLE: 2016 @$117 & 2017 @$151 - HISTORICAL MONTHLY ANALYSIS Apple shows a strong and consistent monthly trend of each bull-bear cycle lasting approximates 2-3 years. The first bull cycle yielded between 200% and 700% growth, the second much less at 145% growth, and the third we estimate using regressions to be approximately between 67% and 106% (or 67% for the next bull run to $151 and 105% for the 4th bull run to $181). Looking at apple from this monthly perspective gives me reassurance that the $134-$89 or 33% pull back we just saw was merely a macro cyclical correction (which was actually less severe than the pullback in 2012) rather than a structural bearish re-trend - assuming we go on to make $150+ highs in 2017. With this assumption/ thought in mind it actually makes sense to buy apple heavily whilst its at such a discount - after-all apple historically has shown steep price extensions that offer few significant (-10%+) pull backs to buy, thus we should realign our attitude to factor in where apple sits in its cycle. It is often too easy to get caught up in the daily +/1 $2 moves, you sometimes can forget the bigger picture of making the most of a great stock fundamentally, thats trading at 10x p:e. A key statistical measure that reaffirms the above is Apple's monthly price action and its 120 month Linear regression line which together returns a Pearson's R Coefficient of 0.95, meaning time and price as plotted on the x and y axis for Apple hold an almost perfect linear relationship (Apples data is 95% about the linear regression line). This means we can extrapolate the price trends for the bull-bear cycles, by simply extending the x axis (time) along the regression line to estimate future prices, to a decent degree of statistical relevance. If the Peasron's R Coefficient was 0.1 it would mean monthly prices are only 10% about the regression, thus extrapolation of price through time would LIKELY yield very little correlation to the actual future price, based on past prices. Look out for my fundamental analysis of apple in the coming weeks

APPLE LONG: $151-$182 - CYCLICAL ANALYSIS & REGRESSION FORECAST Analysing Apple's (AAPL) historical cyclical price movements and using the +/- 2SD of the linear regression to forecast a naive regression price for the next extension phase. * Extension leg Regression Forecast* 1. For leg A (Extension Leg 1) we use a start point of $12.5 or $33 (phase doesnt have a clear start), or we could assume a mean value of (12.5+33)/2= $22.75. - Leg A is then, $12.5, $23.5 or $33 divided by $100, which means Leg A is a price increase of = 700%, 310% or 200% 2. For Leg C (Extension Leg 2) the price increased from $55 to $134.5 which is a 145% increase. 3. For Foretasted Leg E (Extension Leg 3), we start at $89 and we derive the price "%" increase by: - Using the regression of the price increase % from Leg A to Leg C e.g. 145%/700%= 21%; 145/310 = 46%; 145/200= 73%, so this means for each of the calculations we can then assume each is the regression growth differential from Leg C's 145% increase to foretasted Leg E's "%" increase 4. e.g. Foretasted Leg E / Extension Leg 3: 21% of 145% = 31% increase; $89 * 31% = $117 or 46% of 145% = 67% increase ; $89* 67% * $89= $151 or 73% of 145% = 106% increase; $89 * 106% = $182 - Thus Apples Leg E/ Extension Leg 3's Naive Regression Forecast = between $151 and $182 * As shown on graph. Furthermore, another interesting statistical measure for apples 10year/ 120 Month +/-2SD channel was that the Pearsons R was 0.95. This means that the linear correlation between Apples Price over the measured time period was 95%. 95% of all values observed lie averagely on its linear regression line (middle line of the Stan Dev channel) - en.wikipedia.org/wiki/Pearson_product-moment_correlation_coefficient - Having such a high Peasons R means the regression line holds true for 95% of past data and therefore is MAY also include 95% of future data thus extrapolating the linear line (or using basic regressions as i have done) is of some statistical significance. A Pearsons R coefficient of 0.3 means there is little positive correlation between Price and Time, thus extrapolating prices through time using basic regressions/ forecasts is much less statistically prudent, since only 30% of past data correlated about the linear regression line.