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Market Report: Is Apple a Blow Off?

Anyone that has studied the markets for a length of time, should really have seen many examples of a blow offs over the past 10 years or so, there appears to be a characteristic that you see just before the eventual reversal.

Apple Blow Off
Larger Image

It's usually a large bodied candle that far exceeds anything that was previously seen.

Today AAPL exhibits that characteristic, and if history is our guide, then AAPL is in blow off territory.

So if you are long AAPL, I strongly suggest locking in gains and even taking partial profits, as history has a habit of reversing these types of moves and the reversals are aggressive and strong as everyone runs for the same exit.

If AAPL does reverse, you can bet "no one saw it coming" will be the headline.

Apple Blow Off Candle
Larger Image

Yet just looking at the DNA of many previous blow off style type of moves in many commodities even as recent as the gold and silver manias in 2012, you can see that prior to a reversal you get a strong upside large bodied candle that dwarfs anything seen.

Apple is now trading like a commodity and history shows when you see parabolic moves like this, it ends badly.

So my conclusion is that just like I was advising traders to get out of gold and silver in the blow offs we saw in 2012, I strongly suggest traders now look for an exit, or at least lock in stops.

Until next time.

Have a profitable week ahead.

 

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