“Back on December 12, I declared that the Bear Rally was over. Although it may have seemed somewhat premature, especially after the auto-bailout injected at least some temporary life back into the market, it turns out the call was spot on. At the time my analysis was based on the Bulls inability to hold the 20 day moving averages, and advance through the 50 day moving averages,” Zach Bass writes for Apple Investor in the WIlderness.
“At the time of that rally ending call, Apple was at the peak of it’s rally, having gained nearly 24% off its November lows, at least intraday, by hitting 103.60 on December 11th. It was soundly rejected by strong resistance provided by it’s 50 day exponential moving average. The next day the stock and the indexes took a pretty good hit. That was my first clue, that if leaders like Apple couldn’t break through such levels with all that momentum, and if the indexes couldn’t hold their 20s, then this rally was a bust,” Bass writes.
“Should the market move down with any level of force today, I would expect AAPL to lose the 85 level, which will then become resistance,” Bass writes. “Once below that level, AAPL investors will find it very difficult to retake. So, my prediction is that if there’s no Christmas miracle, the S&P will play out the bearish pattern its in, and AAPL will be heading for new lows.”
Full article here.