With US equity indexes closing significantly lower, Apple (AAPL) was similarly on the slide, settling -2.0% @ $100.67. Near term outlook is for further downside. More broadly, AAPL looks set to test and eventually break below the Aug'2015 flash print of $92.00, after that.. next support is the 38% fib retrace (from 2009) of the $85s.
AAPL, daily
AAPL, monthly
Summary
Last week I noted that price structure for AAPL didn't look so pretty. The bear flag played out, and AAPL is seemingly headed (at least) to the Aug' low of $92.
If you believe the sp'500 is headed for the 1600s this summer, then AAPL is on track for next key support around $55. I realise that is a long... long way down though, and for now, it is in the realm of 'crazy talk'.
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*I've no position, and at these levels, shorting AAPL looks a somewhat more risky idea that just shorting an index.
Despite Star Wars VII on its way to becoming one of the biggest and most profitable movies of all time, Disney (DIS) continues to decline from the Dec'16th high of $114.75 (a black-fail daily candle no less), with a Tuesday net decline of -2.0% @ $100.93 (intra low $99.89).
DIS, daily
DIS, monthly
Summary
*DIS was particularly under pressure today after a downgrade from Macquarie
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Suffice to add, it remains a twisted market, one where the better stocks will often get under-valued, relative to the momo nonsense - like NFLX, AMZN, or FB.
DIS is unquestionably a superb company. Yes, there are concerns about ESPN, amid a potentially weaker economy in 2016, but broadly, it remains one of my top Dow stocks.
From a pure price perspective, DIS is seriously struggling, and looks set for continued weakness into the late spring/early summer.
Summer downside?
A simple fib' retrace from the 2009 low...
.. offers the 80/75 zone this summer. That would likely require the sp'1600s though, and that is a clear 20% lower.
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As for those torpedoes...
I would imagine that by the end of 2016, DIS will be surging back upward, as 'Rogue One' is due for release in December.
With US equities closing severely lower, the VIX was naturally screaming higher, back above the key 20 threshold. The 2x lev' bullish VIX instruments of TVIX and UVXY settled with sig' net daily gains of 10.4% and 10.9% respectively. Near term outlook offers higher levels in volatility.
TVIX, daily
UVXY, daily
Summary
*the closing hour saw equities spike into the close, and that sure cooled the VIX, resulting in TVIX/UVXY losing around half of the gains from 3pm.
TVIX'5min
TVIX loses half the gains in the closing hour
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Suffice to add, the third net daily gain for the VIX instruments, and considering the broader equity outlook, it would seem the VIX will indeed continue to push higher across the next few days.
VIX 30 is a viable target, and that would likely equate to a further 35/45% upside in TVIX/UVXY.
As ever though... such instruments are for very short term holds only.
Even if the broader market cools all the way to the sp'1600/1500s this late spring/summer, higher volatility in itself will only increase the problem of 'statistical decay'.
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*I have no position in the VIX, but with the Dec' equity close, I will consider trading VIX again in the weeks ahead.
