Thursday, December 20, 2012

AAPL Line in the Sand






AAPL broke its micro ext. long.  Now the LIS for bulls is $514 which is the 61.8% Fib level of the full range, low to high.

8 comments:

chin said...

Jamie, I think its more of an attempt to fill the gap at 519.19 from Monday.

Jamie said...

Good eye Chin,

I thought it was filled, but it didn't fill completely.

OPEX tomorrow, so I guess everything has slowed down due to pinning as well.

chin said...

What does this mean ? the island reversal is not there any more ?
Why is a gap fill so important ?

Jamie said...

Correct. Generally speaking, wide gaps are considered to be professional gaps and we trade in the direction of the gap, unless the instrument is extremely overbought/sold. Small gaps are usually filled. The gap traders position themselves to fill the gap. Once the gap is filled, they close the position.

chin said...

seems like this is what happened just now. Option max pain will be there around 530, I feel. Huge # of calls there.

chin said...

Good morning Jamie,

a wild day today.. what happens if AAPL retests the lows ?

Jamie said...

Chin,

Very wild. AAPL currently testing the original setup. If this fails, the target for the shorts is $488.50.

I not inclined to re-enter when it becomes obvious that the bears are still in control.

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