1. Apple (AAPL) stumbled on Thursday, slicing through $125 and ending the session near $120. The stock is now within a point or two of its 200-day exponential moving average. The last time we saw the 200 EMA on Apple was mid-April 2014, so you can bet there will be a lot of chatter should that reference point be tested. In addition to the 200 EMA, the stock also has an open gap near $115 dating back to late January of this year.
The bottom line is this: With the short- and intermediate-timeframe moving averages beginning to break lower, and no real price support coinciding with the higher-timeframe 200 EMA, I would not rule out a test of $115 in the immediate term. Should that gap hold (not something I am inclined to bet on), perhaps we can pop back up toward $122 to $123 in the near term. However, my inclination would be to look for a continued decline toward the early January $105 swing low. That's where I'd be interested in revisiting the stock on the long side.
2. Several readers have inquired about coal stocks, and whether I saw a reason to roll the dice on them surviving. As I flipped through the names many of us once traded, I realized something quite sad. One would now spend more money on a cup of coffee at Starbucks (SBUX) than they would on buying a single share of Peabody Energy (BTU), Walter Energy (WLT), Alpha Natural Resources (ANR) and Arch Coal (ACI), combined. The bottom line is that the coal sector was on the current presidential administration's hit list. And while I don't want to turn this into a political argument, the administration won.
If something dramatic changes (a few bankruptcies for example), I'll take another look. But for now, remove them from your watchlist and devote your attention elsewhere.
3. Setting aside the incessant gaps being triggered by events in China and Greece, we need to respect the continuous rejections of the eight-day EMA on the S&P 500 cash index. This is a crystal clear indication that the short-term trend is bearish. We'll adjust our posture as the trend changes. But for now, strength is to be sold, not chased.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at firstname.lastname@example.org or posted to my twitter feed @ByrneRWS