Apple ~ Daily (Log) with Support REPRINTED from 1/23/2011

Last week saw the “greatest company and stock in the history of mankind,”
Apple, blow out all earnings and revenues estimates for the quarter. The
stock promptly traded down for the rest of the week.

Apple is quite likely the most “over-owned” stock amongst hedge funds and retail investors.
Therefore, it will be the most vulnerable to elevator moves down. People who are “long”
AAPL stock should pay close attention to the 320-322 zone. That’s the area of the 23.6%
retracement of the most recent advance as well as classic chart support. A daily close below
320 would suggest a move down $279/share, the next most obvious area of chart support.

Andy’s Technical Commentary__________________________________________________________________________________________________

 Apple ~ Daily with RSI and Support
The reason why we occasionally think about Apple is because it is the Maybe a H&S forming here?
“vanguard” of the large corrective move that began in Mar ‘09. “Everyone”
is long Apple and the company has 100% Brand recgonition--nobody is
unfamiliar with the Apple “story.”

A month ago, we pointed out the critical support at 320-322 for Apple. It held that
area nicely and produced another new high. However, it triggered very sharp Daily
RSI divergence in doing so and is now on short term support at 348. A break of
348 should cause AAPL to trade down to 326, the next level of support.

Andy’s Technical Commentary__________________________________________________________________________________________________

 Apple ~ Weekly with Fibonacci Support
This is a much bigger picture look at AAPL. That $326/share support price
coincides nicely with the first (small) level of Fibonacci support at $324 (14.6%).
$298/share, the 23.6% retrace matches up with an important inflection point in
November 2010.

Two week ago, we pointed out the critical support at 320-322 for
Apple. It held that area nicely and produced another new high.
However, it triggered very sharp Daily RSI divergence in doing so
and is now on short term support at 348. A break of 348 should
cause AAPL to trade down to 326, the next level of support.

So, to summarize, the message of the previous slide and this

one: There is minor support at 348; medium term support
lies in the $323-$326 zone; critical longer term support
comes in at $298. Longs/Bulls should pay close attention to
these levels and adjust “stop loss” strategies accordingly.

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 ~ Daily non-Log Scale
(B)
“y”
The pattern up from the 1040 has now become very difficult to determine. We’ve been pointing out
the lack of clear “impulsions” higher, which means we’re dealing with some sort of corrective g?
pattern higher. I’m suggesting a “diametric” labelling here, but there is little conviction in this
counting. e

c f
b
REPRINTED from 2/13/2011

“w” a
d
d
b

a
1040
e
c
“x”

If this happens to be the correct larger degree counting, the “x” wave corrected exactly
23.6% of the “w” wave. One possible target for the “y” wave would be 61.8% of “w” at 1339.
That level would also be 38.2% of “w” measure up from the top of “w.” So, we will stand
back and observe how the market behaves into 1339….

(A)

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 ~ Daily non-Log Scale
(B)
“y”
This market continues to grind out the bears by relentlessly moving higher without any appreciable
correction of any kind. The pattern up from 1040 is best described as a “corrective” move of some g?
kind, which is why we prefer the “diametric” labelling. It will be difficult to know exactly where this
type of pattern will conclude. It will take a correction larger than what we saw on Nov. 2010, the
e
blue dashed box, before can call an “end” to this pattern.

c f
b

“w” a
d
d
Alt: “w” b

a
1040
c
e
“x”

Last week, we suggested that 1339 might be an area of

resistance given this wave count. While we did not see
any evidence of peaking action into this zone, the market
did “slow down” into this area at the end of the week.

(A)

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 ~ Daily w/RSI

These converging trendlines on the Spot price and RSI were highlighted last week. It’s
worth reinforcing the “picture” here once again as the heavy blue lines seem very important.

Andy’s Technical Commentary__________________________________________________________________________________________________

 S&P 500 ~ Daily with Weekly Support and Resistance

We’re not even worrying about “resistance” points on this week’s update,
because that’s not what we’re watching for. We’re waiting on this market to
break key support or show some sort of “peaking pattern.” The S1 and S2
for this week are 1325 and 1275. We’ll sell 20% of a Max Short on a
break of the blue uptrend line highlighted here.

Andy’s Technical Commentary__________________________________________________________________________________________________

Gold (Feb11 Futures) Daily

Head
Left Right
REPRINTED from 1/23/2011 Shoulder Shoulder

Left
Shoulder Right
Shoulder

I heard some people on CNBC talking about this insipient head and shoulder top on
Gold--which means that we’re likely not see it develop the way we “think” it should
develop. Outlined here would be something “textbook.”

We said last week that gold looked like it wanted to trade lower. It’s not disappointing
as our R1 from last week held perfectly at $1,379. New shorts should consider
lowering their stops to $1357 now. The $1,320’s should create support for gold. If it
doesn’t, then gold would be on a “glide path” to $1,265/oz.

Andy’s Technical Commentary__________________________________________________________________________________________________

Gold (Feb11 Futures) Daily

Right
Left Head
Shoulder
Shoulder Right
Shoulder
??
Left
Shoulder

A month ago, we highlighted the possibility of this Head and Shoulder pattern, suggesting
that 1320’s would provide support. Gold closed at $1,318.40 on 1/27/11 and then
produced a richochet rally. The move down from the first “Right Shoulder” was “corrective”
in nature, which is why we thought there was a good chance of seeing a bounce to create
the second “Right Shoulder.” At this point, the bounce we’re seeing is more robust than we
would have predicted and any “ideas” about a “Head and Shoulder Top” or “Rounded Top”
are about to get tossed in the trash can. Bears need a reversal immediately to maintain the
“look” of a longer term peaking pattern.

A break of $1,425/oz would like quite bullish for the near term. Weekly support for
APRIL Gold Futures comes in at $1,385 and $1,369--new bulls should consider those
levels for “stop loss” strategies.

Andy’s Technical Commentary__________________________________________________________________________________________________

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