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At this point, you may question me in regards to why that I am still so
bullish and assertive on a reversal. Well, if you browse the daily charts of
AAPL and SPX closely and look for incidents when RSI Wilder's (settings 14) is
less than 20 RSI on both daily and hourly chart. The corollary is that
it has served as a bottom indicator and an immediate reversal would be taken
place. Please note, these extreme oversold conditions do not occur frequently
and it is recommended to keep track of them.
Although AAPL and SPX did not form a
hammer candlestick on the daily chart like my anticipated contrivance, but that
is alright. From what it looks like now, it is more likely that the upcoming
Monday (May 21, 2012) would be an extreme volatile day for the market that
shall have similar characteristics as of SPX on August 9, 2011. However, that
may not be the case for AAPL, as it may have double bottomed, no confirmation
though. SPX and AAPL have reversed at different times in the past, and it
should be noted that this is still a possible scenario for Monday. Whatever
happens on Monday, there must be a reversal. It doesn’t matter which scenario
happens, either the capitulation bottom or straight rocket at 9:30. Just remember
that these extreme oversold conditions do not occur frequently each year and it
is imperative to play these reversals to their full potential.
If the capitulation occurs, RSI
levels will reach an ultra extreme
oversold condition on both daily and hourly on SPX, the past few
incidents are huge short coverings resulting in a bullish hammer candlestick
reversal. Now, you may be thinking about the old saying, "past performance
does not guarantee future results". Bots play the game like this, you don't listen, your loss.
Admittedly, I am too lazy to screencap all the charts right now, so you do your own homework and browse through AAPL and SPX charts to look for the aforementioned RSI levels and conditions.
AAPL will reverse to a minimum of $560 this week. (new price target since last week's call of 555->540->530)
Two words for you all,
GO LONG
(then take some profits every staircase up)
Buy when there’s blood on the streets. Be the leader, not the sheep.
Don't ever be afraid
-Red Apple
