JUST LETTING YOU KNOW…
I believe I’m looking at a photo album of familiar faces. We look for breakouts and breakdowns. We look for extreme action—things like climactic runs.
When things are strong, we’re also looking for what’s weak or what’s turning weak. It’s easier to isolate what’s weak when things are stronger.
When things are weaker, it’s easiest to isolate what’s strong or what’s being accumulated. Why? When everything’s going down, the strength sticks out.
So as you know, we’ve had this persistent move up. There was a follow-through day on December 20th.
That may be starting to change a little bit.
There were some eye-opening occurrences today. I’ve already printed out the charts of what I’m seeing today and put them into my files. I’ve already looked in the historical charts in my files to see, “Is that how it looks?” The answer is “Yes.”
Apple
Today, Apple hit a high of 526, but closed at 497, down 12 on 54 million shares traded. The average daily volume is 12 million. Today’s was the largest volume of in the past year. So what you simply have is, after a magnificent run since its recent gap on earnings, Apple hit a wall today…and a pretty big wall. Odds are, on a short-term basis — that’s it for the move.
Typically, you’ll see it work off some more of this recent gain.
I have taught you about climatic runs. It occurs when a stock is in a bull market. It goes higher and higher and then, out of nowhere, it does what I call an Eifel Tower–literally, straight up in its move. Typically, that’s the end of a move — when you get that big day that turns around on heavy volume.
It doesn’t happen often. Just in the last year or so, there were two that stand out like a sore thumb. First it was silver (SLV). Look at that Eifel Tower going into the April 28th high. In fact on April 27th and April 28th, I told you on my radio show that I thought it was doing a climactic move. And typically what happens is that you go straight up…and then straight down. That’s what silver did.
Go back about a year…Las Vegas Sands (LVS). The date was November 5, 2010. Las Vegas Sands was in a bull market and it went from 36 to 55 in eight days, culminating with that day where it hit 55.47 and closed at 51 and change on 92 million shares traded. That was it. The stock was done.
Only now did Las Vegas Sands get back get back to that 55 area (it’s now at 51).
I make no predictions. I’m just letting you know. It just seems like Apple has completed a little climatic move.
As you know, I bought off the gap. I sold into today. Just letting you know, I think today could be important for Apple. Never 100% sure. There’s no 100% here.
But again, we have precedent. I printed it out and put it up against all the other climatic moves I’ve seen over the years. And it looks pretty much like every else.
I’m not telling you what to do. But I am telling you what I did today. You get to decide for yourself. Could the stock just decide to ignore today and just go higher? Sure. I’m just letting you know that precedence says otherwise.
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Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.
