Starting with Apple, the trend is clearly down, every rally has been sold and there has not been enough volume recently to get me bullish. Looking at the count, there are five waves down, but it seems forced if one was to use it with high confidence. This leaves the door open to more possibilities, and ultimately more downside as long as the price tells us so. This more macro view, has us in a wave (v) of 5… targeting the $390-$345 region upon completion. A break of the prior lows put in around $419 should be the first indication that we are headed for $390.

To get me at all bullish on Apple in the short term, I would want to see a 5-3 setup, a break of the declining tops line around $450, and huge volume to confirm the rally. Until this happens, I am still bearish on Apple and expecting lower levels to be seen before any higher levels are touched. To go long Apple right now is fighting the larger trend… and fighting the trend is never smart.

Trend, trend, trend… I hope this is engraved in your brain once you are done reading this. Just like with Apple, the trend in Google is clear, its up. No matter what the fundamentals, technicals or sentiment the trend is up and price is the leading indicator.

There are obviously signs/indicators that we can use that give us a ‘hint’ that the trend is changing… but we must respect price. The current count in Google has us in a wave (iv) of 3, targeting the $850-$885 region before we can expect a pullback in a larger degree. In the short term, it seems to be working on a smaller pullback that might not yet be completed. It can still come down to around $804 on this pullback before the next rally begins. I still expect higher levels to be seen before we get a larger pullback. But, if the price does break $780 with conviction that would be my first sign that we are headed lower… with $730 being the nail in the coffin for the bulls.

You must remember not to fight trend, and let the price confirm a change in the trend if you so wish to trade against it.

—

Author: Peter Nitso
Twitter: @PeterNitso
pnitso@yahoo.com

Paper bought 10,000 CLWR June 2.5 Puts for $.10 (8.1 times usual volume) when stock was trading $3.16
Paper bought 1050 IEF Jan 2014 103 Puts for $3.10 (12.1 times usual volume) when stock was trading $105.60
Paper bought 1000 CAS June 15 Puts for $.80 (11.6 times usual volume) when stock was trading $17.08
Paper bought 700 GGB Sep 7 Puts for $.35 when stock was trading $8.21
Paper bought 10,000 AET April 43 Puts for $.12 (3.1 times usual volume) when stock was trading $50.46

Paper bought 1200 AVNR March 3 Calls for $.10 (3.1 times usual volume) when stock was trading $3.08
Paper bought 1000 CNC March 50 Calls for $.35 (2.1 times usual volume) when stock was trading $47.74
Paper bought 1738 PLCM Oct 12.5 Calls for $.75 (5.7 times usual volume) when stock was trading $10
Paper bought 3585 BMC Jan 2014 45 Calls for $2.80 (5.3 times usual volume) when stock was trading $42.90
Paper bought 8167 PXP Aug 50 Calls for $1.15 (9.6 times usual volume) when stock was trading $46.35

Paper bought 40,000 EMC Jan 2014 20 Puts for $.76 (5.2 times usual volume) when stock was trading $24.16
Paper bought 10,000 GCI July 24 Calls for $.90 (11.3 times usual volume) when stock was trading $21.21
Paper bought 927 JCI March 34 Calls for $.30 when stock was trading $33.76
Paper bought 7500 XRX Jan 2014 7 Calls for $1.99 (11.4 times usual volume) when stock was trading $8.71
Paper sold 16,600 LLTC March 39 Calls for $.15 (9.5 times usual volume) when stock was trading $38.50

Sometimes, I miss trades, because I am at a meeting, on the phone or away from my desk.  Every Morning when I
wake up the first thing I do is turn on CNBC.  I watch to see the
stocks that are moving in  pre-market trading.  I saw NAV jumping higher on
a variety of news.  So, then I went to my Unusual Options Activity
scanner and noticed a trader bought 12,000 NAV April 30 Calls for
$.65.  This was the biggest order over the last 10 trading days.  Let me show a breakdown of how much money
this trader made.

Paper bought 12,000 NAV April 30 Calls for $.65
(Paper is an order from a hedge fund, mutual fund, retail bank, or BIG trader)
Risk: $65 per a lot
Reward: Unlimited
Breakeven: $30.65
Cash Outlay for this Trade: $780,000

Greeks of this Trade:
Delta: Long
Gamma: Long
Vega: Long
Theta: Short

On 3.8.2013, these Calls are worth $6.15, so lets breakdown this trades Profits.

$6.15- $.65 * 100 * 12,000=  $6.6 Million Dollar

If a trader risked $1,000 on this trade and bought 15 Options they
would have netted $8,250

If a trader risked $5,000 on the trade and bought 75 Options, they
would netted $41,250

This is just another example of trading with the BIG money and Hedge
funds in the BEST Live Trading Room http://bit.ly/108XTgh as I
breakdown over 2,000 trades in a day and also tweet them on our
Premium Twitter feed http://bit.ly/WmtfI4

By the way, SEC leave those HNZ traders alone.

DeMark is the founder of Market Studies LLC and the creator of DeMark technical indicators. The indicators are used for market timing and technical analysts. The confluence of sell signals is very interesting considering we are near all time highs.

Charts From Bloomberg and Market Studies LLC

salerno.mark.a@gmail.com