AAPL update: minor 5 fell short of expectations, intermediate iv underway ideally targeting $114-$104

AAPL’s minor 5 did unfortunately not reach as high as I’d ideally would have liked to see based on the bull flag it formed and Fib-extensions, but since we only interpret the market and not make the market it’s as good as we gets. With the trade below the minor 4 low, intermediate iv has been confirmed and price has already reached the ideal target zone based on standard 23.6-38.2% retrace of all of intermediate iii.

The first chart below shows the longer term off the major 4 low made in May 2013. Note the log scale and the red uptrend channels. 4th waves are notorious for whipsawing below the uptrend line, so a trade down to $104 is very possible. However, price is now extremely oversold on the daily, and at the very least I expect a bounce from current levels.

AAPL update 842015Zooming in, we can clearly see that off the red intermediate iii high, price has made an abc decline lower. Using Fib-extensions we can then see that the most common relationships for a c-wave, based on the length of the a-wave, measured from the b-wave high, all target nicely inside the ideal target zone. In addition, so far the lower trend line has held on a closing basis. At this point it is unknown if we’re dealing with all of intermediate iv or only with minor a of intermediate iv, with minor b and c to follow. BUT, given that intermediate ii was a zigzag, the rule of alternation between 2nd and 4th waves tells us that we should expect intermediate iv to be a flat correction, as such the coming low may very well be only minor a. Minor b should then move back to the low $130s area IF all goes according to text-book.

AAPL update 842015b

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