With AAPL -8% in the pre-market right now, NASDAQ is inflicted another hit to the downside and another sign of an important top that was made at 4574.
As I have been sharing my charts through twitter I see the potential of a big bearish reversal in equity indices and NASDAQ being the leader as major components/companies show bearish reversal signs. Even from the Elliott wave perspective NASDAQ is expected to turn south. Even the stochastic oscillator is giving warning signs.
Big names like Microsoft, IBM, Netflix, Facebook, Apple, GOOGL, TWTR all share one thing. Increased bearish potential in their charts. Starting with Apple as I have pointed out several times before, the 110-115$ area was the place to sell as resistance was there and price got rejected.
MSFT, NFLX and FB have double top formations.
AMZN could be forming a lower high as it has increased probabilities of turning south from current levels as stochastic is overbought and RSI diverging.
IBM has reached important resistance levels and is back testing the monthly Kumo that was once support. A pull back to re-test at least the blue trend line support is expected.
TWTR is down 14% today. Still inside its bearish trend it has not managed to reverse the trend since early 2014.
GOOGL (Alphabet Inc) has a lot of chances that a 5 wave formation since 2009 is complete. This means a deep 3 wave retracement should be expected of a magnitude at least of the 38% Fibonacci retracement.
AMZN is expected the next few days to report earnings and I will not be surprised to see price follow the direction APPLE shares took.
All in all big cap stocks look like they are starting or close to a big correction. This unavoidably will also affect the rest of the stocks. Combined with the fact that SPX is stretching at overbought levels with big bearish divergence by the stochastics and the RSI, Bulls need to be extra cautious.
The thin cloud below suggests that we are going to test the 2000 level at least if not lower. Technically in DJIA and SPX we have no reversal signs yet like we had in NASDAQ, so be careful front running a sell off.
Thank you for taking the time to read my latest post.