Apple top, VXX bottom?

The last time AAPL got this high, it sold off and the Flash Crash marked a near-term bottom. Shares then ran back up to the 265 range twice, selling down to lows of 231 and 242 along the way. Yes, it's been one of those years for AAPL investors, a series of fantastic production and sales. If there were no global economic slowdown, who knows how much higher AAPL would be?

At 271, AAPL is threatening to break out and put bears in a world of hurt. With stochastics at an overbought level (89.45) and the general market also overbought according to several indicators, AAPL seems destined for a pullback. But could that line of thinking be wrong? Maybe.

1. Quadruple witching this week will climax tomorrow, marking the end of a propped up week or the beginning of a new move up after two months of bearish activity.

2. Though AAPL appears to be overbought, it has a history of staying above 80 (stochastics) before. From late February to late April, AAPL stayed at 80 or above and shares went from 205 to 272.

3. Not a technician here, but how often does a chart show a triple or quadruple top? With bulls so persistent, AAPL simply refuses to break down. Not that it can't happen, but if we're heading into another global crisis, AAPL could certainly fall below 200, 150, even 100 again. Would it be the China real estate bubble? The second wave of US mortgage destruction? Euro discard?

So, we could be in for two months of bears screaming that AAPL is about to sell off. Or AAPL could finally complete its consolidation and launch into another galaxy. That's why I really don't see the point of shorting AAPL, especially here. Demand for iPhone G4 is massive even as jobs numbers are mediocre. The iPad is selling far beyond even the most optimistic expectations.

If AAPL sells off from here, I won't be shocked. The market isn't exactly manic with bulls here. There is simply a shortage of selling and inflows still aren't that great and probably will take a long time to rise back to pre-Flash Crash levels. But AAPL has been tagged with projections of $300, $325 and $330. Take away all the negative catalysts in the broader market, and there's no reason why AAPL can't get to 330 or higher.

With that in mind, VXX has usually been the evil twin of AAPL, rising when AAPL sells off and fading when AAPL explodes. If 271-272 is the ceiling for AAPL, VXX may be a buy here below 26.

I love me some Apples, and when I buy some again, VXX will be my hedge. For now, I remain on the sidelines, watching with 100% cash.

AAPL 1-year chart (daily)

AAPL 2 month chart (daily) vs. VXX

AAPL 5-day chart (15-minute bars) vs. VXX

AAPL 2-day chart (5-minute bars) vs. VXX

They're almost a perfect hedge against each other when paired. VXX isn't chartable, really, not like most stocks. But it's worth noting that shares touched the 200-day average and came back toward the 100-day average, bounced back to the 200, and now have dropped back to the 100, where it sits now. Also, the 100- and 50-day averages are converging here, right as quad witching beckons.

VXX 1-year chart (daily)

Shit's about to stir tomorrow, just my guess, and unless Santa Claus has a lot of early gifts for us all, I don't see a catalyst for the bull argument just yet.

Candlestick analysis
AAPL: "Hold" (American Bulls)
VXX: "Wait" (American Bulls)

Respect the Mag-maaa

Preposterous. Ridiculous. Ludicrous. There are all kinds of words to describe the carnage done to some of the world's best publicly traded companies. But the reality is, like the last homeowners who try to stand in the way of a lava flow, logic has nothing to do with it. You either get out and save yourself, or stay put and get steamrolled by tons of fiery magma.

Simple as that. Simplicity is rarely easy to execute, of course.


Even Potash can't escape the storm. Not cheap, though, even now.


What do you do with good stocks gone bad? Best to wait it out.


This is real strength here. Impressive, but not a reason to dive in.


All the solars fell off a roof, including the best of breed. Not cheap. Not yet.


Mickey D cuts against the grain. Not cheap anymore.


This chart defies the rest of the market.


Interesting that PetroChina dropped while its cousin CNOOC gained.


Not a thing wrong with Disney. Just caught in the tide.


Flowserve takes another hit, but still not cheap.

Apple looks cheap, but who dares to enter?


China Mobile? Now this looks cheap. I just don't trust it.


This is beyond cheap. I don't have the guts (or lunacy) to go near, though.


Like Apple, RIMM is another stock that gets pillaged and plundered en masse by the big boys.


Goldman Sachs is tempting below 165. But I'll just watch for now.


When will China bounce back?


Not cheap at all.


Amazon has a tendency to stay below the sand before blooming just a few times a year.


The CEO said the company will do a repeat of last year. In other words, FWLT is entering the strength of its fiscal year.


China still spooky, but I'm watching.


Nike is cheap again.


Value is here, but can MSFT really grow?


I just have a strong belief that life insurance in China will win.


Like FSLR, STP got beaten to a pulp.


Well-run company, but subject to any economic slowdown. I'm real close to dropping Chipotle out of my Top 25.

Nauseous? Watch the road

The nausea caused by the market tide doesn't mean there aren't some prices worth eyeing. Twenty of the 25 stocks I like are worth a look on the recent downturn.


ISRG starting to look attractive. Just a bit.


MasterCard is falling, too, even though the company is making major profits. I like it here below the 100-day SMA.


First Solar isn't cheap, but it's pretty good here. At worst, it's the leader in solar.


Really, McDonald's shouldn't be this cheap, not with its overseas exposure and growth. The honey mustard snack wrap is my fave. Still addicted to their fries.


Crude oil hit $104 a barrel today, but PetroChina shares are still sluggish.


Disney is a stock worth holding for a long time.


Up and down, down and up. Is Steve Jobs and his creative crew out of fresh ideas? I tend to think not. That's more of a key than whether they sell 10 million iPhones or not.


Really, is Google this bad?


RIMM's a bit pricey here.


I'd buy on these crazy dips if I could. Goldman Sachs at 165, didn't expect it, but it was always a possibility.


Focus Media hasn't proven its potential just yet and it's a bit expensive here.


CNOOC Ltd. is doing fairly well, while its cousin PetroChina is a slug. Go figure. Could be CNOOC's natural gas segment is getting a boost from rising demand.


Crashing hard. Where it bottoms out, who knows?


On discount lately. The CEO says they'll bounce back, just like last year.


Baidu and other China leaders can't get any traction here. Just a matter of time, perhaps, until the Beijing Olympics has an effect.


Nike trading in a range. Spooky here.


Just watching Mr. Softee for now.


China Life Insurance finally leveling out. What do the technical junkies call it? An ascending triangle ... which means it may break out. Or not.


Suntech Power is appealing right here.


There are probably dozens of better stocks than Chipotle right now. But I'm still watching.