Hello all. Today I unexpectedly found a great discovery on AAPL, Apple. Yes, I will talk about the holy stock market crash today.
These days everyone wondering: Is that really true that stock market is going to crash? I am also one of them, so on the other day, I did a quick analysis on the VIT stock. But the analysis was wrong, I NEEDED to do analysis on a REAL stock, but not a ETF or likes.
But why Apple? It's obvious. The Apple stock is, literally, the number one stock on the market. Nasdaq, DOW, S&P 500, the stock is on the "very top" on the variety of indexes. Knowing Apple's future price, you could safely say that it's equivalent to knowing the future of the entire stock market, financial market.
So, the key indicator on this analysis is: A fibonacci retracement While fibonacci retracement is an amazing tool, you need to take a closer look at how precisely the fibonacci retracement is working on the chart. How nicely the prices are fitting to the fib retracement lines decides the level of trustworthiness for the fib retracement, like the above.
(Pro tip: Use the magnet tool; Toggle the logarithmic mode to see a clear view where is the true peak and the true valley; Find a best fibonacci retracement, take a closer look at horizontal supports)
Other than the fibonacci retracement, there are two (three) reasons why I believe that the stock market is going to crash.
1. Three peaks
A three peaks, this is my original term. As you can see on the chart, you can see a three tops, where the each is all on the nearly same level, but not far from each other. This is a big signal that you can vaguely tell if the market is not performing well. You can find the pattern on the recent Bitcoin 65K crash in the early 2021.
2. RSI bearish divergence
RSI divergence is a huge help to precisely tell if the asset is going to crash on the timeframe. Apple is marking a big bearish divergence on its monthly timeframe and its weekly timeframe. It's very important here to ensure that the 1M timeframe is as well bearish but not the 1W timeframe.
3. EMA ribbon crossunder
This is also my original term. An EMA ribbon crossunder is when an EMA ribbon crossunders the SMA 50. In other words, When the SMA 50 crossovers the EMA ribbon. An EMA ribbon is an array of EMAs, exponential moving average. Usually EMA 25, 30, 35.. 50, and 55, or likes. The crossunder of an EMA ribbon under a higher moving average such as SMA50, means that a shorter or more reactive moving crossunders a longer or less reactive moving average. Fundamentally, EMA ribbon crossunder is the same concept to a death cross, where SMA 50 crossunders SMA 200 or SMA 100. But an EMA ribbon crossunder is more visual friendly. An EMA ribbon crossunder also happened on the Bitcoin crash, and often on other assets.
So, that's it. Hope this helps for your exit strategy.
Oh, and also note that it's also highly possible that you will see a bull trap, a.k.a dead cat bounce. You also could say the complacency phase in the market cycle.
I'm very scared of the market crash, not because I could lose big, but it could lead some more serious side effects to the real world. You know what I mean. Perhaps you'd better prepare some gold and foods in your house XD
Stay safe.
// This is NOT a Financial Advice. This is For Educational Purposes Only. //