The stock market and APPL rallied sharply and with the mid-February high of $526.29, it had exceeded both the R1 and R2 quarterly resistance levels. The 2nd quarter open at $601.83 was above the quarterly pivot at $546.55.
However, by the middle of May, this level was broken (point 2) as APPL had a low of $522.18. The following week, AAPL closed back above the quarterly pivot level, suggesting that the intermediate-term uptrend was still intact.
On July 2, 2012 APPL opened the new quarter at $584.73 (point 3), which was just barely above the quarterly pivot at $583.39. This pivot was violated for three days late in the month in reaction to their earnings report.
APPL opened the following week back above the quarterly pivot, and in three weeks, exceeded the R1 resistance at $644.60. Just five weeks later AAPL had a high of $705.07, which was extremely close to the R2 at $705.21. At the end of August, I had come up with a target in the $709 to $722 area, using starc band and Fibonacci analysis.
By the start of the 3rd quarter, AAPL was already declining as it opened at $671.16 and shortly thereafter dropped below the quarterly pivot at $647.00. Right before the election, the S1 quarterly support at $590.07 was also broken as APPL made a low in mid-November at $505.75. This was just slightly below the S1 support at $513.04.
Using the close at $532.15, the quarterly pivot for the 1st quarter of 2013 is at $580.99. This number will change before the quarter is over, but for now is a level to watch.
With so many years of using pivot points, John Person has developed his own unique brand of pivot point analysis. By using his own proprietary methods to analyze the state of the market he comes up with his predicted levels of pivot support and resistance.
If the state of the market is analyzed to be strong, then the predicted resistance may be the R2 instead of the R1.The chart of the Spyder Trust (SPY) covers the period from early 2006 through early 2008.
The SPY spent most of the 2nd quarter of 2006 below the quarterly pivot (blue) and began the 3rd quarter also below the pivot line. For that quarter, the software predicted that the S1 at $122.12 was the most likely area of support (green line).
The low in the middle of July was $122.39, and by early August, the quarterly pivot line at $127.44 had been overcome. The predicted resistance for the quarter (in red) was the R2 at $137.87. The price action was strong in the 2nd quarter as SPY closed near its highs.
The 4th quarter opening was well above the pivot at $129.33 and the predicted resistance level was at $141.33, which was the R2 level while the R1 was at $137.45. The predicted resistance was overcome at the end of the 4th quarter as the high was $143.24.
The SPY continued to make higher highs throughout the first two quarters and peaked at $156 in July, which was just below the R1 at $156.25. Those of you who remember this period will recall that the selling was quite heavy as the quarterly pivot was violated before the end of the month.
NEXT PAGE: Quarterly Pivot Levels, Powerful Tool