A quick update on AAPL, which has reached two of our downside targets today…
As we discussed prior to AAPL’s earnings report [see: All Eyes on AAPL] the stock had a gap to close and 200 DMA to backtest. 
The danger in reaching both targets was that AAPL would have to descend below the triangle top above which it broke out in August [see: Focus on the FAANGs.] But, as we discussed, this wouldn’t necessarily be all that alarming.
A drop to 200 or so wouldn’t do much to dent bulls’ enthusiasm. Even a drop to the SMA200, currently at 192.17, could be passed off as a base-building exercise.
It’s been almost two weeks since AAPL posted earnings, and it just reached its SMA200, (one day after closing the gap) posting a low today of 191.45 — an 18% drop from its Oct 3 highs. Needless to say, some bulls are getting nervous.
A quick glance at the weekly chart shows why. If the rising red channel from 2016 doesn’t hold, it’s quite a ways to the first serious support down at the purple channel midline. Maybe it’s time to expand the company’s stock repurchase plan.
Don’t own any AAPL? Wondering why you should care? Drops through AAPL’s 200-DMA have been a trap door to some big swoons for the overall market.
With our yield curve model and oil/gas charts screaming “short!” I’d give better than even odds that AAPL’s channel and the overall market are headed lower. If AAPL closes below its SMA200, I’d say it almost certain.
Stay tuned.
UPDATE: Nov 14, 2018 – 3:45 PM
AAPL closed below its SMA200 and its red channel is failing. As we noted a couple of weeks ago, the nearest significant support is now the .618 Fib at 144.48.
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