AAPL may be the only stock we need to follow closely to know whether the bull market is making a big top.
Because AAPL is the most valuable company in the world, its shares are at the top of institutional must-own lists.
This is especially true going into what is fiscal year end for many of the largest funds…October 31.
As long as those who make their living throwing OPM (Other People’s Money) at a Dirty Dozen names continue to throw the lion’s share of it at AAPL, the bull market is bound to continue.
It is not so much a case of AAPL dragging the popular averages higher as it is a matter of dragging the institutional lemmings to the cliffs of passive investing.
AAPL led the market down last fall, topping on October 3rd. The next day the SPX broke decisively and never looked back.
What can be gleaned from a daily AAPL for this year?
On October 11, with AAPL at 237, we said that clearing 237 projected to 253.
This is because from its 142 January 3 low, two full cycles of 360 degrees up in price is 253.
Green arrow is 142
Red arrow is 253
Let’s take a look at the geometry.
On July 31, AAPL reported earnings. It spiked to 221 and quickly reversed.
We told subscribers to short it and buy puts near the highs.
This is because 221 is opposite the 142 low.
AAPL closed at 211 on July 31, but it wasn’t done going down.
It bottomed at 192.58 3 days later.
This satisfied a precise 180 degree decline from the 221 high.
Red arrow is 221
Green arrow is 192/193
Remarkably, 192/193 is 360 degrees up from the major 142 low.
252/253 is precisely 360 degrees up from the 192 August 5 low.
How’s that Random Walk Theory working for ya?
AAPL only ran up 5 points in the 7 days prior to its last quarterly report.
In the last 7 days, AAPL has ripped 16 points.
Consequently, the presumption is that a spike on Wednesday’s report to the 253 region will leave AAPL more vulnerable to a reversal than it was in July.
Just as AAPL led the way down last fall, it called the bottom of the SPX in December.
Why?
AAPL’s October 3, 2018 high was 232-233.
As my Square of 9 Wheel below shows, 232/233 is square December 24. This was the low close for the SPX.
It went a tad lower on the next trading day, December 26, but essentially, the price of AAPL’s top (232/233) pinpointed the day of the market’s low.
Red arrow is 232/233
Green arrow is Dec 24
AAPL set an initial bottom on December 24, rallying 13 points in 4 days.
Then it put the hook in as is the nature of the talented Mr. Market.
AAPL gapped down to a nominal new low on January 3, setting a W Bottom.
When AAPL offset the open gap, it was a signal of a Selling Climax.
Notable is that AAPL’s January 3 low was precisely 90 days/degrees from its October 3, 2018 high.
Time turns trend. When time was up on January 3, AAPL turned up in earnest.
To recap, AAPL saw a time/price square-out in late December with the price of its October 3 high squaring December 24.
It had to wait for ‘time’ to come around on January 3… which ‘squared’ (90 days/degrees) the time of the high.
AAPL broke out above a Rising Wedge at 237 on October 11. This is a potentially bearish pattern but AAPL entered a runaway move… failed patterns become fast moves… with a strong likelihood of satisfying a push to 253.
Breakage back below 237 leaves AAPL vulnerable to a test of the 225 region.
If AAPL spikes to 253 it underpins our projection for the SPX to 3090 ….if 3035 decisively.
Yesterday, the SPX closed at 3039 following a breakout above a 3-month trendline on Friday.
Follow through ties to the top of a parallel channel that ties to our 3085-3090 potential square-out area.
This is because 3090 points to July 26 (the prior high) on the Square of 9 with this week squaring 3085.
Red arrow is July 26 top
Green arrow is 90 (for 3090 in the outer rung)
As long as Monday’s breakout holds support at 3025ish, the top of the trend channel would be my next upside target for a 5th micro 5th wave.
However, if we break and sustain below 3025 and then follow through below last Friday’s low at 3000, it is a first indication of a top.
Breakage back below the illusive 3000 level suggests the September high was an a-wave with the drop to October 3 a b-wave, with the current rally carving out a c-wave.
The implication would be a test of the lower rail of the trendchannel around 2875.
Conclusion. AAPL’s action following its report on Wednesday may hold the key as to whether the market holds 3000 and marches up toward 3090.
If AAPL falters below 237 it turn the key for a precarious SPX drop below 2900.
