The broad averages resisted the downward tug of AAPL yesterday, but don’t expect them to go their separate ways for long, or by much. The world’s most valuable stock closed off $3.53 yesterday at 128.64, while the Dow Industrials settled up 15.38 points. Which will win this tug-of-war? It depends on Apple, a global bellwether whose significance cannot be overestimated. If the stock smashes the 127.92 Hidden Pivot support (see inset) on Thursday and falls another $2 to $3, I’d expect the Dow to be down at least 100 points. Alternatively, if AAPL finds traction near Wednesday’s lows, that would lend buoyancy to a stock market that looked like it was eager to move higher yesterday.
Regardless, the very long-term rally target at 143.97 shown in the chart will remain theoretically valid even if the stock were to fall to $100 or lower. I’m not expecting anything remotely that bad at the moment, since it would be tantamount to sounding taps for a bull market that is about to enter its seventh year. However, a correction over the near term to the red line, a midpoint pivot at 116.92, would not be unusual or cause for alarm. _______ UPDATE (10:12 p.m. EST): The stock should bounce from a midpoint Hidden Pivot support at 128.55 (30-minute, a=131.26 on 2/25) if bulls are going to carry the day. The support will remain viable as long as 130.87 has not been exceeded overnight.