Uh-oh! Again. The stock’s $16 plunge today, exacerbated by a gap through a key Hidden Pivot support at 146.37, has all but clinched more downside to 133.38 (see inset). At that price Apple, until recently the most valuable company in the world, will have shed 43% of its value. This is the wealth effect in precipitous reversal, an implosion that foreshadows much larger losses that eventually will be felt as the bear market pulls the broad averages well below ‘fair value’. I’ll warn you in advance not to get sucked in if the stock rallies sharply without having reached 133.38. Indeed, if the bounce were to hit the green line at 152.87. that would generate a ‘mechanical’ shorting signal.
