Apple (AAPL) obviously has had a massive impact on the NASDAQ and shall continue to do so as it is a huge weighting (along with a near 20% weighting in the very popular QQQ ETF). The NASDAQ had been the leading index for 2012 as Apple had a run of some 70% at peak. A remarkable performance for the largest stock in the U.S. market. Of course when Apple is weak the same issue happens but in reverse – we saw that in late spring and early summer when Apple went through a rough patch. But since June it has led the market up. And then it peaked just as QE3 was announced – just as the market did. But Apple has suffered a much larger decline (12.5% and counting)… as has the NASDAQ relative to the DJIA and SP500.
At this point when we utilize our Fibonacci retracements one can see Apple is sniffing at the 50% retrace. With earnings coming next week a move to the 61.8% or 38.2% retrace would seem likely. However which one it is – that's the question. That said it is rare to see Apple go into an earnings report acting so horrid; usually it is the opposite – run into earnings and sell off after. We'll see how this one shakes out next week. Note that this 50% retrace also coincides with highs of July – which normally would act as a solid level of support (old resistance = new support)
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