Apple is falling hard today.  The stock is off over 7% on very heavy trade following last night’s earnings report.  This is a sharp reversal from the pre-earnings action.  Yesterday $AAPL marked its third straight gain on its heaviest upside trade since early August.  With the stock now dipping below the October lows the pre earnings buyers are deeply underwater.  This will certainly add considerable downside pressure in the near term.  $AAPL bulls should remain on the sidelines until this breakdown fully plays out.

We are expecting a much deeper drop for Apple.  A retest of major support near the $194.00 area looks very likely.  This key zone includes the June/July highs near the upper band($196.00-$194)and the upward sloping 200 day moving average($192.50)near the lower band.  Most importantly, the powerful post earnings breakout gap($192.15), left behind on August 1st, is also near the lower band of support.  Following this explosive surge $AAPL entered a fresh rally leg that lifted it 22% higher over the next eight weeks.  And a final data point, $191.00 is the midpoint(50% retracement)of the entire 2018 range.

We do not have a position in $AAPL but will be buyers of further weakness.