When Apple (AAPL) rolled over on Monday the chart looked horrible. As of December 5th the threat became a reality.
Have we had the Apple dead cat bounce? I would, of course, say so.
For both the bulls and bears here is the scenario that Apple finds itself in.
Firstly, the bad news.
Bears see this:
For a start this puts Apple back on its long term trend, so if you are technically minded it is hard not to see that as reasonable.
Of course, it’s a shocker because that would mean Apple will shed $300 billion in value, more than what all but a handful of companies are worth.
We could play fun with numbers and list how many and which companies in the S&P 500 this equates to but here is a list of the 25 biggest U.S. listed from ADVFN’s U.S. Screener and you can have fun with it yourself.
So far Apple has almost lost a whole Google in value and in the last few weeks has lost a lot more than Warren Buffett has taken his whole lifetime to build up.
A bear would say “that’s how bubbles work.”
So what would a bull see, or rather pray for?
This is the shape of salvation:
My last piece suggested we would get a “dead cat bounce” and being a bear I now expect to see a drop, but that won’t make it so. It looks like we are up for a Santa Rally, but an Apple investor panic could take some reversing even if St. Nick does come down the flu.
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