Bats and Crabapples -- September 19, 2011

UPDATE:  3:50 PM

SPX bouncing on the non-news of Greece, etc.  Should be limited to the .786 of Friday's Bat pattern at around 1210.50.


ORIGINAL POST:  2:45 PM

Friday's Bat patterns are playing out nicely, with SPX down to within .45 of its .618 Fib level before getting a good bounce at the 10-day moving average.

A Bat pattern target is normally .618 of the DA retrace, meaning just below 1170.  The pattern .382 level at 1168.14 correlates nicely with the larger (since May 2 high) .236 Fib retrace at 1166.  I'm thinking it's a reasonable level at which to rebound to the channel line one last time a la July 21.

Don't expect a straight line, though, as Fed mania and stick save Euro zone conference calls will provide plenty of upside impetus.  A good target for today's rebound:  the .382 Fib level (from the May 2 high) at 1205.1.

BTW, I normally don't pay much attention to individual stocks, but a bellwether like AAPL is hard to ignore.  Recall it recently completed a Gartley pattern at 392.08.  Here's the chart I posted on Aug 31.

Along with the Gartley on SPX, a neckline backtest on COMP and SMA 200 on NDX, it helped convince me to call 1230 the interim high.

We got a nice reversal almost immediately, retracing 26 points (.618) in the following three days.  Now, it's back with a vengeance, hitting an all-time high of 411.82 just minutes ago.

Of course, in the process, it completed another bearish Crab pattern.  Crabapples, if you will.

It's actually overshot the 1.618 ideal D point of 407.90.   So, the pattern could be busted.  Or, it could be it just got a little ahead of itself.

But, looking at the long term picture, there's a rising wedge that's clearly coming to a head.  If so, AAPL could end up spoiling the whole barrel.

More after the close.

ADDENDUM:  3:30 PM

Take a peek at the divergence on AAPL's weekly chart.  Does the RSI have the juice to break through the TL?