BIG DROP IN APPLE HURTS TECH SECTOR AND THE NASDAQ WHICH ARE LEADING TODAY'S STOCK RETREAT -- BOTH MAY BE FAILING TESTS OF THEIR 200-DAY AVERAGES -- THE S&P 500 IS ALSO STALLING AT MOVING AVERAGE LINES -- HOURLY BARS SHOW OVERHEAD RESISTANCE BARRIERS

APPLE FALLS ON GOOD NEWS ... It's usually not a good sign when the market's biggest stock takes a big hit. That's especially true when it happens the day after the company reported its fourth consecutive quarter of record revenue and profits. But that's today's biggest story. Chart 1 shows Apple (AAPL) plunging -7% and falling to the lowest level in nearly three months (after failing a test of its 50-day average). Over the past month, we've seen a succession of big tech stocks fall on strong earnings, which is never a good sign. Apple is the last and the biggest of the so-called FAANG stocks to fall. That's weighing especially hard on the technology sector and the Nasdaq market. And it's happening just as they're meeting resistance at their 200-day moving averages.

(click to view a live version of this chart)
Chart 1

TECH SECTOR AND QQQ BACK OFF FROM 200-DAY LINES ... Tech stocks are leading today's stock retreat. And that's coming at a bad time. Chart 2 shows the Technology SPDR (XLK) meeting resistance at its 200-day moving average (red line). The XLK fell below that long-term support line during October. It now appears to be meeting resistance at that same line. The same is true for the Nasdaq market which is the weakest part of the market today. Chart 3 shows the Invesco Nasdaq 100 (QQQ) also failing a retest of its 200-day line. That's not a good sign for the rest of market and is putting the market's rally attempt in jeopardy.

(click to view a live version of this chart)
Chart 2

(click to view a live version of this chart)
Chart 3

S&P 500 ALSO BACKS OFF FROM MOVING AVERAGE LINES ... The entire stock market is being sold today. And that's coming at a bad time as well from a chart standpoint. The daily bars in Chart 4 shows the S&P 500 backing off from a test of its 20-day average (green circle) and, more importantly, its 200-day line (red arrow). The S&P 500 needs to clear those resistance barriers to continue its November rebound. There are other overhead barriers the SPX needs to clear.

Chart 4

HOURLY BARS SHOW OVERHEAD RESISTANCE LEVELS ... The "hourly" bars in Chart 5 show more resistance barriers existing above the S&P 500 more clearly. The flat red line shows the SPX backing off from initial resistance at 2753 formed a couple of weeks ago. It may now retest its underlying "price gap" formed earlier this week (green box). The more important barriers are the blue horizontal lines which mark Fibonacci retracement levels measured from the October top to its bottom. The SPX is now struggling with the 38% retracement level which is the lowest blue line. Stronger overhead resistance is normally seen at the 50% and 62% retracement levels. The SPX needs to clear the upper blue line (and the October 17 intra-day peak at 2816) to reverse more of October's chart damage. At the moment, the market's rally attempt is in danger of stalling.

Chart 5