AAPL from a technical analysis point of view is ready to break out. It closed Friday bouncing off support defined by a symmetrical triangle pattern, and it’s near the apex of this pattern. Triangles are patterns that mark the continuation of a trend, in some cases triangles can also mark trend reversals as well. With AAPL, the trend has obviously been up, but there are negative divergences looming below. Because of these divergences, I would be more inclined to say this triangle will result in a trend reversal. The thing is, with the nature of this WWDC, all bets are off. It will depend entirely on how the markets perceive product introductions, like the 3G iPhone, the overall message of the WWDC, and how it will impact Apple’s future.

But for arguments sake, let’s say that WWDC is a huge success marking seminal moment, denoting a new era in personal computing, and the stock rockets skyward. By the way, I fully expect this is what will happen, especially after announcements have been analyzed and the impact to investors is fully realized. If this is the scenario, AAPL will likely pierce the gap down resistance at 192-193, bridge the gap and head for the all time high of 202.96. This level should provide strong resistance, and will likely provide an opportunity to take new positions on any pullbacks off this resistance.

On the other hand, let’s assume for a brief moment that WWDC does not go so well. The scenario I can envision is that the features of the iPhone don’t meet expectations, or the introduction of the iPhone is delayed for a future event, perhaps the following week, so that the conference can stay on message. In this case, I see a drastic drop in price, the drop will likely be hard, due to dashed expectations, combined with poor economic conditions. The biggest support areas under APPL right now are the 178-179 range, after that the next stop is 172. I look at this scenario as an excellent opportunity to take new positions, because once the 3G iPhone is brought to market, and the Apple message is fully realized, the stock will climb and climb fast. 

Now for the big story last week. Oil has gone parabolic, spiking up $11 to $138 with it’s highest volume in history. Is this an Oil Bubble? This was the single biggest single day rise in price since it’s been tracked back in 1983. Why? Speculation. Investors were hit with the perfect storm of bad economic and world news.

• Morgan Stanley predicts oil will hit $150 by July 4th
• Jobs report was horrible, unemployment rises to 5.5% 
• Israeli cabinet minister says attack on Iran inevitable

Now let’s look at how the S&P and the Nasdaq performed? Not so well I’m afraid. The S&P 500 closed Friday below huge trend and price support at 1365, and the Naz closed below its strong price support of 2516. The difference is that the S&P breached its ascending triangle, with an engulfing candle. This is a very bearish reversal pattern, so it doesn’t look good for the S&P.

The Naz, on the other hand has maintained its ascending triangle. So, even though both the S&P and Naz broke solid support, the Naz is in better shape. This is indicative of strength in the Tech Sector. The S&P has more downside to it in my opinion. If there’s a bounce tomorrow morning (Monday June 9), then short any strength. I don’t see any good risk:reward for S&P longs at this time.

So, what does all this mean for AAPL? It puts weight on it for sure, but we’ll need to wait for the WWDC keynote to be over, and the market to reveal its final answer, deal or no deal.