Stock trader jockies had to love today’s market action. Man it was exciting! Investors of AAPL on the other hand, on the verge of a defining moment in their beloved company’s history, had to have their stomach in their throat! The last thing they want is to swallow a bitter pill when they should be enjoyi the sweet taste of success.

From the stock jockey’s point of view it was a classic struggle between the Bears closing in for the kill, and the tattered Bulls cornered in a defensive posture. This battle field is on the S&P, a range between massive support at 1240,  and stubborn resistance at 1275. If the support was lost the markets would free-fall, next stop would be a distant 1170. And man it was close. The Bulls nearly lost it on two separate occasions, once in the morning and again with one hour to go in the session.

The Bears have the advantage in this battle, we are after all in a Bear market, the trend is decidedly down. And add to that a near collapse in the financial markets, and Oil making a resurgence on trouble with Iran. Just about the only thing the Bulls have going for them is sentiment. We have rising pessimism, with the $VIX approaching 30, and oversold conditions on the RSI of historic proportions. And yet the Bulls can’t put together a Bear rally with any stick to it.

AAPL traders did not have it so dramatic a day as the S&P, at least not until an hour left in the session. The battle field for the most part was bounded by resistance at 177 and support at 174. That is until it became Big Guy sell time. You know, when the smart money usually enters the game, around 2 pm to 2:30 pm. That’s when the they decided to pull the bottom out, nearly a 5% drop!

Some say the catalyst for the selloff was a comment from Cisco’s CEO John Chambers in a Rueters interview, where he said that an economic  recovery may not happen until next year rather than later this year. That was countered about a half hour later by Intel’s CEO Otellini who said the economy looks strong. The comment was timed to perfection, just as the markets and AAPL were to breach critical support. From there, prices soared for the rest of the session, eclipsing the 5% drop and continued into the after hours market. What drama!

The most important thing is that the market internals made a dramatic turnaround. This rise in the market wasn’t limited to just a couple of tech giants, no sir, it was broad-based, with the advance-decline clearly moving in favor of the Bulls. And in the end, AAPL plotted a beautiful bullish hammer. What a nice gift for 3G iPhone Eve.

Click on the image to enlarge. This is a 30 minute chart of AAPL over the past 12 days. It’s interesting because it shows AAPL in an uptrend, and just coming off the bottom of the channel base. The next target looks to be 185.

This should setup beautifully for AAPL investors after taking a beating the day before. This momentum, combined with the intense media coverage of the iPhone release into world-wide markets, should provide a nice boost to Apple’s stock price. Just to be safe, investors should bring along plenty of Bear repellent.

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