A Sharp, Two-Edged Technical Sword for The Market and for AAPL Ahead of Apple Earnings Tuesday Evening

My big picture pattern work suggests strongly that Apple Inc. (AAPL) established an important near-term low at 93.42 on Jan 20, within a larger, still-developing sideways, but contracting digestion period of the April 2013 to April 2015 advance from 55 to 136.

Heading into earnings this Tuesday evening, AAPL exhibits a technical set-up that is poised for a positive reaction to the news that should propel the stock to challenge heavy resistance at 106-110.

A sustained climb above 110 will indicate that AAPL has neutralized the negativity created by its most recent downleg from 123.82 to 93.42.

Conversely, a negative reaction to earnings that breaks the Aug-Jan lows (93.42 - 92.00) will have the potential to lock in a near, 18-month top that will project considerably lower prices in the upcoming months.

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