Here's why 127 was a big level on multiple elements
1. HIGH VOLUME SUPPORT - See VPVR on right hand scale of the chart. More AAPL shares have traded at 127 than any other in the past 3 months. 2. Range Expansion on the rally back in May signifies where important buyers lay in wait for more stock. 3. The Profile (By profile, I am referring to the "normal distribution" shape of the purple and white histogram of price action) of the recent decline balances out at 127+ The sellers who have capped the advance might be tapped out down here against longer term, larger buyers.
What else stopped the decline? Today is Tim Cook's Apple Developer conference - and the announcement of Apple Music
What else added to the decline? Barrons' said Apple Watch isn't worth it (see this weekend's Barron's Magazine)
What to do next: From here we want to see if AAPL can climb back to 129.50-130 where I plan to short with a close stop, perhaps as close as 132. If the market stalls and rejects 129.50-130, and you see a range expansion down day, I will add to the short. If we close under a previous day's low, I can also add to the short position.
If AAPL breaks under 126.50 on heavy volume, then the next target is the lows of the year (lowest "range" of the year).