diff --git a/Core/Labels/LabelLayer.swift b/Core/Labels/LabelLayer.swift
index b1cfc78..0a90e8d 100644
--- a/Core/Labels/LabelLayer.swift
+++ b/Core/Labels/LabelLayer.swift
@@ -1,12 +1,23 @@
 import Cocoa
 import QuartzCore
 
+/// Direction of the caret (arrow) on the speech bubble
+enum CaretDirection {
+    case up // Caret points up (label below element)
+    case down // Caret points down (label above element)
+}
+
 /// A CALayer that draws a label for a UI element with speech bubble style
 final class LabelLayer: CALayer {
     var label: String = "" {
         didSet { updateLayout() }
     }
 
+    /// Direction of the caret - set by positionRelativeTo
+    private(set) var caretDirection: CaretDirection = .up {
+        didSet { if oldValue != caretDirection { updateLayout() } }
+    }
+
     var labelFont: NSFont = .monospacedSystemFont(ofSize: 10, weight: .bold) {
         didSet { updateLayout() }
     }
@@ -53,10 +64,16 @@ final class LabelLayer: CALayer {
     }
 
     private func setupLayer() {
+        let scale = NSScreen.main?.backingScaleFactor ?? 2.0
+
+        // Set scale on self for Retina display
+        contentsScale = scale
+
         // Shape layer for speech bubble
         shapeLayer.fillColor = labelBackgroundColor.cgColor
         shapeLayer.strokeColor = labelBorderColor.cgColor
         shapeLayer.lineWidth = 1
+        shapeLayer.contentsScale = scale
         addSublayer(shapeLayer)
 
         // Shadow on shape
@@ -66,7 +83,7 @@ final class LabelLayer: CALayer {
         shapeLayer.shadowOpacity = 0.4
 
         // Text layer
-        textLayer.contentsScale = NSScreen.main?.backingScaleFactor ?? 2.0
+        textLayer.contentsScale = scale
         textLayer.alignmentMode = .center
         textLayer.truncationMode = .none
         addSublayer(textLayer)
@@ -88,67 +105,127 @@ final class LabelLayer: CALayer {
 
         bounds = CGRect(x: 0, y: 0, width: bubbleWidth, height: totalHeight)
 
-        // Create speech bubble path with caret pointing up
-        let path = createBubblePath(width: bubbleWidth, height: totalHeight, bubbleHeight: bubbleHeight)
+        // Create speech bubble path with caret in the appropriate direction
+        let path = createBubblePath(
+            width: bubbleWidth,
+            height: totalHeight,
+            bubbleHeight: bubbleHeight,
+            direction: caretDirection
+        )
         shapeLayer.path = path
         shapeLayer.frame = bounds
 
-        // Position text in the bubble (below the caret)
+        // Position text in the bubble
+        // When caret points up: text is at bottom (y = yPadding)
+        // When caret points down: text is above the caret (y = yPadding + caretHeight)
+        let textY = caretDirection == .up ? yPadding : yPadding + caretHeight
         textLayer.frame = CGRect(
             x: xPadding,
-            y: yPadding,
+            y: textY,
             width: textSize.width,
             height: textSize.height
         )
     }
 
-    private func createBubblePath(width: CGFloat, height: CGFloat, bubbleHeight: CGFloat) -> CGPath {
+    private func createBubblePath(
+        width: CGFloat,
+        height: CGFloat,
+        bubbleHeight: CGFloat,
+        direction: CaretDirection
+    ) -> CGPath {
         let path = CGMutablePath()
         let cornerRadius: CGFloat = 3
         let caretX = width / 2
 
-        // Start from bottom-left, go clockwise
-        // Bottom-left corner
-        path.move(to: CGPoint(x: 0, y: cornerRadius))
-
-        // Left edge up to top-left corner
-        path.addLine(to: CGPoint(x: 0, y: bubbleHeight - cornerRadius))
-        path.addArc(
-            tangent1End: CGPoint(x: 0, y: bubbleHeight),
-            tangent2End: CGPoint(x: cornerRadius, y: bubbleHeight),
-            radius: cornerRadius
-        )
-
-        // Top edge to caret left
-        path.addLine(to: CGPoint(x: caretX - caretWidth / 2, y: bubbleHeight))
-
-        // Caret pointing up
-        path.addLine(to: CGPoint(x: caretX, y: height))
-        path.addLine(to: CGPoint(x: caretX + caretWidth / 2, y: bubbleHeight))
-
-        // Top edge to top-right corner
-        path.addLine(to: CGPoint(x: width - cornerRadius, y: bubbleHeight))
-        path.addArc(
-            tangent1End: CGPoint(x: width, y: bubbleHeight),
-            tangent2End: CGPoint(x: width, y: bubbleHeight - cornerRadius),
-            radius: cornerRadius
-        )
-
-        // Right edge down to bottom-right corner
-        path.addLine(to: CGPoint(x: width, y: cornerRadius))
-        path.addArc(
-            tangent1End: CGPoint(x: width, y: 0),
-            tangent2End: CGPoint(x: width - cornerRadius, y: 0),
-            radius: cornerRadius
-        )
-
-        // Bottom edge to bottom-left corner
-        path.addLine(to: CGPoint(x: cornerRadius, y: 0))
-        path.addArc(
-            tangent1End: CGPoint(x: 0, y: 0),
-            tangent2End: CGPoint(x: 0, y: cornerRadius),
-            radius: cornerRadius
-        )
+        switch direction {
+        case .up:
+            // Caret at top, pointing up (label below element)
+            // Bubble body is at bottom (y: 0 to bubbleHeight)
+            // Caret tip is at top (y: height)
+
+            path.move(to: CGPoint(x: 0, y: cornerRadius))
+
+            // Left edge up
+            path.addLine(to: CGPoint(x: 0, y: bubbleHeight - cornerRadius))
+            path.addArc(
+                tangent1End: CGPoint(x: 0, y: bubbleHeight),
+                tangent2End: CGPoint(x: cornerRadius, y: bubbleHeight),
+                radius: cornerRadius
+            )
+
+            // Top edge to caret
+            path.addLine(to: CGPoint(x: caretX - caretWidth / 2, y: bubbleHeight))
+            path.addLine(to: CGPoint(x: caretX, y: height)) // Caret tip
+            path.addLine(to: CGPoint(x: caretX + caretWidth / 2, y: bubbleHeight))
+
+            // Top edge to top-right corner
+            path.addLine(to: CGPoint(x: width - cornerRadius, y: bubbleHeight))
+            path.addArc(
+                tangent1End: CGPoint(x: width, y: bubbleHeight),
+                tangent2End: CGPoint(x: width, y: bubbleHeight - cornerRadius),
+                radius: cornerRadius
+            )
+
+            // Right edge down
+            path.addLine(to: CGPoint(x: width, y: cornerRadius))
+            path.addArc(
+                tangent1End: CGPoint(x: width, y: 0),
+                tangent2End: CGPoint(x: width - cornerRadius, y: 0),
+                radius: cornerRadius
+            )
+
+            // Bottom edge
+            path.addLine(to: CGPoint(x: cornerRadius, y: 0))
+            path.addArc(
+                tangent1End: CGPoint(x: 0, y: 0),
+                tangent2End: CGPoint(x: 0, y: cornerRadius),
+                radius: cornerRadius
+            )
+
+        case .down:
+            // Caret at bottom, pointing down (label above element)
+            // Caret tip is at bottom (y: 0)
+            // Bubble body is at top (y: caretHeight to height)
+
+            path.move(to: CGPoint(x: 0, y: caretHeight + cornerRadius))
+
+            // Left edge up
+            path.addLine(to: CGPoint(x: 0, y: height - cornerRadius))
+            path.addArc(
+                tangent1End: CGPoint(x: 0, y: height),
+                tangent2End: CGPoint(x: cornerRadius, y: height),
+                radius: cornerRadius
+            )
+
+            // Top edge
+            path.addLine(to: CGPoint(x: width - cornerRadius, y: height))
+            path.addArc(
+                tangent1End: CGPoint(x: width, y: height),
+                tangent2End: CGPoint(x: width, y: height - cornerRadius),
+                radius: cornerRadius
+            )
+
+            // Right edge down
+            path.addLine(to: CGPoint(x: width, y: caretHeight + cornerRadius))
+            path.addArc(
+                tangent1End: CGPoint(x: width, y: caretHeight),
+                tangent2End: CGPoint(x: width - cornerRadius, y: caretHeight),
+                radius: cornerRadius
+            )
+
+            // Bottom edge to caret
+            path.addLine(to: CGPoint(x: caretX + caretWidth / 2, y: caretHeight))
+            path.addLine(to: CGPoint(x: caretX, y: 0)) // Caret tip pointing down
+            path.addLine(to: CGPoint(x: caretX - caretWidth / 2, y: caretHeight))
+
+            // Bottom edge to bottom-left corner
+            path.addLine(to: CGPoint(x: cornerRadius, y: caretHeight))
+            path.addArc(
+                tangent1End: CGPoint(x: 0, y: caretHeight),
+                tangent2End: CGPoint(x: 0, y: caretHeight + cornerRadius),
+                radius: cornerRadius
+            )
+        }
 
         path.closeSubpath()
         return path
@@ -166,22 +243,43 @@ final class LabelLayer: CALayer {
         )
     }
 
-    /// Position the label below a UI element frame with caret pointing up
+    /// Position the label relative to a UI element frame
+    /// For elements near the bottom of screen: label above with caret pointing down
+    /// For other elements: label below with caret pointing up
     func positionRelativeTo(frame: CGRect, screenHeight: CGFloat) {
         // Convert from accessibility coordinates (top-left origin, Y down)
         // to layer coordinates (bottom-left origin, Y up)
 
-        // Element bottom edge in layer coordinates
+        let elementTop = screenHeight - frame.origin.y
         let elementBottom = screenHeight - (frame.origin.y + frame.height)
 
         // Label center X = element center X
         let x = frame.origin.x + (frame.width / 2)
 
-        // Label top (caret tip) should touch element bottom
-        // position.y is at center of bounds, caret tip is at bounds.height from bottom
-        // So: position.y + bounds.height/2 = elementBottom
-        // Therefore: position.y = elementBottom - bounds.height/2
-        let y = elementBottom - bounds.height / 2
+        // Determine if element is in bottom portion of screen
+        // Use accessibility coordinates (Y down from top)
+        let bottomThreshold = screenHeight * 0.75
+        let isNearBottom = frame.origin.y > bottomThreshold
+
+        var y: CGFloat
+        if isNearBottom {
+            // Position label above element, caret points down
+            caretDirection = .down
+            // Caret tip (at y=0 of bounds) should touch element top
+            // position.y - bounds.height/2 = elementTop
+            y = elementTop + bounds.height / 2
+        } else {
+            // Position label below element, caret points up
+            caretDirection = .up
+            // Caret tip (at y=bounds.height of bounds) should touch element bottom
+            // position.y + bounds.height/2 = elementBottom
+            y = elementBottom - bounds.height / 2
+        }
+
+        // Ensure label stays within screen bounds
+        let minY = bounds.height / 2 + 10
+        let maxY = screenHeight - bounds.height / 2 - 10
+        y = max(minY, min(y, maxY))
 
         position = CGPoint(x: x, y: y)
     }