What Could go Wrong? …And Is Apple Still Leading The Market

Nobody is complaining these days other than tech bloggers and ZeroHedge (he complains all day everyday).

Actually, people long $AAPL are complaining too. I hear them talking about how cheap Apple is. I would be more bullish on Apple if it were going up and more expensive.

I am perpetually nervous, but I eat it on this blog to focus on the positive.

My positions entering the year remain mostly the same today. I have sold $Z and $AMZN and lightened up (as covered on the stream) on most of the other positions. I have added $TSLA recently.

I wonder what most would do today on an 8 straight day tumble of 7-10 percent on the S&?. I wonder what Apple would do if that correction happened? I can’t yet see great upside in the markets without a healthy Apple.

I see Johnson and Johnson at all-time highs, but I wont chase slow growth and size.

I get a sense that the funds are chasing and though the money flow is good and should remain so with rates so low, it won’t be without major hiccups.

Last summer, Europe was imploding. CNBC told me so. It did not. In fact, most European country ETF’s have rallied 50 plus percent since than. Last Friday though, two yutz’s with too much time and cash, used CNBC to fight about fake food and herb pills. Europe…yawn!

I see the CNN Fear and Greed Index at 93 and wish it was at 13.

I can imagine the remaining stock brokers in this world calling their clients to get out of bonds and into the safety of stocks (like a beaten down Apple and the safety of a Johnson and Johnson) because the of the all-time highs in the Dow, the Transports and the fact that the government can’t possibly let rates rise anytime in the next 5 years. The pitch…’Well Mr. Smith…if rates go up, all that bond money will flow into stocks which are cheap on a relative basis in an easy monetary environment…yada yada yada!’

Maybe it is Apple that is a leading indicator of what will happen to the rest of technology and consumer sector in the very near future. The bulls are so proud of this market that withstood the 35 plus percent crash in Apple. Maybe too proud.

Those are my nervous thoughts of the day.


  1. Andrewunknown says:

    The other shoe may have yet to drop here; and not in the way many people would expect. The $SPX/$AAPL beta hedge unwind undoubtedly plays some role for how far the negative correlation has been pushed (though what weighting this loud narrative is playing is difficult to say). Much of that loose capital is likely being pushed into high-beta to play catch-up (perhaps at just the wrong time).

    But there’s more than one reason to believe that shift may be late to the party; and if it is, those making that shift may find themselves over-extended almost as soon as their trades have settled. Doesn’t mean it’s the inception of a bear market, but it could push a modest, healthy pullback into something deeper than it would’ve been otherwise.

    Wouldn’t it be fascinating if Apple began a furious throwback higher creating downward pressure on S&P components in a beta-chasing riposte?

    A mountain of errant assumptions there, I’m sure; but just spitballing.

  2. Vconomics says:

    Apple has rallied over 800% since the markets bottomed, a 35% correction is nothing if you look at it on a weekly/monthly basis. And I agree with your bonds thesis, rates won’t go far, the Fed will not allow it. Regardless where the market goes, people will continue to pile into bonds. What intelligent person puts their money into stocks when we are at 5 year highs? It’s ridiculous what people have been recommending lately.

  3. Vconomics says:

    I never understood why people suggest they should buy Twitter … how do they make their investment back by buying that? I think small tech companies is where the growth continues to be. And I still believe Apple should get into a different area of business. Maybe challenge Netflix (which wouldn’t be hard). Or challenge Amazon. Create a Paypal type system. Do something with that cash! Anything!

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