Apple Investors the Bear has Commodities in its Teeth
The conventional wisdom says that so long as Oil is breaking down, that’s got to be great for the rest of the economy. Right? I mean Oil is heading for double digits. That’s got to mean lowered inflation, easing at the gas pump, and more affordable home heating oil, especially with the colder months approaching. So, what’s going on here? What’s going on is that commodities are in a brutal bear market, and have been for the past two months. Many pundits see Oil falling to double digits by 2009. From the chart below, it appears that the long-term trend line would provide support in the 75-85 range.
I read on several Apple investor boards the theory that Apple’s September 9th event announcement was deplete of new MacBook announcements. This is ridiculous and myopic to think that Apple has such influence over the rest of the markets, but it goes to show just how focused some Apple investors are. Here at the Wilderness, we look at the overall markets first, then markets, followed by sectors, then we look at how specific leaders lead action within those sectors. In any case, this bearish move by investors was in reaction to the fact that commodities are in a horrific down market, and it speaks volumes about the overall health of the rest of the markets.
So, now after Tuesday’s action, the daily charts are starting are starting to turn more bearish. The Volatility Index (VIX) broke out of a seven week down channel, perhaps indicating that the rally will not resume. Another indicator of a turn is that the MACD on the S&P and Dow daily charts has yet to penetrate into positive territory, and on the Naz it has accelerated in a downward direction after the slow line crossed over the fast line a few sessions ago.
Many sectors, including Tech, are starting to show topping patterns. For example, the Financial sector plotted a black candle, which generally indicates the end to an uptrend. Financials, ironically have been a leader over the pasts few weeks. As of this writing (9:40 AM EST, Wednesday Aug 2), the XLF is taking a beating, it gapped down, although it’s fighting back. This weakness may be a catalyst for other markets to retreat over the coming days. One positive indicator is a zero MACD crossover. We’ll see if the Bulls can push it over the line.
Other leaders, such as RIMM and BIDU, are showing topping patterns as well, which does not bode well for the markets. RIMM lost its support at 125 yesterday (Aug 2) then tested that lost level and failed miserably. And today, RIMM is further ing its decline. Remarkably, AAPL is holding up well compared to the other horsemen (RIMM, GOOG, BIDU, AMZN). I believe AAPL may prove to be a lone star in this bunch, but it’s going to have to bear a lot of weight on it’s shoulders if the Tech sector breaks down completely.
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