Wheeeeee – I told you so!
Had to get that off my chest because I certainly did tell you so. We’ve been “ignoring and soaring” on the way back to our Must Hold Levels (and those are only halfway to a real bullish breakout – to keep things in perspective) and, while we have been able to put on a better show than we did last August – it’s only the 10th and the volume that took us from 1,350 to 1,400 on this Bespoke Chart has been the lowest volume of the entire year – certainly not enough to break on through to the other side.
Without volume, we’re just building a house of cards that can collapse at any moment – not really the environment in which we want to be paying top dollar for stocks, is it? And think about what happened in the fall of 2011 – we began “Operation Twist” – yet another form of QE in which the Fed purchased close to a TRILLION Dollars worth of long bonds over the past year to plow down interest rates and create another massive stealth bailout for the Financials.
And the Financials have led the market higher with XLF flying from $11.50 last Fall to $15 this week – a 30% recovery in a sector that makes up about 15% of the S&P so about 4.5% of the S&Ps move from 1,100 to 1,400 (27%) or 63 points is the result of the Financial Sector’s recovery. Tech is 19% of the S&P and AAPL is 20% of Tech so, without doing a lot of math, let’s give 60 points to AAPL as well – although maybe it should be more as AAPL is up from $360 to $620 – up 72%, while the entire Nasdaq (which AAPL is 20% of) is only up from 2,400 to 3,000 (25%).
That’s why we call it the AAPLDaq – I mean really, what is the point of the rest of the index when all they do is drag AAPL down? In Stock World Weekly of July 15th, I was quoted as saying AAPL had become “too big to succeed” with their $600Bn market cap ahead of earnings and they are having tremendous trouble getting over that $620 line but also, they are holding up surprisingly well after a disappointing…
