The weakest minion can terminate the Apple dominion.
Apples, like all fruit, are born to serve two purposes. To spread the apple species and to feed birds, worms and humans.
The life of the apple is interesting to watch. It began as a tiny seed in the fields of NASDAQ in 1980, weighing at $0.39 (or grams). Now the apple has grown to be almost 800 grams. That is record heavy for an apple. (There have been several stock splits that lowered the price of each apple)
The miracle of nature is, that a tiny cell can multiply thousands upon thousands of times. In this case, our apple fruit has grown almost 2000x since its birth.
We have fed off of apples for a long long time. The consumption of apples (measured in pieces) reached its peak in 2010. Most who needed to eat a single apple, have eaten it. Volume is significantly decreasing.
This apple fruit is now massive in size. No sane person would eat 800 grams of apple in an evening. Of course volume has significantly weakened. Now with a single apple you can feed an entire family.
To make some sense of the real need for apples, we have to consider the daily consumption of apples in grams, not in a piece-by-piece basis. This indicators makes a very simple calculation. It multiplies volume with the logarithm of price.
If we wish to compare price to volume, we must convert them both in the same scale. Volume is linear, while price is logarithmic. To compare apples to apples, price must be turned into a linear number.
An interesting phenomenon takes shape right in front of our eyes. Apple consumption reached its peak in 2008. From then, the market is getting progressively more saturated in apples.
Think about it. Everyone who needed an apple, has eaten one. There is almost nobody left who has never eaten an apple.
Up until 2008, most the majority of apples went into our mouths. Now, the majority of apples will have to evacuate through the back door.
Consumers have eaten too much of everything, not just apples. Similar saturation problems occur in the wider feed (equity) market.
Stepping aside from the wider eating problem, we can perform some more analysis on recent price action of apples. To further support the following analysis, I will consult some professionals. Robert D. Edwards, John Magee and W.H.C. Bassetti. In their book called "Technical Analysis of Stock Trends (Eleventh Edition)", in page 62 there is an incredible chart.
As it turns out, Head-and-Shoulders patterns can be non-normal. With many bumps for heads and shoulders. This chart will be used as a guideline for recent apple prices.
These charts are too similar to ignore. Truth is usually hidden right under our noses. We may choose to ignore it, but it still exists.
While the NL (Neck Line) trend is intact, a wider trend is at risk.
Even if price tries to cloud your judgement using fakeouts, you must stay strong in your view.
And if you are afraid of being wrong, you must find more ways to prove that you are not an elephant.
Tread lightly, for this is hallowed ground. -Father Grigori
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Has Big Tech in general ran out of fuel? With consumer savings in 2007 levels (just before GFC), a single word is spelled in big, bold letters... T.R.O.U.B.L.E.
Couple that with diverging unemployment... C.H.A.O.S.
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RSI divergence can be created on phenomena like these:
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Apple represents consumer technology. With15 years of iPhone, growth was exponential against all antagonists. Microsoft has been working with governments developing Digital Identities. It represents government technology. Now Microsoft may take the lead again.
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Apple is probably going to become something like Coca-Cola. You will see it everywhere, and you will get used to it. It will be a daily utility like water, electricity.
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One note on US Titans.
McDonald's sells a Coca-Cola product with virtually every meal. MCD is breaking down against KO. KO buys MCD. You heard that here first.
Never forget the 30 year cycle. KO can do a lot, and sooner rather than later. AAPL on the other hand, will have to suffer for 30 years. I wish good luck on the apple. It served us well!
I am writing this on a recent MacBook Pro. I am not an Apple hater.
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Dollar Breakdown vs Euro. Dollar Breakdown vs Ruble. The American Dream, was just that. A dream.
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Never forget the 30 year cycle of the markets.
In the following chart that contains legal indicators, we calculate a log-regression of the past 30 years of Money Supply.
The similarity is striking. In 2000 money supply had a significant spike. Years later, money supply saw a significant stagnation. Money supply recessed from the top of the channel (2000) to the bottom (June 2008)
The same is apparently occurring now. A spike in money supply (peak in 2021) is followed by a dwindling money supply. It is unknown when the bottom will come. Inevitably, such a significant depletion of liquidity will result in a major crisis in the years to come.
Remember: Fast and decisive crashes are a characteristic of an efficient market. MMT has resulted in investments getting significantly positively correlated. All investors manage to perform "better than average". MMT is a double-edged blade. In good times it gives incredible gains because of positive correlation. In bad times (sell-offs) that inevitably will come, a positive correlation leads to magnificent crashes. Therefore, brace for impact!
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Curiously, in the exact past 30 years, this "money supply bull-flag" has taken shape. Currency-in-circulation is on top, and M2SL on the bottom.
According to FRED: - The series (M2SL) equals total balances maintained plus currency in circulation (CURRCIR). - Total balances maintained are balances that an institution holds in a reserve account directly at a Federal Reserve Bank.
If withdrawn money has taken the shape of a bull flag against total balances, this could mean only one thing. If this bull flag breaks out, it will lead to a MASSIVE withdrawal of banked money into circulated money.
Many questions arise: Money held by institutions in reserve accounts has not lead to inflation. If a significant part of that money ends up in circulation, how will that affect inflation? What will be the cause of a probable "Big Withdrawal" and what will the repercussions be?
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Apple is suffering from a chronic case of bearish divergence
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Never underestimate the scale of an AI Bubble, similar to the .com one. Internet was full of promise in 1990s. AI is full of promise in 2020s. Ericsson could be an example for Apple to, unfortunately, follow. While we cannot be certain of what point we are in the cycle... ...we are however certain that the time will come, when the only way for AI will be down.
Remember. The blow-off top has absolutely no bearish technicals. Apple is weak now. Its stock will certainly get stronger when they join NVDA to their impeding doom.
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The ultimate top of ERIC was a simple, HnS.
Maybe you will get lucky and manage to make the ultimate short on Apple. Sorry to burst your bubble, but you will probably not. HnS is visible only in retrospect. The multi-month whipsaw of Ericsson after the peak murdered bulls and bears alike.
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This is when AAPL died. Diminishing volume plus a gap up. Recipe for disaster.
The floor is lava. And the ground for AAPL is in 2015 levels.
"There is almost nobody left who has never eaten an apple" means its exponential growth stage is behind, but apple now becomes rice and bread that the average consumer must eat regularly after 2 - 3 years, and almost no alternative the apple farm main income source doesn't even come from selling apple the fruit (physical products) anymore, but flavouring (App store & services) and merchandising to tourists (wearables & accessories). They also have another card in their sleeves (Vision Pro & augmented reality store) that forces everyone to replace daily meat consumption with apples The farm also have a billion followers that trust the brand more than their own governments and religion In another word, apple has achieved Godhood
akikostas
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@louistran_016, Is there anything left to achieve? They are already praised as God. And there is the saying that when your god becomes popular, it is time to change god. As per Vision Pro: An ambitious product does not guarantee future growth. We also don't know how much of it is already priced-in. We don't know the consumer reception (and their ability to buy it). Consumer savings are in 2007 levels. With families struggling to pay the rent, a gimmick will be in the back of their mind, not their front.
akikostas
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@louistran_016, Apple selling services (like countless more companies) is like admitting defeat / saturation. With App Store losing its monopoly in EU, many countries will certainly follow. If we are to talk Apple, we must include the following: Apple mastered hardware for many years. Software stability / polish is inexcusable. Apple services survived only because of the famous walled garden.
Final thought: Technology devices represent consumerism and exponential growth. Services are utilities, they cannot sustain exponential growth. Apple switching to services is like Apple transforming from a technology company to a water company. The investment strategy will be vastly different from what it is now.
louistran_016
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@akikostas, you're 100% correct, AAPL is following ADBE and CRM to be a service first utility in the next 5 years what will be the next exponential growth seed for the Nasdaq? Is it Palantir, Anduril, SpaceX...? would be interesting to follow
akikostas
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@louistran_016, I haven't done any research on possible leaders in exponential growth. I have been very focused on developing technical indicators to help me shape a clear view on what I analyze. There are countless components in nasdaq, it sounds like a lot of hard and interesting work!
I have also been looking at the non-exponential periods of AAPL and NVDA, looking for clues as to why and when these stocks exploded.
fantasyste
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@louistran_016, stop thinking about what the media wants you to believe to be the next unicorns. SpaceX is just a scam like his founder, see Tesla go BK by 2030
fantasyste
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@louistran_016, When Chinese government will ban its citizens to use Apple, Apple falls from the tree.. @akikostas I dont agree with KO... it also is in an overall saturated market, with people shifting into more "healthy-style" diets and drinks... but, they can acquire some brands and go parabolic again
louistran_016
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@fantasyste, lol my dad worked for the government and has been using 1 Android for work and 1 iPhone for personal since 2009, you think the ban is something no one has thought of?
louistran_016
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@fantasyste, again not to say Apple will never fall, but pls stop thinking about iPhone sale as their main revenue stream, that thought is severly outdated
akikostas
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@fantasyste There has to be some invention / acquisition of course for new records.
the apple farm main income source doesn't even come from selling apple the fruit (physical products) anymore, but flavouring (App store & services) and merchandising to tourists (wearables & accessories). They also have another card in their sleeves (Vision Pro & augmented reality store) that forces everyone to replace daily meat consumption with apples
The farm also have a billion followers that trust the brand more than their own governments and religion
In another word, apple has achieved Godhood