Apple based on current 119D movement. I still believe Apple is heading below $100 this year. It took a tad longer to see a drop because of corporate buybacks but that wont change the overall outlook for Apple.
Apple's price move from 2018 downward coincides with the Feds tapering. The August 2019 rally also coincides directly with the Fed increasing QE in August 2019. You can see somewhat normal movement until the price breaks out of the channel, although QE was introduced in 2008.
No QE = no more rallying. More QE = hyperinflation. Simple as that. I think the Fed will let equities take a bath to save the dollar... but than again, who knows?
Data Points:
MACD Crossed
RSI has room to come down
Q1 Guidance was grim
Comment
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Data Release (Bearish)
- Retail fell far below expectations. - Credit card usage at records. - Consumer Sentiment at a 2 year low.
Check out the Fib Time Zones. Supports your thesis of a major downtrend. The next major bull run is expected in the latter part of the 2020s. Obviously, anything can happen. Just thought this was an interesting confirmation.
WorldEconomics
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@spy_master, - I do see a bounce (bear market rally) coming mid July-August.. but we will see.
SpyMasterTrades
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@WorldEconomics, I see that too. Seasonality says July/Aug stocks go up. Also, market is too oversold to not bounce.
vahid_ch73
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hello
SpyMasterTrades
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Here's a chart we both can agree on. I've been seeing this in my charts as well and agree. Will be interesting to see how the stock of most capitalized company in the world can sustain this kind of downtrend without collateral damage (ETFs, indices, supplier companies, etc.). Even with this said, it is my strong conviction that tech/QQQ will rally in the coming weeks to months despite this long term downward move with AAPL is under way. Best
WorldEconomics
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@spy_master, - Apple has been the stronghold for the tech stocks. When Apple reported great earnings in Feb, it helped the markets rally for a week or so. But this earnings, while it was beat, their guidance was grim. I think from here on out, earnings will continue to get hammered, especially from Q3 and on. Financials aren't looking great and with the threat of this new pox virus, we could actually be heading into another lockdown. None of this is great for stocks, and if the Fed restarts its Easy Money (QE, 0% FFR) the dollar will hyper inflate. Im not sure where the capital will come for a rally if the Fed is tightening plus retail and institutional investors are net sellers.
SpyMasterTrades
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@WorldEconomics, I hardly dispute any of what you say, but I'm just strictly data and statistical driven. Here's some things I'm seeing: some commodity charts are in topping patterns, with overextended oscillators and are nearing major resistance (I'm tracking DBC closely for a potential fakeout), inflation charts looked to have peaked, and bond charts looked to have bottomed. Also, remember that right after a yield curve inversion, stocks always rebound and rapidly move higher in part because the initial worry of weak/slowing economic data gives investors the impression that the Fed will start to put the breaks on more interest rate hikes, and that demand decreasing will cool inflation. The market has too many interest rate hikes priced in than what the Fed is actually capable of doing within the timeframe needed to cool inflation with monetary policy. Part of their strategy is to make the market expect more than they will actually perform so as to reduce inflation expectations. The second that it becomes clear to the market that inflation is cooling and that interest rate hikes might not be as aggressive, QQQ will start outperforming SPY. Just my thoughts, feel free to connect and talk more. I have some charts that I can share. Best regards!
WorldEconomics
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@spy_master, - I think the thing you are missing is that the markets were made by QE and 0% FFR. Just google "Fed balance sheet vs S&P". Without the injection of liquidity, I can not see where the money will come from to push markets up. I am not saying markets won't rise because of an oversold rally, because bear market rallies exist. But, the overall trend is down. This happened in February where we saw a relief rally after a terrible January. My point is, we can't necessarily use old trend/TA for a market that no long has the Fed at the steering wheel.
As for inflation, the rate hikes have been pathetic. They're fighting over 10% with 25-50 basis point hikes? The hikes haven't been enough to fight inflation, hence why CPI keeps going up every month. Demand is falling because 67% of Americans live paycheck to paycheck and can't afford to buy stuff. The picture is far more grim that I think either of us can paint. The economic data, from almost every view is very bad. This has and will continue to translate into equities. The mad rush for employees has no been halted, and Walmart now has too many workers. We will start seeing a new wave of layoffs. Just watch the jobless reports and unemployment rate start creeping higher.
SpyMasterTrades
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@WorldEconomics, Trust me, I'm not missing the QE point. I check WALCL every single Thursday at the instant it's published. While the Fed has rolled off assets in mid-cycles and new market highs have occurred, right now they're in a Catch-22: They must do what they can't, they must sell off assets to reduce inflation but they can't without causing a massive recession. In fact, corporate bonds have already tanked to a level where the Fed actually had to make emergency purchases to buy them up in 2020! Realistically, they know they can't sell their corporate bonds. So they know that they can't do what they must. I totally agree that the long term picture is therefore very bleak. We're in a massive bubble. But remember markets don't fall vertically, forever, there are relief rallies and bull traps. My post was basically calling for a weeks to months long rally, not calling for a major long term bull run. Actually since my post was a QQQ/SPY ratio, I technically wasn't making a bull call at all. I have IXIC/SPX trendlines mapped out pretty well and I know QQQ is nearing the end of its outperformance trend with SPY. But it's not going to occur in the coming weeks according to the data and statistics. It's less than a 1% chance based on data I've seen in QQQ's derivative charts. Perhaps the trend line will break after the next rally.