The bears continue to do damage with oil and copper continuing their fall to new lows. In addition, the VIX closed at its highest level on an up day of the year. The VIX also closed above 21 on three consecutive up days for the first time since 12/2-12/06 and is on pace to close higher on back to back weeks for the first time since mid-November. Not be outdone as a bearish catalyst in its own right, the dollar edged higher for a 12th consecutive day, the dollar hasn’t had a down day once this month. As a result of these bearish technical events, the markets continued to drift lower.
Most telling to us was the action today in stocks like XOM, JPM, and FCX. All three initially started out the day very much in the green. However, by the time the closing bell sounded they were substantially lower, with XOM being the only one still able to finish green. When market leaders like these can’t hold gains, then you can’t expect the market to. Hey speaking of leaders, did you catch the action in AAPL today? The biggest company in the country slid to fresh new lows as it again broke below its prior days low, something its managed to do 4 days in a row.
AAPL hit an all time high of $644 on April 10th, but that same day it closed in negative territory. Out of the 27 trading days that have taken place from the time AAPL hit its all time high (4/10 included), AAPL has finished positive 6 of them, or just 22%. With May off to a brutal start, AAPL is on pace to post 2 consecutive monthly losses for just the 3rd time since bottoming in January 2009. The most recent occurrence was August and September in 2011, when bulls will note that AAPL put in a short term bottom before rallying some 70% to its $644 high.
There’s a gaping hole in such an argument though. Following that August month, even though AAPL closed lower on the month in September, it managed to stay above its August low. This time around however, AAPL has already gone below its April low which is a distinct difference between the weakness now vs. then. Carry the weigh that AAPL does, and being the market index leader that the NASDAQ has been, the sooner AAPL establishes a new base the better it will be for the overall markets.
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