• 13 hours Is This The World’s First Truly Democratic Stock Exchange?
  • 16 hours India’s Wealthiest Set To Hold $23 Trillion By 2028
  • 19 hours First Quarter Profits Slip For World's Top Oil Companies
  • 21 hours The Yuan May Be China's Biggest Weakness
  • 2 days Hedge Funds Having A Banner Year
  • 2 days Disney Heiress Asks “Is There Such A Thing As Too Much?”
  • 2 days BHP Turns Bullish On EVs
  • 2 days Investors Turn Bullish On America’s Nuclear Decommissioning Business
  • 3 days The $90M Inflatable Rabbit Redefining Modern Art
  • 3 days Huawei’s Fate In The Air
  • 3 days Tesla Slashes Prices Again
  • 3 days The Modern History Of Financial Entropy
  • 4 days Italy’s Central Bank Embraces Sustainable Investing
  • 4 days Trump Lifts Metals Tariffs To Cool Simmering Trade War
  • 4 days Researchers Push To Limit Space Mining
  • 4 days Could China Start Dumping U.S. Treasury Bonds?
  • 5 days Is Winter Coming For HBO?
  • 5 days Rise Of EVs Signals Peak Gasoline
  • 6 days Jeff Bezos Doubles Down On Space Colonization Ambitions
  • 6 days Gold Mining Stocks Stuck In Limbo
Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

  1. Home
  2. Markets
  3. Other

Can Apple Provide A Bullish Reversal Catalyst For Stock Market?

Apple

An Apple A Day

Apple (AAPL) is due to report earnings after the bell Tuesday. Wall Street is known for lowering expectations prior to earnings in order to paint a more favorable picture of the actual results. Investors will have the hard numbers in hand in a few hours. From MarketWatch:

Analysts surveyed by FactSet expect Apple to just barely set a new iPhone sales record of 75 million, though that would mark a year-over-year improvement of just one million, versus much higher growth rates in the past. Morgan Stanley told investors in a note on Tuesday that they should brace for the first year-over-year sales decline for the iPhone since its 2007 launch.


Trends Speak To Economic Conviction

When the net aggregate opinion of all market participants is favorable, markets tend to push higher. Conversely, when the net aggregate opinion becomes pessimistic, markets tend to drop. Moving averages help us monitor the market's pulse. During a correction, the S&P 500 (shown in black below) tends to drop below the colored moving averages. Also note the slopes of the colored moving averages (MAs) tend to roll over during sharper pullbacks in equity prices. The bullish period on the right side of the chart looks quite a bit different (price above MAs, slopes of MAs are positive).

S&P500 1990-1991 Chart


How Does The Same Chart Look Today?

Even with the S&P 500 up 23 points during Tuesday's session, the slopes of the moving averages are all negative, which is indicative of a bearish trend. Our interest in stocks would increase if the chart below can morph into something similar to the right side of the 1990-1991 chart above.

S&P500 Daily Chart


Investment Implications - The Weight of The Evidence

As noted in this week's video, the concerning evidence is starting to spill over into longer timeframes. The hard data in hand continues to lean toward bonds (IEF) and cash, relative to equities. With a Federal Reserve statement coming Wednesday at 2:00 pm, it is prudent to keep an open mind about all outcomes, while respecting the market's current waning risk-reward profile.

 

Back to homepage

Leave a comment

Leave a comment