Traders crowd the post that handles Morgan Stanley on the floor of the New York Stock Exchange near the close of trading, Wednesday Sept. 17, 2008. The Dow Jones industrial average dropped about 450 points, and investors seeking the safety of hard assets and government debt sent gold, oil and short-term Treasury's soaring. (AP Photo/Richard Drew)
4 Stocks That Are Signaling The Stock Market Is Ready To Fall
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4 Stocks That Are Signaling The Stock Market Is Ready To Fall
Did you notice that VIX today, surging to 13.5, a 23 percent jump? Now mind you, 13.5 is still a very low reading for the VIX, the chart below should help to put it into some perspective. So if you start hearing about the VIX surging today, don’t get all panic. I will begin worrying when it gets to 25. Until then, just watch it, and be is aware of it.
It could merely be a sign that traders are starting to buy some more protection in the market, and can you blame them? Have you seen how the high the S&P 500 relative strength reading is? It is at its highest level in 10 years! 10-years! That is crazy, the market has come too far too fast, and now it needs to cool off.
Sign are emerging that cooling period is coming, take Apple. I have said when it comes to the iPhone; I have no clue what the supply chain is saying, I just do not have that type of insight. The bull/bear camp seems evenly divided as well, but the Apple supplier stocks have acted terribly.
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Apple
Now for the first time, Apple stock is starting to act as though there may be an iPhone issue. Does that mean Apple dominance is over, no! But we can see that Apple’s stock is now down on the year vs. the S&P 500 that is up nearly 7 percent.
But the technical chart below suggests more downside risk, before meeting some support around $166. But a break of $166, could see Apple drop more, to potentially $159. Nothing earth-shattering, but it depends on when the drop comes before or after results. We shall continue to monitor this.
Amazon
Amazon just continues to rise into these upcoming results, and its RSI is no different then S&P 500, with a reading well into the 80’s.
Alphabet
Alphabet is in the same boat, well overbought.
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These aren’t just any companies they the four most significant companies by market cap in the S&P 500, representing nearly $3.1 trillion. If these four stocks go lower, then the whole market will go lower. Not only that but what I found shocking when I did this analysis is that Alphabet has a market cap that is only $30 billion less than Apple at $823 billion, vs. Apple’s $855 billion. Could Alphabet soon eclipse Apple, and be the first company to a trillion market cap? Maybe…
(Data From YCharts)
Did I mention all of these companies report on Wednesday and Thursday this week? Stay tuned.
Michael Kramer and the clients of Mott Capital own shares of GOOGL
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Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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