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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

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

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4 Stocks That Are Signaling The Stock Market Is Ready To Fall

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VIX

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.

^VIX Chart

^VIX data by YCharts

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.

S&P 500

^SPX Chart

^SPX data by YCharts

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.

AAPL Chart

AAPL data by YCharts

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.

amazon

Alphabet

Alphabet is in the same boat, well overbought.

alphabet

Microsoft

Microsoft too…

microsoft

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…

 

market cap
(Data From YCharts)

Did I mention all of these companies report on Wednesday and Thursday this week? Stay tuned.

Photo Credit Via Flickr

Michael Kramer and the clients of Mott Capital own shares of GOOGL

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #vix #sp500 #apple #alphabet #microsoft #amazon