A late day rally helps push the markets higher as volume expands across the board. AAPL and GOOG have completely gone in different directions as GOOG hit a new high as AAPL dropped below its 50 day moving average. Many will search for the “why” AAPL dropped, but all that matters is that it did and continues to be a laggard. GOOG on the other hand continues to act strong pushing into new high territory. On the economic front there were a few disappointments from Industrial Production and the Empire Manufacturing index. On the bright side the NAHB index climbed to 44 from 41. Hard to argue with this market and many pundits continue to believe it will continue. It could end at any time and we have the process to identify with high probability a top is in place. Stick with the trend.
AAPL continues to struggle quite a bit and while we can attest to their great products it simply doesn’t matter. More than 3000 institutions are long the stock and it is simply over owned. Supply is clearly too much for demand and given the recent action the stock will remain depressed. GOOG on the other hand has been a super strong stock. Even with last October’s drop it has been able to battle back and lead the NASDAQ in AAPL’s absence.
CSCO jumped more than 8% in after-hours trading as the street cheered its report. The stock will likely be a breakout candidate tomorrow morning. It will certainly help the NASDAQ tomorrow morning and if AAPL can halt its decline we are setup for a green open. Many earnings breakouts have been working well and CSCO appears it will be a winner too.
VIX has been moving up along with the market. Even though many equate the movement in VIX with the direction of the market is simply reflects expected volatility. That means in either direction. A rising VIX could simply mean there are bigger moves ahead for the market in either direction. Price will let us know when to step aside no matter how the VIX moves. Stick with price.
