AAPL weighs down the market as trade slows
Early morning selling gave way to buyers despite AAPL stock performance after the National Enquirer posts a picture of Steve Jobs. Once again, another picture surfaced of Steve Jobs entering a cancer clinic and the stock sells off. The move in AAPL stock took away 3points from the NASDAQ, but by the close the index was able to close up 21bps. The Russell 2000 led the way finishing higher by 68bps, but volume dropped across the board showing institutions took a break from actively participating in the market. A good day for the market as this uptrend continues.
The market was blasted with a slew of economic data today, but the highlight was Consumer Inflation. Commodity prices continue to push higher and higher prices have crept into producer prices. Despite the government’s attempt to hide inflation consumers are feeling the pinch at the register. Most notably are cotton prices as the commodity is up more than 40% since the beginning of the year. Cotton hit an all-time high today finishing limit up. It is time to bring back competition for cotton, hemp! Hemp used to be a large part of the US agriculture product line. To lower cotton prices, it is time to present competition to the fold. I digress; the bottom line is inflation is beginning to take center stage.
For the second week in a row the AAII Bull index has fallen. This week the index ended at 46.58% and while this is still high, it is far from the highs from the end of December. Bears even fell to 25.57% as the price action in the markets has moved the AAII to the neutral camp. Majority of these respondents are more than likely judging by their gut feel on the market. While we pay attention to the price and volume action of the market we’ll be in a far superior position to take gains from this market.
Tomorrow we’ll get a break from economic data and we’ll see how stocks will wrap the week up. Today’s lack of volume isn’t a major concern, but hitting new highs on week volume for one day isn’t necessarily a HUGE red flag. It is something to pay attention over the next few days. Another red flag would be any stalling action the market puts in. Our decision process is driven by price and volume action and not speculation. However, we need to be identify signals the market is ready to undergo a correction. Pay attention to the key signals, avoid stock market tips, and always cut your losses short!
