Morning Gains are Erased as Buyers Continue to Stay Away
A much better jobless claims figure helped set the early tone of the market. Unfortunately, it would not last as sellers continued their relentless pursuit. It certainly didn’t help that reports of the jobless claim figure being falsified by a large state not reporting its quarterly figures. At any rate what is important is how this market is acting and how weak leaders are performing. Is it finally AAPL’s time to undergo a big correction? Time will tell, but what we are seeing now is some big league weakness. Heading into the weekend it will be interesting to see how we close this troubling week. AAPL is a big concern due to its overall size in the market not to mention its weighting in mutual funds. Growth funds have feasted on AAPL and who can blame them with its ability to produce. However, with the stock over-owned and a LARGE part of numerous portfolios any correction could bring on disaster for those left holding onto AAPL. While the company may be cheap to growth when sellers want out the flood gates will open and when they do look out. The VIX continues to remain suppressed showing the market really isn’t fearful here. Perhaps many still believe QE forever will save stocks. This is where we get SOS – Save Our Stocks program from the Federal Reserve. There are still many market pundits hoping for the S&P 500 to finish the year above 1500 topping out at 1550 for the year. Bullishness among II survey respondents continues to be very high and with bears nearly extinct. It is easy to see why the VIX remains around the 16 level as market participants are very bullish without fear. We are no longer in an uptrend and must be vigilant by staying nimble and cash heavy. If this market turns around we’ll go with it, but for now we are in dangerous territory. Have a great ending to this week and enjoy the weekend! 