So Goes Apple - So Goes the Market???
Apple's upside breakout has failed. Last week Apple fell more than 6% in a single day. This represents more than 4 times its historic volatility, an anomaly for sure. Apple's overall decline from its peak was roughly 25%.
So why didn't the market fall as well? It is not just Apple that declined quickly and sharply, but a lot of the recent high quality market leaders as well, including some stocks we held. Still, most of the major indexes remain unshaken. I was baffled by this strange market behavior. I really needed to get my head around this.
Apple / HP
I do not plan on chasing the money going into sub-par companies the likes of HP. Meg Whitman has stated that it will take at least 5 years to turn the company around, dead money.
Even though we were beat up a little lately, I think we need to remain optimistic. Politicians appear to be playing a game of chicken as they comment before the cameras, but the market believes that progress is being made behind the scenes.
When the Fiscal Cliff issues are fixed to some extent I would expect a very meaningful rally in the market. We want to be there when that happens.