Thursday, January 24, 2013


AAPL's relative weakness over the past 2 months hasn't stopped the S&P from going higher, why would it now? 

AAPL is in a world of its own, with a cult-like fan base despite the deteriorating fundamentals.  Valuation is still too high and not many are forecasting what I see as a repeat of the Apple computer debacle in the 1990s, when overpriced Macs got crushed by a flood of cheaper, faster and more prolific competitors.   Samsung, MSFT, RIMM, Nokia, HTC, Motorola, etc. will shrink AAPL market share as phones and tablets become commoditized.

There is no near term catalyst to take this market lower.  The debt ceiling can has been kicked for 3 months, earnings have been mostly beats, with few exceptions. 

The bears and underinvested fundies must be quite frustrated with this market, with no corrections and just grind it higher action day after day.  This is a hedge fund / institutional ruled market, there is very retail money playing here.  Retail gave up on stocks after 2008 and they will not come back for several years.

The hedgies and institutions follow the herd, they pile in until the market reaches a saturation point.   I will wait to see some intraday volatility before I am willing to take a short position for more than a daytrade.  Obviously, we aren't there yet.

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