If ever the words “Trade What You See” had more relevance … Despite many signs to the contrary the past two weeks have seen an impressive rally (or retracement), with many leading stocks reaching new highs, and many OVI readings surging into positive territory.
That doesn’t necessarily mean all the moves have been “tradeable” per se, but it does illustrate that it never pays to be beligerently one way or the other with your opinions. You have to be pragmatic in the markets, and having an opinion is usually counter-productive.
In the next 10 days we’ll discover if this is a resumption of the bullish market trend, or if it’s simply a strong retracement before a bearish period begins. The fact is that no-one knows … not yet at least.
Obviously AAPL is getting the headlines at this time due to its moribund-looking new product lines and disappointing China strategy. In many ways what they announced had been predicted, so it’s slightly surprising that it wasn’t built into the share price. What is clear now – just in case there was any doubt before – is that AAPL is now no longer a growth stock. Don’t worry – we’ll still have plenty of fun with it in the months and years ahead, but it’s very unlikely to resume its stellar growth, as much as anything due to the Law of Big Numbers. In other words, it had grown too big to continue to grow as it had been.
However, as the institutions and big investors rework their weightings in AAPL there will be opportunities, long and short, for us with our specific method, so don’t despair!
I’ll be in contact again shortly.
All the best