But aren’t we still looking at the NBA market? In the near term Apple has a ridge near 547 but in the bigger picture there’s a lot of support around the 427 level. I don’t anticipate Apple getting there now but a move down there would be a 33% drop off the high. By the time bearish phases do their damage individual stocks suffer much more than do the major averages.
So by the time this is all over, we have a couple of realistic targets not only for technology but the most important market leader as well. Keep in mind this is just a hypothesis given the information we have right now. The reality of the situation is going to depend upon our friend the VIX. Corrections don’t have to hit any particular target in any given point in time. It all depends on whether fear builds over time. We can be at 30 in 2 weeks or it can take another 3 months. The challenge for bulls to hang in there has been on the good days. The bullish days have been nearly happy and unwound whatever respect was building on the down days.
If there is any upside all of this it’s the oil market. Prices are back down in the mid 90’s which should amount to a mini tax decrease on the American consumer as we see relief coming into the beginning of the summer driving season. I almost forgot, the jobs number was only 115K and clearly the focus for traders is demand destruction because the market is in one of its bearish phases. It would be nice to see oil level off when the market goes up but the catch 22 is the only time we do see relief at the pump is when the market turns the other way. It’s a case of heads I win and tails you lose. We all want to see the recovery pick up steam and give everyone a job who wants one. However, when the market goes up which signifies a better economy gas prices piggyback along for the ride. It seems like the only time we get relief at the pump is when bulls rein in their horns. When the market bottomed in 2009, the Circle K down the street from me was $1.61.
Recently, I saw prices hit $4.20 and I know other parts of the country got hit worse. I certainly don’t like 4.20 but if wouldn’t ever want to see 1.61 again if it meant the economy has to come unglued to get there. At the rate we are going, I suspect the equity market should get some kind of a climax to this leg down this week.