Wednesday, 5 December 2012

The Apple Phenomenon decides US fate

Dear Friends,

You may be amazed by "The Apple Phenomenon" theory that the market follow closely to Apple movement. But we have followed closely with my darling stock Apple to know this trend. If Apple goes up $100, the stock market goes up generally. If Apple falls $200, the stock market goes down generally.

Why?

Bcos it represents 5% of S&P500 index and 20% of Nasdaq composite. Of course, with Apple recent drop, the percentage may differ a bit. But more importantly, if Apple goes down $30, it gives the Bears a reason to short the market. The market is always looking at the world's most influential company to know the market confidence.

Attached are the charts of Apple and S&P500 index. Did u see any similarity in the direction?

Chart of Apple:


Chart of S&P500:



Let us see if Apple breaks $600 barrier soon. We think it will before the end of the year because of expectation about its next earnings results in January. So let us in the meantime, enjoy the run.

Regards
Daniel
www.danielloh.com

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