Unlike the broader market celebrating at/near all time highs, Apple stock has had a different story. The “AI” storyline with semiconductors had taken over and I think this risk level is not receiving adequate attention.
My take: Apple is approaching its $165 October low level. Price below here marks a visible breakdown. If price closes below $165, this is a market headwind.
https://x.com/tomthetrader1/status/1769548357280895169?s=20
S&P 500 thoughts: Euphoria blinding participants is similar to how Fear paralyzes.
Buying greed was rewarded in December, and now active fund managers are pressing the long bet.
The chart marks the relative peaks in sentiment (CNN Fear & Greed) and exposure (NAAIM Index). The last two years have sent a simple message. Significant declines have consistently followed periods of excessive greed and heightened exposure. "Buy fear, sell greed" in plain sight.
December 2023 stands as the exception, where "buying greed" proved rewarding. Today the market is entering month 4 of operating in a state of greed, and the last time fund managers positioned this bullishly was in November 2021. Standalone the analysis of sentiment and positioning is insufficient, but provides valuable context to the operating environment.
My outlook remains unpopular. When all three correction criteria are met (failed momentum, loss of short term trend, and negative breadth) a decline to 4500 - 4600 resets the euphoria. This is 10-12% correction from Friday's closing price. Ending last week, 1 of 3 criteria are active.
https://x.com/tomthetrader1/status/1769371852345081972?s=20
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