#STOCKS – on $AAPL gone parabolic

At the risk of a massive understatement, let’s just say AAPL has gone up…a lot.

In fact one look at its chart below reveals is has gone parabolic.

Let’s define a parabolic move first. Basically, according the website, Prometheos Market Insight, when a stock makes a enough of a move to create three distinct supporting trend lines (see the green lines on the chart below), then accelerates, it is in a parabolic move (the red line on the chart).

There is both good news in that, and bad news.

The good news you own it, the bad news its latest rise is unsustainable. Although one can only guess when and at what level it parabola ends (the way it always is with that phenomenon), but when the inevitable end comes it will likely be violent and the stock could eventually go back to where the parabolic began.

At this point, a rough estimate of where it began in AAPL is around $230.

It’s hard to believe it will ever quit going up as it’s wildly (exuberantly) rising, but I would suggest there is no profit here until one sells.

Also, one other thing to keep in mind, AAPL today, according to Yahoo Finance, has a market cap of 1.377 trillion dollars. That in itself is unprecedented in market history, but it is also nearly $100 billion higher than next highest market cap, MSFT (but that as they say is another story).

(click on the chart for a larger view)

#Stocks – the last bounce of a one-time main-street giant

In the town where I live there sits a unmistakable store front on a main downtown street. It is half a block wide, on top of a basement with its upper stories a solid bricked-in facade. Inside the windows that stretch the length of its first floor there is nothing but empty space. It’s been closed for 30 years, ever since the mall opened on the north side of town. The same or similar buildings stands on some main street in nearly ever city and town in America.

Although often there no longer is a sign, for everyone over the age of thirty, it is instantly recognizable — “that’s the old J.C. Penny store,” people say.

Now, like other main-street icons, Sears, the Bon Marche, Woolworth and maybe some day, Macy’s, it is fading away.

And it is a sad, sad sight today – the relic of a bygone era, the hollow memory now of a time when the country boomed, when optimistic people shopped downtown for its clothing line that was both reliably well-made and economical. In other words, before there were malls.

Moving to the mall could not save it and in these times it is ravaged by on-line shopping.

What to do with the building now has more than one city or town stymied. It’s is too small to be a Walmart and too big for nearly anything else. In my town, there is a developer who would like to renovate it into apartments by adding two more stories to it, and making the the basement into a parking garage and leaving the street-level as retail space, but he wants the city government to subsidize the project so he has no risk. My son, an urban planner, would like to turn it into the city’s much-needed new library. But neither of those plans are moving forward.

JCP – a look at its stock chart below is a picture worth a million words, showing the long steady fall in the past 10 years. There’s that high on the chart at seventy-six dollars and the recent low at 62 cents. It has doubled off that penny-stock low (no pun intended) but that is not some hope springing eternal. That is most likely the familiar sign of last of the shorts closing out their holds. After they are gone there will no buyers left.

And that will be another nail in the coffin of a once-great American commercial era.

(click on the chart for a larger view)

#MarketTiming – the Santa Claus rally goes crazy

The Santa Claus rally which arrived with a buy signal on the open of December 9th, is still going and going and going…

I wrote about this quiet rally trigger first in this link:

#MarketTiming – with not much fanfare Santa slips into view

Then, as the fanfare took hold:

#MarketTiming – the Santa Claus Rally, a progress report

Since that second post, TQQQ has gone from up from 9% to 17.7%, UPRO from 6% to 11.2%. The 3x-leveraged sector ETFs continue to surge: TECL (tech) up 21% now, ERX (energy) up 18.1% and SOXL (semis) up 29.9%. Among the bellwether stocks I follow, TSLA is leading the pack, up 27% now; NVDA up 13.4%; WYNN up 18.2% on a big jump out of a high-level consolidation today.

AAPL, which lagged early on, has now moved up a nice 10.9%, closing above 300.

Big gains in not much time – the rally is a mere 17 trading days old.

All of which is great for the bulls…except it’s all begun to go kind of crazy.

AAPL has a market cap of $1.3 trillion, somewhat insane no matter how much cash the company generates for buy-backs. MSFT is at $1.2 trillion; both GOOGL and AMZN are knocking on the trillion-dollar door. These stocks have market caps four and five times such “puny” companies as Walmart, Coca-Cola, Nike, Proctor and Gamble, Home Depot and even Exxon-Mobil. How crazy is this?

Speaking of buy-backs, corporate debt is likely piling up more and more as the FED keeps its foot on the printing-press pedal – margin debt did not move much last month so all this “irrational exuberance” has to be coming from somewhere.”

CNN Money’s “Fear and Greed” Index is at 97. Ninety-seven! That in and of itself is the stratosphere of extreme greed. It can’t go higher than 100. A year ago it touched 3, on a trap door that swings both ways.

Still, the market can go higher, and probably will, since there is momentum in that 97 number. It usually takes a divergence (a high below a high) in that index to trigger a decent down swing (see the red circles on the chart below). The index has to back off on a market dip (which is likely imminent) then fail to go higher as the market resumes its advance to another high.

And both breadth measures, the NYMO (short-term) and the all-important NYSI (longer-term) remain positive. So there is time for more rally.

Not much more to say at this time…except to note in markets going crazy (like 1999, like now) there is, in the end, no profit until one sells.

(click on the chart for a larger view)

#MarketTiming – $NYSI $10K stock trades

Long-term breadth (the NYSI) turned up Friday giving a buy signal for the open of the market today.

As suggested in this link #MarketTiming – the NYMO low above a low that was expected and would be necessary to have a chance for a rally. Today’s trading was sloppy sideways, probably just digesting last week’s gains, and although the NYSI did decline it stayed in positive territory.

If there is further weakness, there could be a whipsaw, but we’ll see when we see…

In the meantime, I expect more follow through to the upside.

In this link: #MarketTiming with $10,000 to trade I thought I’d sometimes address trading on limited capital — for the fun of it, for entertainment here and for anyone with limited capital.

The late great Kennedy Gammage of the Richland Report and for many years the keeper of the McClellan Oscillator flame, once wisely said: “Buy when the market tells you, sell when the stock tells you.” If I may, I would add to that “Also buy when the stock tells you.”

If one has but $10k, one needs to study up and pick stock favorites that have the ability to move with the market. Most stocks do move with the market but obviously some move better than others.

Today on Twitter I posted some Day-1 results selected by from my own bellwether stock list as examples of buying with the market as measured by the NYSI either turning up or turning down. Although, $10k readily computeS to a percentage gain or loss, I’m stating those gains in dollars gained or lost.

Clicking on the charts here will display larger chart details on Twitter.

THE WINNERS:

AND ONE LOSER TO SHOW NOTHING’S PERFECT:

#ShortStrangles on Stocks 10/07 – 10/11

This week’s strangles:

Last week’s results:

(Percentage gains and losses reflect returns on cost of strangles, not margin needed for the trade.)

#Stocks – and out of the blue the brokerages fell…

Reportedly, this slam down in the brokerage stock is a result of Charles Schwab (SCHW) announcing a no-commission policy for online trade with presumably its competitors to follow.

And this is precipitated, according to reports, by the brokerage Robin Hood, which has been not charging for trades since its beginning. Robin Hood? Compared to these others, is that even a competitive trading house?

Regardless, SCHW, AMTD, ETFC, and IBKR are (at the moment) down either double-digit percentages or close to it in an out-of-the-blue across-the-board plummet. AMTD is down 23% (Holy cow!).

Whatever.

I would note the NYSI (long-term breadth) is falling. When it is, “accidents” like these often happen.

(click on the chart panel for a larger view)

#ShortStrangles on Stocks 9/30 – 10/04

This week’s setups:

Last week’s results:

#MarijuanaStocks – the wither in the weed patch…

At one point last year, the marijuana stock sector was the leading sector in the entire market.

Everywhere analysts were hailing it as the next great growth sector, especially after Canada joined several states in the U.S. to legalize weed, both medically and for recreational use. Made sense, and before anyone could say “don’t Bogart that joint” there were cannabis shops practically fighting Starbucks for retail space.

#MarijuanaStocks – gains are high in the weed patch

At one point, the founder and CEO of TLRY, because he owned so much stock in his heralded IPO, was something like the fourth richest man in the world…for a day. But now that day is done.

The chart panel below tells the rest of the story and there is not much more to say about that.

(click on the charts for a larger view)

#IPOs – a stealth bear market since summer

It appears while the main indexes have held near their highs this year, there’s seems to be a stealth bear market going on with many of this year’s prominent IPOs.

As has been written about here before (last visited in the link below), this is maybe the easiest trade there is in the the market — buy above the high of the opening day, using that high or the low of the first day (depending on one’s individual risk tolerance) and hang on for the long term:

#IPOs – A Great Year For “Dummies”

Well, it was a great year for the likes of SWAV, PINS, ZIM, BYND, SOLY, that is until summer. While none of these stocks have been stopped out (the high of the first day) they have not been going well since summer but as can been seen in the chart panel below there were opportunities to take profits to preserve profits, especially in crazy run ups in say SWAV or the famous IPO for BYND.

Sometimes when stocks just go silly even the most disciplined IPO investor needs to take notice and thank his or her lucky stocks.

In the larger market picture, this is the kind of weakness that can be seen in many sectors. It is just easy to see here.

P.S. Once again, the LYFT chart is included as a cautionary tale to not buy unless an IPO takes out the high of its IPO day.

(click on the chart panel for a larger view)