Research Excerpts

Is The September US Market Decline Over? Watch AAPL, WMT.

Posted on: Tuesday, November 20th, 2012

In our October 30th blog posting, entitled AAPL: Key To The Rest Of 2012?, we said:

AAPL met our $605 target on October 26th to capture a $31 per share, 5% decline in a little over 2 weeks, but is now positioned at what we believe is a major decision point for the stock.  At 5% of the S&P 500 and 20% of the market-leading NASDAQ 100 in terms of market cap. APPL’s ability — or inability — to recover from here will be seen as a coincident if not leading indication of what to potentially expect from the US broad market for the rest of 2012.”

Since our October 30th posting, AAPL has declined by an additional 98 points or 16% through the end of last week.  During the same period the bellwether S&P 500 has coincidentally declined by 69 points or 5% while the NASDAQ 100 has declined by 172 points or 6%.

The following (green text) is an excerpt from our Monday November 19th Keys To This Week report.  Asbury Research subscribers can view the entire report by logging into our Research Center via the big gold button at the upper right corner of the screen.

Keys To This Week, one of 8 different reports that Asbury Research produces for subscribers at various intervals throughout the month, is a detailed weekly outline of key market factors and corresponding charts pertaining to the US stock market and market sectors, US interest rates, and the US Dollar, that are most likely to influence US financial market direction during the upcoming week.


Excerpt from Keys To This Week
Monday. November 19th 2012
Subject: The US Stock Market

Charts 2 and 3 are updated versions of the ones that appeared in our November 16th report entitled Giants AAPL, WMT At Major Decision Point, Could Trigger Next Leg Lower In US Market (access requires subscription). Chart 2 below shows that Apple Computer (AAPL) closed appreciably below underlying support at $522 per share on Friday, its May 18th benchmark low, potentially clearing the way for an additional 18% decline into the next formidable support level at $423 to $405.

Chart 2

Meanwhile, Chart 3 (not shown) points out that Wal-Mart (WMT) finished last week right on top of major support at $67.56 per share, its 200-day moving average. This represents a major decision point where investors must decide whether or not WMT’s October 2011 major uptrend is still intact.

continued…


AAPL and WMT are the 1st and 3rd largest US stocks according to market cap, and thus have a huge influence over the direction of the major US indexes that they are members of: the S&P 500 (SPX), the NASDAQ 100 (NDX), and the Dow Jones Industrial Average (DJIA).  Accordingly, how they respond to the key price levels they are currently testing will be a critical indication of where the US broad market is headed between now and year end.

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