May 10, 2016
Mish's Daily
By Geoff Bysshe
Is AMZN Worth More than AAPL?
Today's commentary was written by Geoff Bysshe, co-founder of MarketGauge.
Today, as AMZN soared to all-time highs on a new $1,000 price target from Deutsche Bank, AAPL flirted with its 2 year lows. Even the obvious rally going on in the general market and the tech sector, could not get AAPL to break out of its opening range today!
Is AMZN worth more than AAPL?
If AMZN does climb to $1,000 that would put its market cap at roughly $470B which not far from AAPL’s current market cap of just over $500B.
Of course there are a lot of assumptions built into that statement, such as, AMZN stops at the $1,000 mark, and AAPL doesn’t slip through its current support and fall 15% to the next big level of support around $80!
I’m kidding. I think.
More importantly, today demonstrated that this market doesn’t need AAPL to rally. If new leaders can emerge then the rally can continue with or without AAPL.
For over a year this market has been rolling from one set of leaders to another. So that’s where your attention should be, not on AAPL.
But I wouldn’t write AAPL off as dead money. In fact I think it’s due for a bounce.
Just like the pattern I pointed out for the markets over the last few days, look for AAPL to close over a prior day’s high, and then you can start looking for its elusive rally.
Based on how beaten down its shares have been. The rally could be a swift one, but not guarantees on how long it will last. It’s not a leader anymore.
S&P 500 (SPY) Finally got going. Over 207 and rallied like a good bounce off of the 50 DMA should. Look for support around 207.70 on a pull back. Next resistance is 209.80.
Russell 2000 (IWM) Not as strong as the SPY, but a good confirmation of a bounce off the 50 DMA. 112.50 is significant resistance. 111.85 is support, then 111 and 110.50.
Dow (DIA) Nice rally with SPY and QQQ. 180.25 is the next big resistance.
Nasdaq (QQQ) Nice big follow through day without any help from AAPL. The 50 and 200 DMA are at 107.75 and 107.60 respectively, but the more important level to watch is 108. There should be support at 106.80 and 106.40 and then 105.50.
XLF (Financials) Nice strong day that cleared 23.30. Now 23.20 is the key support to hold.
KRE (Regional Banks) Still under the 10 DMA, but if it can hold 39.20 it’s in an up move now.
SMH (Semiconductors) Finally closed over 52 and the 200 DMA. Let’s see if it can hold up. 53 is still likely to be resistance. Over 53 it could run up.
IYT (Transportation) The 10 and 50 DMA both came in at the same area and put a lid on it today. Needs to hold 139.50.
XRT (Retail) A quiet inside day on a day when the market was up nicely. Be careful if this breaks lower.
IYR (Real Estate) Healthy consolidation as the rest of the market had its day to rally today.
GLD (Gold Trust) Recovered from morning weakness nicely. Today’s high matched yesterday’s making this are even more important now.
SLV (Silver) Consolidated near the top of yesterday’s range. Next big support should be a 16, and 16.50 could be big resistance.
GDX (Gold Miners) Nice reversal off the daily low after good relative strength vs. GLD in the morning. Could be ready to continue higher. 24.20 should hold as support, and 23.30 is now big support.
USO (US Oil Fund) Closed over yesterday’s high. A first since the 4/29 high. Needs to get back over 11.05, to consider longs.
XOP (Oil and Gas Exploration) Nice rally and close over the prior day’s high at the 200 DMA. Look for support at 33 and resistance at 34.50.
TAN (Guggenheim Solar Energy) Pulled down by SCTY earnings, but momentum has been relentless on the downside. Bounced off of a logical area, 21, but didn’t create any convincing reversal pattern.
TLT (iShares 20+ Year Treasuries) Interesting that it held up with a 1+% move up in stocks. It now has 3 days of tight consolidation after a big breakout over the 50 DMA. Key levels to watch are 131.15 and 130.15. Watch for a big move either way this breaks.
UUP (Dollar Bull) 5th consecutive up day after last week’s reversal. However, it is slowing down at the big resistance level of 24.40. There is more resistance over 24.40, but if it can break 24.40 it may have put in a significant low last Wednesday.
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