If They Sell Apple, It’s Over

Before the cash open, the S&Ps were off by 1%, the Nasdaq off by 2%, the Dow and the Russell each down a percent. The hit was coming across the board.

Then we did something unusual. We closed at 7533 on the SPX and opened smashing through the lower edge of the expected move, ripping through it like just a knife through butter. We already said screw the expected move. We shattered through it.

The Nasdaq breached 29,000 too, and that level has been big reactionary lows inside a really tight channel.

There aren’t a lot of places to run to. There aren’t a lot of places to hide.

The financials got smoked into the cash open. Google’s (GOOGL) getting absolutely smoked again. Turns out they suck. Like we didn’t know that. Microsoft (MSFT), back under 400. They definitely suck. Big hit to Meta (META) and Nvidia (NVDA). The energy sector is up, but that’s because we’re blowing crap up.

Everything of size this morning, and I do mean everything of size, pretty much to the downside.

Now look at Apple (AAPL).

Apple is completely unscathed. It was up a lot overnight, and I was ticked off about it, because I actually have the bearish position in here. Everything else on that screen is already down in excess of 3%, and clearly there’s an attempt to rotate into Apple.

That’s why it’s the most pivotal stock on the screen. If Apple falls, you’re piling on another $5 trillion of market cap on the sell side. The Nasdaq will be down well over 1,000, the S&Ps cave, and we see sell-side activity across the board, all stemming from if we sell Apple.

The balance of the market hangs on Apple only because Apple didn’t get exposed to AI and stood on the sidelines.

So we buy Apple because it’s Apple, and the value and their crappy business model don’t mean anything anymore. Hey, they’re always going to make money.

I don’t even care about the valuation. What’s sad is the biggest tech company pretty much in the world doesn’t even have its own AI. They do not have their own AI. They’re just using everybody else’s.

With all due respect, maybe that’s the better model. Maybe. Because all of a sudden you’re AI-agnostic.

The advance-decline line opened negative, which hasn’t happened in a while. It was 60/40, and it’s already back to 50/50, and that is not necessarily a good thing in today’s market.

Anytime you see a 50/50 advance-decline line, you’re like, whatever, they’re rotating. I agree; that’s exactly your thought. But what if they don’t? 

The rotations right now are pretty meager, and if the rotation dies, there are 50 other things to sell on the screen.

Do not be surprised to see wicked rips to the upside, like a real sawtooth pattern, as we actually descend a little bit. 

So when you’re looking at a bounce going, oh, we rallied back up; it’s all over, understand what you’re looking at. Volatility is still very much angry. The bonds are still in an angry position today as well.

Be mindful of your trading session.