Market Topping?

In my post January 2014, The Great Unwinding Starting in 2014, I called out mounting evidence that the global economic ponzi scheme was starting to crack in 2014.   Since then, the market has made valiant attempts to re-establish a sustained bull market, but has failed to materialize.

We had Ben Bernanke leave the Federal Reserve, replaced by Janet Yeltsin.  I think Ben knew the top was potentially near, and wanted to exist on a high note.  I am not a Ben hater, I just don't think any one person can fix the global economic system, and his attempts where I believe in good faith given the many constraints of the current model.  But if I was to believe his actual words, he is naive to think buying time by relaxing laws and policies will 'teach' people to be economically responsible.
World Ward 2 is best example how appeasement doesn't lead to better results.  Germany now is also a lesson on how LACK of appeasement does not lead to better results.

Before I go on, credit where credit is due, Gary of the Smart Money Tracker posted market topping as a possible scenario right now.  I believed the market has been topping for the last few weeks if not since January.   But that is a feeling, and I relied on Gary to give a harder signal to trigger this post.

When in doubt, I try to go to the MACRO view of the markets.  In my post about long term investing, how to spot a market top, we have NOT yet had a signal this has occurred.  So if you want to wait for the signal, please do!  Read my post When to buy stocks or get out of the market . I encourage everyone to review their holdings and pick hard stops.

Below is a picture of the current market valuation, and I recommend watching this video making a case of peak everything.

Assuming there is a near term top in the market now, the USD valuation should rise.  Latest USD chart of valuation below. Right now there is no indication USD will rise, but it isn't failing yet compared to recent years. (TheChartStore.com)

US 30 year interest rates, this is the most damning for markets.  The US government knows that interest rates for 30 year bonds MUST stay in the range below, or a crisis could trigger.  To force rates lower, we need a 'flight to safety' for investments, that is usually triggered by stock market valuation problems.  See my post on The Hard Road MUST be Taken on the global currency battle stakes.

Assuming safety is the play, I have to imagine gold is going to get hurt, and buying bonds is good now.  If the USD valuation breaks down, or interest rates break up then this assumption is likely wrong.  This is one of those periods in time, I see risk everywhere.  If the market falls, so should gold and gold miners.  HOWEVER, GDX is about to show it is entering into a bull market!  So I am torn.  I did lighten up GDX and GDXJ this past week and keep an eye out for what happens next.

Back to market topping.  A market usually tops with high fliers cracking first.  Here is a bunch of charts, while most have not shown a convincing top using 20-50 weekly SMA, many look toppish.

Apple stock, a buy?

If you like Apple, today is a very good day to buy their stock, chart wise.  It should open at 459 a share.  This will place the stock just on the very long trend line I showed a week ago.
If the stock closes on or below 450 today or in the future, sell.  Otherwise the long trend support may hold, and what does not go down will go up.

Apple

Back on Feb 16th, 2012, I posted "Apple chart and the Market".
Apple has just started its parabolic rise.  At that time, when Apple was worth $520 a share that consider putting in stops or taking some profits.

My timing was off, but the sentiment was true then and true now.  The stock went parabolic and became the worlds most valuable company in human history in August 20th, 2012 post at 664 a share.  Apple was worth more than Merck, Intel, Anheuser-Busch, Toyota, and Verizon combined within days after that post.

Looking back, that was clearly when the bell was rung , that Apple was near its all time high.  Apple may break that high, but I seriously doubt in the next 4 years ahead (if ever).

Here we sit, with Apple at 486 a share.  From a technical perspective, one can argue it is merely a correction for the stock to revisit new highs in the year ahead.  Perhaps.

But if Apple stock hits 450 a share and CLOSES the market at 450 or lower, to me, Apple is a broken stock.
The stock will have shattered it's uptrend in place since February 2009, 4 years later.  That should give anyone pause for thought.
As a techie, I don't like Apple's future, and I haven't since Google announced Android OS.
Apple to me is the IBM/Microsoft of phones, and Google the IBM PC clone/Linux competitor.  The innovation in Android can't be outdone by soo many companies against 1.    Hardware will continue to be commoditized  and the consumer won't see a difference in apple that is material than android.
And that is EXACTLY what Google wants! Commodity hardware but their software to enable Google services.

And I for one do believe, Steve Jobs cannot be replaced.  Apple faltered when they kicked him out, and they will falter again now that he is gone.  He was that good.

With that said, I have 3 iphones, 2 ipads, another iphone used as itouch, and a MacBook.
My father and nephews have iphone/itouches.  And I still recommend iphone to anyone non-technical.
But for the power user, the Google Nexus 4 is closing the gap.  There are not many gaps left, actually.  That is a setup for the year ahead for Android to outshine Apple, and that, will not be good for the stock.  Apple as a tech company could announce tech and surprise on the upside, to me that isn't as likely as when Jobs was running the show.

Further, the iphone form factor is NOT THE END GAME!  Next up is Google Glass, then something else, then brain control.  So unless Apple can lead in every new device in the years ahead, it will be a commodity player.

Combined with the news that Apple slashed orders, well, you get the gist.  If you own Apple stock, put a stop in.  Not for all shares, say, 25%, and repeat this pattern to ensure some profits are locked in.

If you held all the way to the top, don't hold all the way to the bottom, that isn't stock, that's a family member.

Trend line below since 2009.
EDITED 10:37 pm
Friend sent me this link on Apple options.  It indicates that the near term bottom of this downswing won't turn around until on/after January 18th.  So if the stock can stop the slide, and you actually want  more Apple stock, the 18th may be a good time.  I still remain pessimistic of Apple hitting 700 a share given reasons above.

Most Valuable Company in History

Congrats to Apple corporation and to Apple stock holders.  Today Apple has become the most valuable corporation in history.  As of Monday morning the 20th, Apple Market cap was 621 billion dollars, with each share reaching 664.65 per share.

The total net worth of Merck, Intel, Anheuser-Busch, Toyota, and Verizon combined is about equal to  Apple.

For a sharp contrast, about two months of US government spending is equal to Apple's valuation.

Steve Jobs and Life

I don't believe I even mentioned on this blog the passing of Steve Jobs.
As an IT guy, but not an Apple-ite, Jobs has been a presence in my life, indirectly affecting my daily work.
He is a rare item, a true leader in every sense of the world.

A true leader does NOT mean perfect, nice, or even civil.  It means as a man he can lead others to move heaven and earth, shaping the future out of nothingness.

I read a post on Slope of Hope about Steve Jobs.  It read to me as an honest assessment of Jobs and the impact on all of us.  I am one of those who does not like to mix god-talk with topics.  So ignoring the god references, and the statement Jobs was the best business man ever, the rant reads true.

An entertaining read from Slope of hope,

Steven Paul Jobs and the Meaning of Life

Update: Thanks to bob to a nifty site recanting the experiences of working at Apple as an engineer in the early days, web site called Folklore.org