Apple Inc.’s (NASDAQ:AAPL) Stock Is Entering A Euphoric “Bubble” Stage; A Bad Sign For The Markets?
Toby Connor: The last bull ended when the leading stock, Google (NASDAQ:GOOG), entered a parabolic “bubble” phase. That was the signal that the bull had reached the euphoria stage. When the Google bubble popped it signaled the end of the bull market.
Two stocks, Apple Inc. (NASDAQ:AAPL) and Priceline (NASDAQ:PCLN), have been the leaders of this bull market. Both have entered the euphoric “bubble” stage. When the Apple and Priceline parabolas break it will almost certainly signal the end of this bull market. [Related: How To Earn A 9.25% Gain In 30 Days While Waiting For Apple’s Dividend]
Apple is now stretched 49% above the 200 day moving average. Anything between 50 and 60% above the mean is extreme dangerous territory.
As I pointed out in my last article, the dollar (NYSEARCA:UUP) is beginning its second daily cycle up in what could very well be a cyclical bull market. This should correspond with the stock market topping and the next leg down in the secular bear market. [Related: 7 Reasons Apple’s Stock Could Be The Short Of A Lifetime]
My best guess is that we will see a sharp sell off over the next 2 to 3 weeks, followed by a sharp rebound (QE3?) that may, or may not, move stocks (NYSEARCA:SPY) to marginal new highs, similar to the 2007 top.
The poor employment report on Friday is the first warning shot across the bow that the economy is slowing in preparation for moving down into the next recession/depression. [Apple Tag: Check out some great Apple articles here.]
Ben Bernanke is in the same position he was in 2007. Printing more money won’t stop the collapse. It will only continue to spike the price of energy and exacerbate the decline.
Toby Connor is the author of Gold Scents, a financial blog with a special emphasis on the gold secular bull market. Mr. Connor’s analysis skill of the markets is largely self-taught, though he admits to being an avid reader of Richard Russell and Jim Rogers, among several others.