What AAPL Says About the Market’s Future

|August 26, 2022

In tech-driven markets, Apple (AAPL) often serves as a good bellwether of where stocks will head next. And as I explain in today’s special market update, it’s telling us something crucial right now.

Investors concerned about short-term volatility should follow closely.

As you’ll see, there’s reason to believe this market hasn’t quite bottomed out. The good news is… Apple’s recent action suggests the end may be nearer than some folks think.

We’ll run through the key numbers and charts in today’s video.

Click on the image below to watch it.


Hello, Manward readers and GVI Investor research followers. I want to do something slightly different today. Instead of another Stock of the Week, I want to give you some market insight. The point of this is to give you something educational and informative. I’ve chosen a bellwether stock, Apple (AAPL), to look into. Let me just show you what I can see on my screen.

Now, this is obviously the share price of Apple. You can see it moving up and down. You can see from peak to trough it had moved down 24% in some two months. And since then, it has been climbing upwards. Now, I’ll come back to this in just a second. Where you see “B” here, that means that’s where an investment bank has given it a “Buy” rating. “H” means “Hold.” And you can see, according to the dates, when that’s happened. It’s neither here nor there.

More importantly, I want to show you the monthly MACD (moving average convergence divergence). It’s a measure of momentum. I’ll come back to that in a second. This is the weekly MACD, also a measure of momentum, but on a weekly chart. The chart you see here is monthly, where each one of these bars represents one month. This is the stochastic weekly, which tends to be a little bit faster-moving in response to momentum changes than the weekly MACD. And then this over here, this red and blue line, that’s the monthly stochastic, which tends to be a bit slower.

So what does this show me? Well, first and foremost, you can see the bottom of the market was picked up best by the weekly stochastic, because the weekly stochastic tends to be the most premature. But it can often give a lot of false positives. So I’d like to look at it alongside the monthly stochastic and, more importantly, the monthly MACD and the weekly MACD to see if they’re also flattening, if not already rising. And if they’re all moving in sync, it suggests a bottom.

But that’s behind us now. What about this move up here? And more importantly, have we peaked? Okay. And as I say, this is a bellwether. Apple might have bottomed before the rest of the market, and it might be a leader on the way down before the rest of the market. It might completely do something different, of course. But either way, it gives me some flavor and indication of how things might be going.

Now, what do I see? Well, we see the weekly stochastic falling off, and you see the price has fallen off. But that’s often, as I said, premature. The monthly stochastic is fairly flat. That doesn’t really tell me much. It could go either direction. The weekly MACD is still rising, but that tends to be a bit slower, and the price could fall while that still rises. I suspect this weekly stochastic will fall back a bit. This will flatten out.

And this… What tends to happen on the monthly MACD is it does tend to go sideways before falling. And then we have to decide whether it’ll rise. So I suspect we’ll continue getting a few more falls – maybe even as far back as this line that I’d drawn here, where I projected a 30% rise from the market bottom over a six-month period. And of course, it had moved a lot faster than that. So I suspect we’ll fall back to this.

My bottom line point with all of this is, with Apple being a bellwether of the market, it’s not causing market moves. But I suspect the rest of the market is going to do something similar. It’ll probably have a bit of a fallback. Okay? And then it’ll start rising. Sorry, earlier on I said each one of these represents a month. It doesn’t, it represents a week, each one of these bars. My apologies. Each one of these bars represents a week, not a month. Okay? So I think we’ll get a few weeks, maybe about another month, where we’ll go possibly down to this line before, well, we’ll make a decision then whether it’s going to resume upwards.

But what does this mean for you? Well, it means that it continues being a stock picker’s market. We’ll still need to pick individual stocks to see which ones are more likely to continue the upward trend than move lower and continue lower. And also, we’re not being so bullish and driven by momentum, because we think the momentum may fall over the next few weeks. Okay?

So that’s the bottom line interpretation of it all. To summarize once again… The monthly MACD, taking it from the top to bottom, the monthly MACD’s flat, so it doesn’t show me whether it’s bullish or bearish. But very often when it’s flat like this, it can move lower and often does. The weekly MACD is rising strongly, and that’s a bullish sign. However, the weekly stochastic is oversold now and starting to move lower. And the monthly stochastic… Well, it’s still fairly sideways. And rather like the monthly MACD, it could go either direction. I certainly think, led by the weekly stochastic, this will probably come down a little bit. Maybe it won’t quite hit this upward arrow I’ve shown. Maybe it’ll go down a couple of weeks before. Well, like I said, we’ll make a decision then, in a couple of weeks, whether it’s likely to continue upwards or might even go lower. I don’t need to make that decision right now.

What I do need to know is… this market isn’t one which is just soaring. It isn’t one that’s just going to keep rising. It isn’t one where we can just look at momentum alone. Nor, indeed, charts alone. We will look at companies based on their fundamentals, their earnings, their valuations, their revenue growth, their cash flow and those things to find the most resilient companies… which, should the market fall, shouldn’t hopefully fall so much… and, in any event, should resume upwards after that, over the long term. Apologies, I put “Add a footer” there. I always make that mistake. I always forget to add a footer over there. So apologies for that little mistake, I’m only human. But thank you very much. Hopefully you learned something. If you liked what you’ve seen and would like more of these little educational snippets, let me know, and I’ll be happy to do those. Thank you very much.