9/7 Recap

Apple got more bad news out of China overnight and was down almost 5% at one point but bounced back, still, it dragged markets down with it today. When the biggest component in the market goes from $190 to $174 in 2 sessions, it is going to weigh on the market and spook people. The reality is we’ve known the CCP is capable of these things for years. We all saw what they did to their own tech sector and their crown jewel Alibaba. The stock is down 75% off its highs because of their government. Apple having their products banned for use by certain people there is going to have a material effect. Apple was already dealing with negative YOY revenue and this now makes matters worse. Think about this, Apple is still nearly 30x forward earnings. Those are multiples typically reserved for companies growing nicely, Apple was not before today, and now who knows, but imagine if Apple gets the market multiple many high quality no growth names get, that means it is cut in half. Then what? In 2014 Apple wasn’t growing and it was under 10x earnings……..

With that said, tomorrow should be a big day with regards to the trendline on the SPY below, we just can’t seem to move away from. Every week we get so close to closing below it and we always get saved, will tomorrow be more of the same? For the moment we’re below the 8 ema and look very week, even with the bounce today. Even look at a megacap like META with no perceived China risk, it sold off 5% intraday. To say markets are weak right now is an understatement, every move up is met with selling.

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