Apple Weakness Is Hiding Market's Broader Strength
Also, here's my list of favorite long names right now.
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Weakness in Apple AAPL is covering up broader market strength. Breadth is running better than two-to-one positive, and there are almost 900 new 12-month highs, but there is a report from analyst Ming-Chi Kuo that pre-orders for iPhone 16 are running about 12.7% lower over last year. That is causing some pressure on the names of the semiconductors and the corresponding exchange-traded fund for the group SMH and the "Magnificent Seven" tech stocks.
Financials and small-caps — and the Russell 2000 fund IWM — are showing some relative strength as bonds rise in anticipation of the Fed rate cuts. Interest rate-sensitive stocks are reflecting a half-point cut.
I’m focused primarily on managing positions right now and have made a few sales on Monday morning. The action isn’t bad, but I don’t see a lot of potential upside in front of the Fed news.
One name I reduced is Nvidia NVDA, which enjoyed a good bounce last week but is running into overhead around the 50-day simple moving average at about $117. I’ll look to add back shares on a deeper pullback or after some consolidation.
I also sold down some Palantir Technologies PLTR, which is becoming very expensive and extended. It has strong momentum working for it, but I think there will be better entry points down the road.
This is a market environment for positioning rather than accumulation. I want to reduce some risk in front of the Fed but keep core positions in stocks, which I feel will outperform in better market conditions. I’ll update my shopping list later this week.
My favorite long names right now are Core Scientific CORZ, Xeris XERS, US Cannabis ETF MSOS, and ClearPoint Neuro CLPT, but I am not making any big moves until after the Fed news on Wednesday.
At the time of publication, DePorre was long NVDA, PLTR, CORZ, XERS, MSOS and CLPT.
