Tuesday, October 9, 2012

Are Apple--and the Stock Market--Topping Out (Cont.)?

Stock prices are weak again this morning.  It's remarkable that Apple stock, which has led the stock market for the past three years, continues to decline.  It is now down 6% over the last week.  

Company news doesn't necessarily cause movement in a stock, but first the problem with Apple's new mapping application on its iPhone and then a strike by workers at its primary Chinese manufacturing facility could explain the recent decline in the share price.  Or the stock--and the market overall--just might in the early stages of a meaningful decline.

The early stage of a market decline is typically met by the comment by market observers that it is a healthy "correction" after prices had risen too much in a short time.  When the decline persists, however, it is dubbed a "bear market" (after the meaningful decline has already occurred).

Whether there is a more meaningful decline in Apple--and the stock market as a whole--ahead, I stand by my position that one should try to be patient in holding cash until better valuations are available for the market as a whole.  There are (as usual) specific exceptions to this, such as VOD or MOFG, but I like cash here.

Steve Lehman

S & P 500:  1445

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