How You Like Them Apples: If AAPL breaks so does the Nasdaq

by Dan August 4, 2011 2:18 pm • Commentary

Both the Nasdaq Comp and the SPX are down about 9% from last month’s highs, but the SPX lags down about 2.75% ytd vs the Nasdaq only down 1.64%  Chart below shows this relative performance but more interestingly shows how the SPX has meaningfully broken through key support and the March lows as the Nasdaq is holding…….

1 yr Nasdaq vs the SPX from Bloomberg


I can’t help but think this has to do with AAPL, which makes up 9% of the whole index of 2600 stocks.  AAPL which is up 19% ytd is only down 5% from the all time high made last week.  When AAPL finally gives up, so goes the Nasdaq.   Be careful in AAPL here, it is the most crowded trade on the planet, except of course for Gold (and even that is down today).  In this environment AAPL could see a quick swoosh lower if a few large players head for the door at the same time.

A 5% sell off back to the $360 area would not only be healthy to shake out some weak hands but could very likely be in the cards in the coming days, especially if employment data blows tomorrow morn.

1 Yr AAPL chart from Bloomberg