07.22 AAPL and GS Bellwether Update: 200 DMA too Much to Handle

by John Galt
July 24, 2016 16:30 ET

UNICORN_RAINBOWS

The market again continued to roll to new all time highs but don’t listen to me, the crazy people have officially taken over the asylum. No volume, no conviction, and the world is going nuts.

Think about this; the last time we saw market moves like this happened in 2007, 2008, and shockingly 2015. There could be a signal from the action in the bellwethers this week or not however. The markets are sending numerous warning signs about liquidity, especially in the credit markets just like 2007-2008 but the financial media and even some respectable technicians are dismissing this as “temporary” as the Fed will make sure nothing bad can happen.

With that in mind, I feel better?

Apple (AAPL) made a nice lunge upwards to try to break above the 200 day moving average (DMA) and failed. This is indicative of either a bull move tiring out, or a failed bounce within a long term down trend for a bear market in this stock:

072216_AAPL_1YR_jgfla

To make matters worse, the other bellwether, Goldman Sachs (GS) is also lost momentum and rolling over in a manner reminiscent of the post August 2007 Federal Reserve gift:

072216_GS_1YR_jgfla

With month end window dressing this week and the Democrat convention, anything can and probably will happen but if both stocks continue their downward momentum into the end of the month, odds are August could get interesting at the least.

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