It’s a given that Apple is going to dive Tuesday, but what does that mean for the broader market?
In his evening note, Mike O’Rourke of BTIG calls this the market’s first “test” after an exceptionally strong start.
In a market placing a high degree of focus upon individual stocks, this represents the first test of 2011’s rising risk appetite. The shoot first mentality is standard in the financial markets. In conjunction with the crisis over the past few years, investors have quickly moved that money to the safety of the sidelines instead of rotating it into different exposures. We will be watching to see if Apple becomes a source of funds, and whether those funds will be put on the sidelines or redistributed throughout the sector.
Meanwhile, this comes as technical-minded folk are getting unnerved by the strength of this rally. That’s the subject of a WSJ piece this evening, part of which focuses on this chart of the Dow Jones Industrial Average having gone an unusually long time without a close below its 10-day moving average.
We’ll know more soon.
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