Posted on 03/04/2013 1:45:57 PM PST by blam
STOCKS HIT NEW BULL MARKET HIGHS AS APPLE PLUNGE CONTINUES: Here's What You Need To Know
Sam Ro
March 4, 2013
Stocks continue to march toward their all-time highs. And they're doing it without the help of Apple.
First the scoreboard:
Dow: 14,127, +38.1 pts, +0.2 percent
S&P 500: 1,525, +7.0 pts, +0.4 percent
NASDAQ: 3,182, +12.2 pts, +0.3 percent
And now the top stories:
* It was a quiet day in the markets and the economy. This is the first full week with the federal budget cuts known as sequestration ripple across the economy. Yet, the markets continued to grind higher.
* This rally comes amid some jitters in China where China's Shanghai composite tumbled and property stocks got crushed. The big news was that China announced new measures to contain a heated property market that many people worry has evolved into a bubble. Coincidentally, 60 Minutes ran a feature on Sunday night highlighting China's notorious ghost towns, which many consider to be hard evidence of a bubble.
* Meanwhile, shares of Apple, the most heavily weighted stock in the S&P 500, tanked. Notably, it fell below $425, which was the bearish price target of fund manager Jeff Gundlach. "AAPL over the last six months offers a textbook case study in market behavior and effectively debunks efficient market theories," said Gundlach in an email to Business Insider. "The weakness is all the more remarkable because it has occurred within the context of a strong overall US stock market. SPX up 5% since September 19, 2012 and AAPL down 40%."
* Once again, stocks are just points away from their all-time highs. The Dow closed at its all-time high of 14,164 on October 9, 2007, the same day the S&P closed at its all-time high of 1,565.
(Excerpt) Read more at businessinsider.com ...
What fundamental change has stocks moving higher?
Fundamentally speaking, the hype.
My theory is that the stock market is up because FED has been printing dollars and pouring them in the top of the economic engine. The only place the dollars can go is into the sump which is the stock market.
This is why printing money does nothing to stimulate the economy: fake dollars are just turning into fake stock valuations.
Fake dollars are also driving up food, fuel, and housing prices. Not just stocks.
In a word? Continued pessimism. The oldest, truest maxim of Wall St. is: "The market climbs a wall of worry". Which is why it took in February 2009 and never looked back.
Markets like the sequester. Taming down spending rate increase a bit is better than keep spending at steeply higher rates year after year on borrowed money.
Also Bernanke is pumping $85 Billion every month into the government treasury. (printing money).
The price don't match the performance for a lot of these stocks, starting to remind me of the dotcom thingy.
Truest and oldest maxims.
As GM goes, so does the economy.
As Apple goes, so does the economy.
And the next new normal, as the FED goes, so does the economy.
Cuts are now much more a part of the discussion in general.
Apple’s been overly priced for a long time. It should be back where it was in the mid-late 90’s in another year.
Goog will also crash, maybe not as hard, but it will.
Cash is a position...
When the foundational positions that are steady earners fall, people begin to chase cash. This and people feeling like the run is ending and wanting to get out causes rapid short runs up and down.
Winners need to be ridden, not chased. When the horse is bucking, find a calm one.
Another good indication of when the market is going to be intentionally tanked is a widening spread, even in the face of increased volume. Shows you the market is harvesting the volume by manipulation. When the power that be are manually steering the ship, be sure they are taking you to the rocks.
That I believe.
Money gotta go somewheres.
There is a lot of capital sitting on the sidelines with nowhere else to go.
This is why printing money does nothing to stimulate the economy: fake dollars are just turning into fake stock valuations.
That's pretty much the way I see it too.
Okay; I believe we have excessively printed money chasing something, in this case stocks.
Something had to inflate; whether groceries, gasoline, housing, bonds, stocks, or what have you. :-)
So what happens next? Accelerating “wealth effects” and inflation?
Because I don’t see the profit, production and productivity increases that would accompany a value-driven stock price surge.
what happens when everyone in the world
who wants an smartphone, ,,has one?
what does Apple do next?
remember, Apple’s gig is,
sell something for 600 bucks, that a
clone version of something similar,
sells for 45.
how long can they keep doing that?
I keep thinking the same thing.
And you’re close. I got a smart phone for 80 bucks and it does a lot of the same things an iphone does. I truly do not understand it.
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