| Market Insights in Two Minutes – In a late April edition of “Two the Point” we asked the same question. Our conclusion was, “We do not believe that investor sentiment is sufficiently negative to indicate a near-term low in stocks.” Since that time, the S&P 500 has declined another 11%. In bear markets, it is often the “best” stocks that crack last. To achieve full market capitulation, we must see the stocks in which investors have found relative safety break down. Apple was one of the final holdouts. As the chart shows, the stock was holding its upward sloping trendline since the fall of 2020 – the likes of Microsoft, Amazon, and Facebook could not say the same. Although painful for many, we believe this breakdown in Apple is a necessary evil. Even the mighty must fall in bear markets. Apple falling isn’t enough to call a market bottom, but it is certainly a necessary condition of one, in our view. We can now check that off the list. |
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