Apple Benefits as Bitcoin, Speculative Stocks Fade
Money flowed into the mega-cap haven as crypto continues to falter.
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The dip buyers bought early weakness on Monday but ran out of steam later in the day. Underlying support was solid, but the price action wasn’t strong enough to attract more buyers or spark a bit of FOMO. It is a good sign that the low of the day was at the open, but the weak close suggests the risk of more selling pressure.
Strength in Apple (AAPL) and Nvidia (NVDA) helped offset weakness in the Russell 2000 (IWM) , which pulled back 1.1%. Underperformance by smaller stocks was responsible for poor breadth, which was 1,850 gainers to 3,500 decliners.
Some of the recent strength has been driven by increased confidence that the Fed will cut rates at its December 10 meeting, but weakness in bonds (TLT) and bitcoin (IBIT) hurt market sentiment. There isn’t much immediate news flow on the agenda, which is keeping some folks on the sidelines.
While it was a negative session on Monday, the good news is that we needed some profit taking after a five-day winning streak to shake out some of the short-term traders and allow charts to find some good support levels. The dip-buying interest is a good indication that support levels are close and there is an appetite for buying pullbacks.
The biggest negative currently is the continued pressure on the crypto sector. This is pushing traders away from more speculative stocks, and that hurts small-cap performance. There was a very short list of stocks trading up more than 10% on Monday, while the mega-caps like Apple saw some safe-haven buying.
The best move right now is patience while stocks search for good support levels.
Have a good evening. I’ll see you tomorrow.
At the time of publication, DePorre had no positions in any securities mentioned.
