Yahoo Finance’s Jared Blikre joins Asking for a Trend to break down Tuesday’s market trends.
Apple (AAPL) has reached a new all-time high, rising about 7% intraday. Blikre notes that the probability of this movement being a false breakout is an unlikely high-risk scenario.
Stock volume in the overall market has recently plummeted. Although volume is currently less than average, Blikre believes that it will normalize through the summer.
Finally, bitcoin (BTC-USD) and ethereum (ETH-USD) are having their worst day in five weeks, which he also expects to normalize over the coming months.
For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.
This post was written by Melanie Riehl
Video Transcript
And the S and P 500 NASDAQ closing at a new high as Apple Ss to a record here with more on the Trading day takeaways.
Let’s get right to Yahoo.
Finance’s Jared Blicker.
Jared.
Thank you, Josh.
Guess what?
I’m gonna call this a comeback because Apple has been going nowhere for years.
You can see it’s up 7% today, best day in several years.
This is what it looks like today.
I’m gonna show you the last two years and you’re gonna see what I mean by this breakout.
Uh We were just going nowhere uh for quite a long time here and this is only recently, uh we can see over the last five years, which includes all the pandemic.
In fact, there’s been a lot of sideways action here.
So we got to new nominal highs, but now we’re finally breaking out what’s interesting about this.
And uh by the way, let me just show you our takeaways board, uh nicely prepared for us.
This is Apple breaking out to a new new all time high, but I did a study and so I took a signal day like today.
So if you have apple gaining 3% and breaking to a new high.
I’ve calculated this happened 15 times over the last 20 years and we’re only allowing one signal per quarter.
What’s important is what happens afterwards.
So one day later, up, 4/10 of a percent, only four times out of 10 is a positive.
But you start looking at one week, one month quarter, a year later, all the way up to 88%.
These are really good statistics even for a stock that is mostly going up because there are long periods of time where it has this breakout and it finally goes to the upside.
What’s the risk here for this?
Because we’re looking at average gains of about 30% over the next year.
This is the V going look at that in a second here.
But what I want to show you is that Apple chart once again.
So we’re looking at five years here.
What’s the risk is that this is a false breakout and we head right back down over the coming days and then we head down some more.
But that’s the low, that’s the Iris scenario, but it is low probability.
That’s not what I think will happen.
And so for the market, Jared, bigger takeaways when you know, a name like Apple starts working again like this.
Yeah.
So for the longest time, we’ve been talking about this NVIDIA story, which is the A I story.
Apple has kind of been left out and you can see this on the year to date totals.
Even Apple is basically break even to start the day for the entire year.
NVIDIA up 144%.
NVIDIA has been getting all the action.
NVIDIA might be a little tired here.
So it would be only fitting if another big stock could carry the A I banner for a while.
Uh Apple perennially a leader for the stock market overall over the last 10 years.
So it’s probably comfortable for a lot of people just to see it leading again.
Uh I take this as a big positive for the market.
All right, Jared Blu point number two.
Yes, we are looking at complacency in the market.
So let me advance here.
We got Apple breaking out to an all time high but stock volume plummeting recently.
Let me give you some statistics.
So I look at uh spy volume spy is the uh I is the S and P 500 spider ETF that is kind of a proxy for the market overall.
I have been seeing the lowest volume in in spy recently in years and sometimes what happens in the summer is all right.
May June roll around, you see volume kind of flag a little bit, but this is extreme.
I I don’t want to say extreme, but I wanna say more than average.
So we’re seeing less volume than average.
What this reminds me of is that a few summers ago in 2022 when we had that big bear market?
Everybody was kind of scared.
Uh, we did see stocks for a little bit.
They managed to rise.
And so there was kind of this feeling in the market that everything is ok.
But I think, you know that old saying, hedge in May or excuse me, sell in May and go away, should be changed to hedge in May and go away.
And I think that’s simply what we’re seeing here.
Finally, I just found my chart.
Here’s 2022 here’s that summer rally that I was looking at.
And I think simply, uh market participants are, are just really not that active this summer.
I think they put their positions on their hedges and they’ve kind of walked away for a little 3rd, 3rd 1, Jerry.
We’ll get to this real quickly.
This has to do with Bitcoin and Bitcoin and Ether just having their worst day in five weeks.
So I’m gonna go to the charts real quick.
I showed the, uh Bitcoin Board, the Ether board at the close today and you can see once I load them here, uh, just give me two seconds and there we go.
Uh You can see a lot of dark red on the screen.
Here’s Bitcoin.
What I’ve been pointing out year to date is that we are in a trading range.
So this might be the worst day that we’ve had in a few weeks, maybe in about a month or so.
But until we break out of this range to the upside to the downside, this doesn’t mean a whole lot.
And you take a look at Ether.
It’s a pretty similar chart.
There you go.
Just a little bit bigger trading rate very quickly.
Does this tell me something about risk appetite heading into the federal, you know, a good question.
Um, Bitcoin has been correlated over the last few years.
You know, with risk, risk appetite heading into the meeting.
I don’t know because you look at copper, that was kind of a risk appetite thing that made a new high.
Then it sunk to a new low.
You take it, you put that in conjunction, the commodities market with the crypto market, maybe risk is a little bit tired right now and you, you kind of put that, uh, with my prior thesis at the mar the market might be on autopilot through the end of the summer and this kind of plays into it.
So I’m not expecting a huge shake up tomorrow at the fed meeting, but maybe things skew a little bit more risky than, uh, than bubbly.
All right, we’ll wait and see, Jared.
Thank you, my friend.
Appreciate.
