Apple Keeps the Market Juiced

 | Mar 19, 2012 | 8:45 AM EDT  | Comments
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The products suck! There's no sex in them anymore! --Steve Jobs, July 1997

Market players continue to focus mainly on what could trigger a market reversal. There hasn't been any major bad news in a while, and the sell-the-news reactions to good news haven't worked at all. In fact, dips have been opportunities to rush in and buy more.

We kick off the week with a big announcement from Apple (AAPL) about what it intends to do with its nearly $100 billion in cash. Pundits are ready to declare this a sell-the-news setup that will give us the first meaningful market reversal of the year.

That is possible, but predictions of this sort have been consistently wrong. Even if we do see weakness, it doesn't last long, as the dip buyers and underinvested bulls jump in aggressively.

For weeks there have been plenty of good reasons why this market should reverse. Common sense tells us that it has to happen sooner or later, and it is very appealing to be the genius who times it just right. Unfortunately, all the geniuses trying to time things perfectly are sitting on losses and end up pushing the market higher when they are squeezed out of their positions.

My approach is to do my best to ignore the market timers who are predicting the turn and keep on walking the high wire. Although many stocks are extended and charts are not setup well, there are still good long trades to be had. You might want to hold them for the longer term, but there is money out there looking for a place to go and that keeps things moving.

Much of the money looking for a place to go ends up going into AAPL, which makes it a great battlefield. The bears think the stock has become too frothy and moved too far, too fast, but every day it has a target increase from an analyst and the hot money piles in because it is such a great trading vehicle. Anyone who expects AAPL to put in a major reversal and fall apart obviously is clueless about how much the hot money, momentum traders love this stock. It is going to take much more than good news and an extended chart to kill it.

AAPL is doing a good job of boosting the futures, which were looking a bit anemic in the early going. We'll see how things shape up once this AAPL news is out, but the bears have their work cut out for them and I expect the market to remain sticky to the upside.

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