The Death of the 'Apple Index?'

 | Dec 10, 2012 | 7:00 AM EST
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In an effort to do some holiday shopping this past weekend, I ventured into the local Best Buy (BBY) store for the first time in quite a while. While the place was quite cavernous and lacking in shoppers, the most crowded spot was the "tablet" section -- and I, too, went over to compare and contrast.

The first observation I can offer here is that no one was around the Apple display. The Samsung table, however, had several folks milling around and "playing," with a few scattered folks eyeing the rest of the brands. Perhaps one reason for this is that, by now, most folks have probably already tried an iPad or an iPhone -- or maybe they'll just go to an Apple store instead.

In any case, I remember that, when I bought my own Apple (AAPL) iPad a few years back, there were two to choose from -- an Apple and a Samsung -- and the learning curve on a Samsung seemed too steep for me (keep in mind I am technologically disadvantaged). That was not the case this time around, and I was impressed that the Samsung Galaxy has several features lacking in my iPad -- but even more impressive was that Best Buy was offering Samsung's "mini" for $50 less than the iPad mini.

But wait -- you can't have it. They are sold out, and Best Buy will not let the store reorder any more. That's helpful, isn't it? I walked away wondering if the Galaxy would sell out if or when its price reaches that of the iPad. In other words, have tablets become rather generic now? Does price now matter more than brand?

That must also lead us to wonder if Apple is losing its status as a market leader. Consider the plunge Apple shares have taken in the past week, which the S&P 500 closed flat. Perhaps it has just become an ordinary stock; perhaps the Apple Index is no more.

The Apple chart does have that giant head-and-shoulders top in place -- yes, the one everyone sees. I am convinced even the average guy on the street would see it. The big test for the stock will be in the next few weeks, to see if it breaks that neckline. If it does, will the rest of the market hold up or go with it?

Apple (AAPL)

In my view, Apple is still working off its overbought condition; last week it managed to go sideways and digest that reading. While everyone else is concerned with Apple, I will note that if the small-caps cannot return to a period of outperformance, that should be more concerning for the market than what one stock named Apple does.

S&P 500 vs. Russell 2000


Overbought/Oversold Oscillator -- NYSE  Overbought/Oversold Oscillator -- Nasdaq

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