Sometimes, a few minutes just isn’t enough to relay the magnitude of the subject matter. Such is the case with Monday’s CNBC interview when I found myself on the other side of a healthy technical debate. To set the stage, allow me to take you behind the scenes of how this television and media stuff works. As you probably have seen lately, I’ve had the privilege of appearing on quite a few television and radio programs. I’m like a kid in a candy store with this stuff. As a finance geek, there aren’t too many stages greater than Bloomberg on which I’ve had the privilege of becoming a regular. Of course, CNBC, on which I’ve been participating for several years now, is a finance staple. The increased media attention is in direct correlation to the accuracy of our calls. It certainly helps when you have a hot hand, and don’t think for a second they won’t forget about me the moment my opinion may be off – even if it is just delayed. I’ve been around this game long enough to know that it’s definitely “easy come, easy go” in the media business.
A broadcast always starts very early that morning when the producer requests your notes. These consist of simple things you may be looking at, ideas you have, etc. My notes, of late, have been very simple and straightforward. ‘Until further notice I do not believe we’re falling into the abyss. This correction, which we have anticipated and been patiently waiting for is the opportunity to buy, not sell. Financials are offering opportunities as is anything tied to inflation.’ That’s it, those are my thoughts in a nutshell. Just like any request, I sent these thoughts and was asked to come on the air to discuss them.
As you’ll notice in the clip, the script was just fine until my co-guest started in on 18-million technical indicators pointing to a market top. At this point, it gets interesting.
You see, few folks know that I had the unique privilege of training and trading with James ‘RevShark’ DePorre, one of the Street’s most notable technical traders. Rev has more technical street cred than anyone I know, and under his tutelage I spent 2 years trading technical patterns in everything from equities to futures. In fact, at the end of that tenure I was asked by Prentice Hall to write a book about technical trading (which can be found HERE). As a side note, I’m still not too pleased with the way it turned out but it was a good exercise, nonetheless; and one worth repeating sometime in the future.
The point is that I’m guessing not a single producer listening in on the conversation thought I’d have a single thing to say after the other guest discussed his technical readings. Thankfully, they were wrong.
You see, what everyone seemed to be missing is that, on occasion, the market is, in fact, led by a single stock or small group of stocks which can be used as a barometer to gauge the general health of the market. Apple is just that indicator.
At nearly a trillion dollars in market cap, Apple commands the greatest weight in the S&P; and, within the tech sector specifically. It is now the behemoth that will tip the scales of the prevailing market, and it will be very hard for the index to move with, or without, this leading stock. That is precisely why keeping a close eye on the recent Buffett induced breakout is so critical. If this breakout were to fail and the stock fall back within the multi-month range, I would become very suspicious of the recent rally in stocks. If, however, the break holds, I believe it to be a clear signal that other stocks will, in fact, follow.
One of the greatest lessons I learned from Rev is not to over complicate things. Sometimes, there is a clear canary one must follow and respect, and, at present, that canary is clearly Apple.
It was fun to break out the technical tool bag which many did not even know I had experience with. When you’re around the markets as long as I have been, it pays to understand all the tricks of the trade, even if you don’t put them into practice on a daily basis.
Disclosure: At the time of this article select clients and employees of Joule Financial hold positions in Apple