Why Apple Is “Dead Money”… At Best

The charts usually tell the story much better than words or opinions based on emotions. And what does the Apple chart tell us? It is heading down…seriously.

Apple is the benchmark for some of the popular stock indices. Because it is the highest capitalization stock in the indices, it carries the greatest weight. Therefore, when the stock can no longer be supported because of big selling pressure, it is bearish for the stock market.

The chart below shows a long sideways pattern since February 2015. That support has now been broken.

Will The Apple Watch Flop?

The Apple Watch, formerly known as the “iWatch,” made its debut last week. TV reporters were at Apple stores hoping to report on the assumed big crowds. But there weren’t any. It was a strange “launch” because people couldn’t get the watch, just place an order online.

What to do when there is no crowd? Interview the CEO, Tim Cook. He was all excited about the congratulatory phone calls he received from around the world. He didn’t say how many watches he sold on those calls.

Fox Business news reported this:

Does The World Really Need An Apple Watch?

The Apple Watch was released on March 9. A Wall Street Journal article said several weeks ago that Apple may have ordered 5-6 million Apple watches to be manufactured in Taiwan. Analysts believe that 10 million units, or at the most 20 million units, may be sold the first year.

For Apple AAPL, that would be a drop in the bucket. If you assume an average price of $400, that would be $4 billion in sales, or just 2.2% of Apple’s total sales last year.

Here is what I see:

Apple: Icon, Icahn or iGone?

The Christmas holiday season will probably help produce an excellent quarter for Apple. After all, it is a technology icon. But it may be their last great quarter for a long time. Shareholders should note that when enthusiasm is highest, and everyone is in, it’s usually a good time to look for the exits. Rather than looking at what is now, investors should ask, “what’s for an encore?” The markets look ahead.

Remember, market tops are made when everything looks best, not when they are bad.