Keeping Cool and Taking it in Stride

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In the midst of another mild drift lower, Apple suddenly saw what was, for all intents and purposes, a “flash crash,” as the stock sank nearly 10% in a matter of seconds. The stock was abruptly halted, and then reopened a few moments later back up near the highs of the sessions, as though nothing had happened. Overall, the broad market seems to have shrugged the whole thing off as a trivial nuisance.

It is easy to get spooked by something like that, especially in a stock like AAPL. However, recall that the May 2010 Flash Crash occurred as the market was entering a deep correction after topping for several weeks with heavy selling volume. In the current market, there has been little indication that we are entering some type of deep correction, or bear market, via a violent topping process. Thus, the psychology and character of the market is different now than it was back then. So, I would be surprised if the Apple action was some type of bearish omen.

Apart from Apple, we have a light version of “buy the dip” happening. There does not seem to be a good deal of energy in buying up stocks here, but the main issue is stemming the tide of the past few days of moving lower. I am starting to see some of the energy names come to life, which is certainly a positive sign. The bulls will want to build on that, as they do need an eventual rotation, if only for a respite, away from some of the extended cyclicals and down towards the industrial/material/energy complex.