In this weekend's 344th edition of Turning Points we have a 12 page note detailing the classic wall of worry that is allowing this market to remain buoyant in the face of countless concerns; we discuss the numerous breakouts above key resistance that have taken place in mega-cap tech following Q1 earnings; highlighting the strongest sectors in the market along with the best way to participate; adding a new crypto related position to the portfolios that is on the verge of a significant breakout.
The abundance of reasons to be bearish is one of the key factors that is keeping the markets so well intact, allowing for opportunities on the long side to take place. These bearish factors are also what is creating the tailwind in precious metals and crypto during 2023 as investors are seeking any kind of safety net to cushion the fall in case of the above described Armageddon scenario.
While we dance around the chemical fire that has become the current economy, megacap tech companies are becoming more powerful than world governments as they continue to print money unabated.
As discussed in recent editions of Turning Points, AAPL's price action was telling us that an earnings disappointment was a low probability scenario.
We see now why AAPL was resting above resistance going into earning s with very little overall downside volatility. Earnings were better than expected, creating a nice move above resistance targeting new all-time highs over the intermediate term.
Everything about the earnings move was perfect. From the way it moved above resistance, finally confirming that the move above trajectory was real. All the way to to volume, which wasn't overly euphoric or “blowoffish” in nature.
AAPL's price action post earnings isn't delivering an overly- bullish message at all. What it is delivering is a message that downside is relatively non-existent unless some sort of black swan appears. In the current market structure, AAPL will slowly grind up providing resilience for the overall tech market.
Here we have MSFT in what could be a preview of what AAPL will do a week after earnings. MSFT reported a week before AAPL. Since then it was simply held its gap and continued along on moderate volume, accelerating up and away from resistance that now becomes support.
In last weekend's edition of Turning Points I discussed a 315-320 price target over the short-term for MSFT. It looks like we will get there this week.
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