In technical analysis terms, [‘breaking below the uptrend’] means that the S&P 500 companies’ stock prices were making successive new highs, but are failing to do so now
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Chicago, IL; Houston, TX; Los Angeles-Long Beach, CA; New York, NY; Washington, DC (PRWEB) November 05, 2012
In a recent Profit Confidential article, lead contributor and financial expert Michael Lombardi reports that while Apple was trending higher all year round, it recently broke below the uptrend. Lombardi points out that Apple’s stock has more weight on the S&P 500 than the material, telecom services, or utilities sectors. According to Lombardi, Apple is just one of the many the S&P 500 companies that are breaking below their uptrends, suggesting that the S&P 500 is standing on the edge of a cliff.
“In technical analysis terms, [‘breaking below the uptrend’] means that the S&P 500 companies’ stock prices were making successive new highs, but are failing to do so now,” explains Lombardi. “… The S&P 500 companies that are breaking below their uptrend can potentially drag the whole index lower.”
Lombardi notes that there are five companies that have a combined weight of more than 10% on the entire S&P 500 index. (Source: Standard & Poor’s, last accessed October 18, 2012.) According to Lombardi, all five companies recently broke below their respective uptrends—Apple, Google, Coca-Cola, Wells Fargo & Co., and Microsoft.
In the article “S&P 500 Standing on the Edge of a Cliff?,” Lombardi reports that of this 10%, Apple carries a little more than 4.5% on the S&P 500 (source: Standard & Poor’s); this means that Apple can be a good barometer of the overall trend of the S&P 500, as Apple’s stock has more weight on the S&P 500 than the material, telecom services, or utilities sectors (source: Standard & Poor’s).
Lombardi believes that this earnings season has been one of the worst in a long time.
“The S&P 500 looks to be stumbling. Economic conditions, earnings growth, revenue growth, and future expectations are not impressive. Sadly, things were looking better in mid-2009 than they are today,” concludes Lombardi.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.