Apple’s Stock Just Made a Move it Hasn’t Made Since the Dotcom Bubble Burst

Dear Reader,

The signs in this volatile economy continue to bubble up (pun intended). In fact, Apple’s stock just did something it hasn’t done in 20 failed attempts, since the Dotcom bubble burst, and that’s a sign of things to come.

The technology giant’s stock rose by 1.2% Tuesday to post a sixth straight gain. That is the longest win streak since the 6-day stretch ending April 23, which followed a 9-day win streak through April 8. What’s truly telling, however, is that all 6 of those daily gains were over 1%. The last time the stock rose by at least 1% for 6 straight days was the 7-day run that ended August 29, 2000. 

A winning streak is good, right? Maybe, but in this case, Apple’s price remains rather low. The price is still more than 8.0% below its most recent peak of $211.75, reached on May 3, and 16.1% below its October 3 record close of $232.07.

If we attempt to learn from history, a lofty goal, Apple investors shouldn’t exactly be jumping for joy. A move such as this predicated the Dotcom bubble burst that thrashed the markets. About one month after Apple’s August 2000 streak, on September 29, 2000, the stock suffered its biggest-ever one-day plunge, dropping 52%. This helped fuel the tech wreck and the bursting of the Dotcom bubble.

Since we are currently experiencing a bubble in everything, this could be the warning sign for the greater economy. If nothing else, it’s at least something of note that all of us should watch. The good news is that things may not be as bad as some had feared.

I know it’s confusing, but Apple’s stock is often an indicator of both the good and the bad, and very often the ugly. Another thing that pressured Apple shares in May, as well as the broader stock market, was the Dow Jones Industrial Average, of which Apple is a component, shedding 6.7% in the month. It spurred growing concerns that the economy was slowing. But Federal Reserve Chairman Jerome Powell’s comment in a speech last week that the Fed would “act as appropriate to sustain the expansion” seemed to confirm the market’s expectation that the Fed was ready to cut interest rates.

Keep in mind that a cut in rates should not be an excuse to ramp up your liabilities. The Fed making borrowing money easier doesn’t mean it’s the right thing to do, although it’s tempting.

The best advice I have is to watch the markets and the broader economy. Take note of the little things that often go unnoticed. Then make your decisions based on logic and have a well-thought-out plan. IF this move by Apple’s stock does predict a bubble bursting, be ready. Have your finances in order so your personal wealth won’t be demolished along with the stock market.

This next economic downturn could be a doozy!

Best Regards,

James Davis
FutureMoneyTrends.com

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