Scale Matters:

We frequently mention the importance of some of the largest names in the market, as their performance dictates not only the PRICE action of the major indexes, but investor psychology. Below is a chart of the conduct over the last 100 days of MSFT, AAPL and the S&P 500. One can see AAPL has more than doubled the gain of the SPX, while MSFT has tripled it. Softee REPORTS earnings Thursday and AAPL later this month. With the latter, readers know we are proponents of the round number theory and AAPL has now recorded 10 consecutive CLOSES above 200. Immediately prior to that the 9 days between 6/18-28 all either traded above it intraday or came very close with ZERO finishes above the round figure. That level continues not only to be a line in the sand for the individual stock, but that of the Nasdaq as it represents more than 6% of the benchmark.

Leaders Wobble But Some Do Not Fall Down:

Former leaders turn into laggards from time to time. It is always refreshing to see fresh names take their place as some do not adjust. Some just need a prudent pause. This chart below of ANET, may be a good example, is looking for its first five week winning streak now since late 2017. For those who think this has made a nice move already it still trades 16% off most recent 52 week highs and it did register a huge from from the rough 100 number to the 300 figure between January ’17-mid’18. The right side of a cup base is taking form, and it looks like it wants a gap fill to the upside sometime this year from the 5/2 session.

Examples:

Social media platforms have been doing just fine recently. FB is on a 5 week winning streak that has jumped 17%, and the last SIX all CLOSED at the top of their weekly ranges. SNAP has tripled since late last December lows, and PINS has formed a symmetrical triangle pattern. Another example is the chart below of TWTR and how it appeared in our 7/11 Technology note. We are coming into earnings season and this name reports on 7/26 before the open, but is carving out a nice cup base after a near precise gap fill. It is quickly approaching a 41.02 cup base pivot, and this name should at the very least continue to garner plenty of attention coming into the presidential election next year.

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