As enticing as it may be that the S&P 500 has fallen below the 1550 mark and maybe showing a little support here, don't buy it unless its for a quick trade.
AAPL is going up because it is way too cheap for the most successful company of this era. It is not a coincidence that AAPL's bottom has coincided with the markets finally starting to show some cracks in the armor. Back in September when AAPL topped, the outflows were being put into the biggest losers like FB, RIMM, & NFLX. Not to mention the inflows into GOOG.
The funds that were selling AAPL were looking for cheap stocks with limited downside. That same thesis rings true today, AAPL & BIDU are the two worst performing big cap tech names since last year. The one thing that these two companies have in common is that they both are major leading indicators of their respected economies.
I know that no one wants to here that AAPL's fall was just a precursor for the impending selloff in US Equities, but it has to be said. Obviously AAPL was way overdone to the downside, and in no way do I think that the markets will correct close to 40%, but it is indicative of anywhere from a 7%-18% Bull Market correction. This pull back is needed just as it was needed for AAPL & BIDU to wash out all the overly bullish sentiment.
This is the way the markets have worked since their inception, and only a fool would think that it is going to ever change.
The S&P 500 will most likely try and bounce a little here, but I would continue to keep selling positions, selling calls, buying puts, and even outright shorting. A healthy market needs to back and fill, that's what allows it to continue to the upside. A parabolic market is a recipe for an outright crash, which leads to a dramatic drop in investor(consumer) confidence. That in turn leads to driving economies into recession.
Keep your eyes open for the signs of the major breakdown, because when it starts going its going to selloff real sharp and hard. Be prepared for the impending decline by welcoming it. Don't try to be a hero, we have all learned the hard way at one time or more that all it does it set you back a long way.
The markets are telling us that they are getting tired and in need of a correction, head the warnings. They will tell us again when they are bottoming and it is time to reverse course.
Good Luck to all, and keep asking yourself. How many people do I know that make money when the market sells off and corrects? I'll bet the answer is not too many at all!!
Additional disclosure: I am long VIX calls and short the market.