The Stock Market’s Puppet Master

Dear Member,

I’ve been saying this for a while… the 18,000 level on the Dow has been a real headache for investors. Despite going over that level nearly every month, it’s struggled to end a month above it.

This month, it all came to a head as the pressures from China and all those consistent fears of U.S. growth came to a boil.

And there’s a puppeteer behind it.

Before the big reveal, let’s revisit a topic I’ve discussed a couple of times here this year: the stocks moving the market.

In a previous issue of The Oxford Insight, I outlined the market drivers in 2015.

It’s no surprise that Apple (Nasdaq: AAPL) is an important company – perhaps the most important company.

It’s the largest component of the S&P 500, the Nasdaq and the Dow. So far, Apple has enjoyed a great year, gaining 20% through July. Its pure size – combined with the momentum from healthcare and biotechs – offset the downward pressures from the energy and flailing large cap tech sectors.

This is the table I shared last month…

Apple alone pulled up the combined weight of the biggest three losers, Exxon Mobil (NYSE: XOM), Chevron (NYSE: CVX) and Intel (Nasdaq: INTC).

But the tables have turned…

Check out the components that have been having the greatest negative impact on the market over the last month…

Exxon, Chevron and Procter & Gamble (NYSE: PG) are still weighing on the broader market…

But the real concern is twofold.

First and foremost, Apple is currently the biggest drag on the S&P 500. It alone pulled the index down nearly 6.5% over the past month.

Then there’s pressure from Walt Disney (NYSE: DIS), JPMorgan Chase (NYSE: JPM) and Facebook (Nasdaq: FB) – all of which were the biggest positive influences during the previous seven months.

On August 11, investors worried as the Dow Jones Industrial Average experienced a “death cross.” This is a bearish flag as the 50-day moving average falls below the 200-day moving average.

A week later, the Dow imploded.

On Tuesday, Apple experienced its own “death cross.” And the S&P is just about to experience its own, with just three points separating the two levels.

That means the market’s future is at the mercy of a puppeteer… Apple.

The positive side to this is we are heading into the company’s biggest two quarters of the year. But the near term is going to be dictated by how traders react to Apple’s technicals.

Good investing,

Matthew

News@TheOC

Cashing In: We know… it seems like there’s little hope in the energy sector right now. But thinking like that is a huge mistake. Earlier this week in The Oxford Club’s newest free e-letter, Energy & Resources Digest, Matthew revealed how investors can still make money in the energy sector. Right now, one of the best ways to play the sector is a booming segment in technology that has enamored everyone from military leaders to average citizens… To read the article and find out how you can cash in, click here.

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