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How to Protect your Wealth by Investing in AI Tech Stocks

Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower

Stock-Markets / Stock Market 2022 May 12, 2022 - 03:03 PM GMT

By: Nadeem_Walayat

Stock-Markets

The earnings bloodbath materialised, that started on Tuesday with Google trading down to $2265, and ended on Friday with Amazon plunging down to a new low of $2425. With the two 'cheap' stocks Qualcom and Facebook rallying strongly post earnings. Virtually everything went according to the script of my last article i.e. "we could see Amazon trade to well under $2500, probably into the $2450 to $2300 support zone". The only odd one out was Apple that refused to budge much from $160, where my expectations remain is headed to below $142.


Stocks Bear Market Current State

My big picture remains as I have been iterating for the past 3 months in that I expect the Dow to target a volatile trend to below 31k.

5th Feb 2022 - We are in for a volatile trend with a downwards bias for much of 2022, as I wrote to expect on the 5th of Dec 2021 accompanied by revised trend forecast graph.

Following which my expectations were for the Dow to target a trend to $31k as illustrated below -

The Dow closed at 32977, the bull market peak was 37k, which currently puts the Dow at -10.8%. The target for the low is 31,000 to 29,000 for a 16.2% to 21.6% peak to trough bear market. So the Dow currently stands at 6% to 14% above it's final low where my expectations are for the final low to be nearer to 29k than 31k and that is the INDEX risk of accumulating stocks at a Dow deviation of 10.8% from it's high i.e. for an index draw down of 6% to 14% from it's current price. The only thing that is not clear is WHEN the Dow will bottom.

In terms of immediate price action then the Dow has done nothing to suggest that the trend I forecast last last week to Dow 32k is not going to soon become manifest i.e. that the Dow is targeting a trend to 32k. for a new bear market low.

In the meantime I am obviously seeking far greater deviations than that for the Dow to accumulate select AI tech stocks at as and when opportunities arise as the stealth bear market cycles through individual stocks just as we witnessed last week.

Note: The information provided in this article is solely to enable you to make your own investment decisions and does not constitute a personal investment recommendation or personalised advice.

AI stocks Portfolio

I continue to get the buying job done by catching the falling knifes through a string of small buys. Breakdown of my exposure stands at AI stocks 39% (36.7%), High risk 26.1% (25.1%), with portfolio cash falling to 35% (38.2%). The largest increase in exposure during the week was in Amazon from 28% to 39% and Google up from 42% to 47%. Remember folks all this is being done without the benefit of hindsight. Whilst the EGF indicator has started to FLASH a RECESSION WARNING as it turns negative on virtually every reporting stock except Qualcom, thus proving a useful indicator, especially take note of Amazons -68% reading which instantly warns the stock the price is nowhere a bottom even after last weeks drop to $2485.

In terms of my long standing buying levels then Amazon finally fulfilled it's level of $2600 which has been in force since November 2021 when the stock price was trading at $3600. I am sure at the time $2600 seemed like an impossible pipe dream but here we are 6 months later job done! And to think there were many fools at the time promoting Amazon as a buy at $3700, so it's no wonder most who remained invested in Amazon on the basis of poop analysis where on Friday were probably weeping at $2485 closing price.

I may be wrong but it appears to me that ALL stocks are ALWAYS a BUY with Motley Fool! A case of the always blue sky's ahead to maximise sales and marketing of services and so as to get the investing lemmings onboard.

Now only long standing buying levels for Apple, Broadcom and IBM remain pending, hence why I have no new exposure to any of these stocks whilst IBM exposure dates back several years.

Big Image - https://www.marketoracle.co.uk/images/2022/Apr/AI-tech-stocks-table-29-4-22-BIG.jpg

And here's the pie chart breakdown of my holdings in response to last weeks buying.

High risk stocks portfolio (8th April).

I continue to accumulate into NEW High Risk stocks each time I see them trade to new lows..

Big Image - https://www.marketoracle.co.uk/images/2022/Apr/NW-High-Risk-Stocks-APR-8-BIG.jpg

The primary focus of this article is on the four major tech stocks that reported earnings last week that could drive the S&P sharply lower.

The rest of this analysis that warns of the Apple and Microsoft Nuts are about to crack to send the stock market sharply lower. Why APPLE Could CRASH the Stock Market! Was first made available to patrons who support my work.So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.

Whilst my most recent in-depth analysis is - UK House Prices Three Trend Forecast 2022 to 2025, where I pealed away every layer of the UK housing market I could think of to arrive at a high probability of trend forecast, no following of the consensus herd here!

UK House Prices Trend Forecast 2022 to 2025

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UK Housing Market Affordability
UK House Prices Real Terms Sustainable Trend
UK House Prices Relative to GDP Growth
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UK House Prices 2022 to 2025 Trend Forecast Conclusion
Peering into the Mists of TIme
Risks to the Forecasts
US House Prices Trend Forecast 2022-2024

So if you want immediate access to a high probability trend forecast of UK house prices, with US and global housing markets analysis to follow soon then do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.

Latest analysis include -

My Main Analysis Schedule

  • UK House Prices Trend Forecast - Complete
  • US House Prices Trend Forecast - 70%
  • Global Housing / Investing Markets - 60%
  • US Dollar / British Pound Trend Forecasts - 0%
  • Stock Market Trend forecast into End 2022 - 0%
  • High Risk Stocks Update - Health / Biotech Focus - 0%
  • How to Get Rich - 85%
  • Gold and Silver Analysis - 0%
  • State of the Crypto Markets

Again for immediate access to all my work do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.

And ensure you are subscribed to my ALWAYS FREE newsletter for my next in-depth analysis.

Your analyst BUYING the panic selling falling knives.

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2022 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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