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Market Leader Apple Looks Lost Again

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The leader again is looking lost. If you're wondering why stocks are drifting lower, look no further than Apple : as soon as it broke below $595, about 12:45am ET, volume picked up and the overall market drifted lower.

While many want to blame the decline on concerns about a drop in iPhone sales at Verizon, the fact is Apple has seen heavy volume (north of 30 million shares) for the past 5 days, and topped out just before BTIG analyst Walter Piecyk downgraded the stock two weekends ago.

Good, but not good enough...again. Stocks dropped immediately at 10am ET as March Existing Home Sales, at 4.48 million, came in below expectations, at the lowest level since December. Sequentially (February to March), sales declined 2.6 percent, but are only up 5.2 percent above the 4.26 million-unit pace in March 2011. These are closings, not contracts, and we know almost 30 percent of sales are falling through due to difficulties obtaining financing and appraisal issues.

So with economic news choppy (weekly jobless claims have also spiked up in the last 2 weeks), earnings beating but only modestly, we have a problem: the S&P is only 3.6 percent from its recent 4-year high in the beginning of April.

It can easily be argued that the S&P is fully valued (14x forward earnings) with this kind of choppy economic data.

Think the markets are slow now? If this data keeps up, we could be at 1,300 on the S&P all summer long. And that’s without a European crisis.

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