Video Transcript

On Apple’s (NASDAQ:AAPL) chart, you can see that the Death Cross hasn’t occurred yet, but it is really, really, really close. I show you the 50-day moving average and the 200-day moving average; they’re both in the $597 range. The 50-day moving average is a $597.90, and the 200-day simple moving average is at $597.45.

Has the Death Cross actually happened yet? No. But that’s only a few pennies away from actually happening, so will it probably happen? It could.

The significance of why some technicians are paying a little bit more attention to this event than in the past is because if you go back to 2011, you can see that while a Death Cross was happening in August 2011 and September 2011 within the averages, there was no Death Cross ever in AAPL in 2011. The blue 50-day moving average line stayed above the red 200-day moving average line the entire time.

So, looking at AAPL, considering that it makes up 20% of the PowerShares NASDAQ ETF (NASDAQ:QQQ) and 5% of the S&P 500, it’s such a huge mega-cap that if a Death Cross was to occur in AAPL versus any other stock in the entire stock universe, it will possibly have more of an impact on the senior averages, like the NASDAQ, the QQQ, and the S&P 500 than last year when the Death Cross occurred on the daily charts of the senior averages, like the QQQ and the NASDAQ.

It wasn’t sustainable. It was a whip-sawing event because no such event ever took place on the biggest stock that makes up those senior averages. So I show you on the chart that if the Death Cross in AAPL does happen, it will be the first time that it’s happened in years.

InvestorPlace advisor John Lansing tracks the charts all day and offers expert technical analysis in his day trading, options and trading services: Power Trading at the Open, Parabolic Options and Trending123.  For more information on which service is for you click here.