Will ‘Logic’ Tank Cirrus Logic?

Will ‘Logic’ Tank Cirrus Logic?

It would be nice if markets worked that way – but that is not always the case.

While I will not claim to be an expert in fundamental analysis – I do read a fair amount of research reports on stocks that I am tracking.

That said, it is hard to not see how CRUS (Cirrus Logic) won’t trade lower in the days/weeks to come.

CRUS is a supplier to AAPL.  Yesterday’s AAPL news was notable according to Fred Hickey.

The chart of CRUS is clearly bearish.

CRUS

The only question remaining is The Fed.

Will their decision on Thursday bring out the perma-bulls or will markets react to the current overall bearish trend in the S&P’s?

The wild card is sentiment:

Short interest in US Equity Index Futures is right now at an all-time record high, with data going back to 1986

Normally this suggests that a move higher would be the next logical outcome. When everyone is leaning one way; the market goes the other way.

This makes taking bearish stances very tough.  Your timing needs to be impeccable and you normally cannot hold on for big moves given the BTFD mentality out there.

However, I think the one thing that many are overlooking right now is that the environment we are in now is very different from past periods.

No, this is the not the same as saying it is different this time – which is normally a bullish justification. Rather, this is a simple fact that we are awash in liquidity/free money and this has distorted how investors/traders view the market.

At some point, this week perhaps, reality will set in and the market will come under pressure.

Be ready; while also tempering your desire to get on board.

Dave

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