Apple is a bellwether of the Nasdaq and a high beta one at that. High beta means, high risk or to be more accurate more volatile than the market. If a stock is correlated it will jiggle in the same direction as the market.

Market Run
Apple is correlated and high beta so that when the market went off a cliff in September so did Apple, only more so. Now the rally is on Apple has dashed back and has just pushed passed the index’s performance since the ‘beginning of the end’ in the late days of August 2008. The market seems set to run up for months yet, so as long as nothing awful happens, Apple will go along for the ride.

Apple back at $200? Momentum-based speculators wouldn’t bet against the general direction and nor would I, certainly the mid-160s look a strong bet.

The credit crunch is over and the world economy is liable to boom indiscriminately because of the vast oceans of cash pumped into the system by governments all over the world. This will lead to inflation. This is good news for the makers of must have sexy consumer goods. In a couple of years when high inflation creates a sharp tightening of liquidity through higher interest rates, the bad times will roll again, but that’s too far in the future for most investors to care. In the meantime, barring disaster, Apple will likely ride high with the market.