Apple may have to slide a lot further before the market sell-off stops, trader says

Investors looking for an end to the ferocious selling of 2022 should watch Apple, which may have to tumble a good deal further yet before a market bottom is put in, according to trader Danielle Shay. The tech bellwether already is down 20% this year after a 5% drop Wednesday sent the stock into a technical bear market. But Shay, the vice president of options at Simpler Trading, said she’s looking for more damage as a sign that investors have given up. “What I’ve seen is regular and consistent selling,” Shay told CNBC’s Kelly Evans during an interview on “The Exchange.” “What’s most important is that it really hasn’t hit the core stocks like Microsoft and Apple in the way that it’s hit others like Teladoc . So I really don’t think that we can capitulate until we see Apple down, I hate to say it, you know 20, even 30 percent.” “People will hold on as long as Apple can remain strong, because there’s hope,” she added. “But when Apple really starts to break, that is when I believe we will see capitulation.” Shay said she doesn’t think the Federal Reserve will ride in to save the market as it has done in the past. Fed officials have been clear in recent days that they plan to continue raising rates and shedding assets until inflation is brought closer in line to the central bank’s 2% inflation target, after running at an 8.3% annual rate in April. “The Fed has pretty much said they have no interest in saving the market at this point in time. Investors are accustomed to the Fed coming in and saving us with the Fed put and I just don’t think it’s going to happen this time,” Shay said. “So my question is, at what point will they save us? I don’t know that it’s going to happen.”