According to Vanda Research, retail investors have been clinging to Apple and Tesla even as the overall market is in a deep hole. If those stocks fall, it could signal that day traders have abandoned the market – and that a bottom is near. Investors have focused on buying these two tech stocks, providing them with massive cashflow since the resumption of the 2022 sell-off in mid-August, said Marco Iachini, senior vice president at Vanda. These two stocks alone make up about 34% of the total number of shares held by the average retail investor, he said. Iachini said these stocks have outperformed the benchmark despite the market frenzy, likely due to concerns about Tesla shorting and Apple’s position as a household name. . One of two significant declines, he said, would worsen an already dismal 2022, likely to the point of these investors giving up. Iachini mentions an acronym used to describe investor profit and loss statements: “A positioning push in these two stocks could be the charm for retail investors’ PnL. “Investors should keep a close eye on price action from Apple and Tesla, as these two stocks could be the last foundation of hope for the retail community.” That drop may not be far off. Shares of Apple fell on Wednesday after Bloomberg reported that the company was backing away from plans to increase production of new iPhones. That may be enough to scare some already nervous investors, Iachini says. He said Korean retail investors, who account for about 2% of Apple’s retail shares, selling off the news could mean forced liquidation. That could affect foreign holdings.. Why retail investing is important A new index from Vanda that measures retail investment, i.e., market abandonment action, shows Sentiment and tough money data continue to slide. The index is closing at levels that would mark a stock market bottom, Iachini said, but retail investors helped slow the decline. Intraday trading data showed that retail investors, who have taken a larger share of the market since the pandemic began, “have been buying aggressively” on Monday and Tuesday. “This suggests that the outflow of retail investors has played an important role in supporting the sell-off in equities, in our view,” he said. People see equity as a contrarian indicator, Iachini said, meaning it tells investors when to do the opposite of sentiment. In this case, a speculation could signal a prime time to buy lows for investors. But some have warned against betting on contrarian indices for the moment, noting that there is a gap caused by the pandemic between what people are saying about the market and how they actually invest. .