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Stocks Lose Half Of Last Week's Gains With AAPL Back Under $600 Billion Market Cap

Tyler Durden's picture





 

With bond-traders amiss - no doubt all celebrating the indigenous people of our great nation - volumes were dismal and so was any evidence of a BTFD mentality in risk. AAPL, amid the biggest three-day slide in almost six-months, saw pullbacks to VWAP sold immediately (signaling more institutional biased selling) ending very close to a 10% correction from its highs. This weighed on Tech (obviously) which was the worst performing sector and dragged Nasdaq (and the S&P) lower. In general equities stayed in sync with risk-assets on the day (we note that TLT's move implies around a 4-5bps compression in yields at the long-end of the Treasury curve) though the lack of liquidity made the relationships noisy. Low volumes, low range, a premature ramp in the last hour that gathered no momentum left S&P futures having retraced 50% of their low-to-high swing of last week. Gold and Oil decoupled early then recoupled late, ending the day down but outperforming the implied weakness from USD strength (EUR weakness balanced JPY and AUD strength on the day). Copper and Silver ended the day down 1.4%. VIX 'outperformed' equity weakness and pushed a notable 0.8 vols higher back over 15%.

 

S&P futures have retraced half of the linear up-trend gains from last week now - though today's volume provides little confirmation... ES volume around 40% below average...

 

FX markets were relatively dispersed today with Cable (GBPUSD) weakest (along with the EUR) while AUD and JPY outperformed... USD ended 0.37% stronger...

 

The dispersion in FX was also evident in the last few days volatility in FX carry pairs relative to stocks (where it seems the FX markets have been the lever - because AAPL is broken - to move stocks higher)...EURJPY vs ES...

 

Oil was partnered with Gold early, flip-flopped down to play with Silver for much of the European day, then recovered to play with Gold for the rest of the day... Oil and Gold ended the day down 0.25% (still better than USD-implied weakness)...

 

With Treasuries closed, TLT suggested 10Y yields fell around 4-5bps...

 

across asset-classes (that were open), risk was generally highly correlated - though the 'jigglyness' (which is a technical term only a PhD could comprehend) was rather notable - as we suspect the algos were dominating and notable to find a trend to grab on to... Confirming the algo-based view of today is the fact that average trade size was its lowest in almost five months...

 

AAPL is struggling (as we noted earlier) - but notably intraday - we are seeing something we haven't really seen in the last few months... VWAP being faded (i.e. institutional sell orders...) amid the biggest three-day drop in almost six-months.

 

Charts: Bloomberg and Capital Context

 

Bonus Chart: The 'Gundlach' Trade is handsomely back in the money - with NatGas up 19.6% while AAPl is only up 9.3% since inception...

 

Bonus Bonus Chart: Many have noted the rally in the Dow Transports - and used it as evidence that all is well and those silly-billy Dow Theorists had it all wrong all along. However, two things are noteworthy:

1) The Dow Transports remains massively underperforming... and non-confirmatory... and we have seen this pattern before - earlier in the year..

 

2) The recent rally looks more like a pairs trade to us! Since QEternity, The Dow Transports and Russell 2000 have diverged notably and then converged today! We suspect this means an end to the 'technical' buying pressure for the Trannies...


 


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Mon, 10/08/2012 - 16:26 | Link to Comment fuu
fuu's picture

Was that the dip?

Mon, 10/08/2012 - 16:37 | Link to Comment Xibalba
Xibalba's picture

I wonder, if AAPL were UP by 2%...would the SPY be up by the same fraction of a % ?  

Mon, 10/08/2012 - 16:29 | Link to Comment Dr Paul Krugman
Dr Paul Krugman's picture

I am sure the mutual funds I own aapl in are doing fine.

Mon, 10/08/2012 - 16:36 | Link to Comment orangegeek
orangegeek's picture

The NASDAQ100 is diverging from the SP500 and DJIA - in other words, the 'Q' is falling faster.

 

http://bullandbearmash.com/chart/nasdaq-100-daily-october-05-2012/

 

This could be the beginning of the turn down for markets - long overdue.

Mon, 10/08/2012 - 17:14 | Link to Comment Cdad
Cdad's picture

The DOW algo lifting games seem to be over.  I would be targeting your favorite DOW stock for short sales now.  Mine is Disney...and soon enough Exon, too.

Mon, 10/08/2012 - 17:08 | Link to Comment slaughterer
slaughterer's picture

The only asset I worry about more than AAPL is silver this week.  (Downarrow time) 

Mon, 10/08/2012 - 17:12 | Link to Comment fuu
fuu's picture

I hope you're right and it crashes to $1/oz.

Tue, 10/09/2012 - 06:24 | Link to Comment lakecity55
lakecity55's picture

Dude, you could go on a buying spree then!

But, it would probably be too hard to find any @ 1$/ozt.

I have some of those new antelope canadians on the way, and some kookaburros (sic).

I woud like to find some of the canadian bears, but my usual supplier is out.

Somebody suggested Gainesville Coins, but I have a cheaper supplier.

Mon, 10/08/2012 - 18:02 | Link to Comment ebworthen
ebworthen's picture

The Robot Algo's are moving in and out of sectors and individual stocks.

Stretch it out a little in human time and it looks like waves, roller coasters, convergence and divergence.

They are hitting the short, medium, and long term ups and downs by being in front of everything and everyone of every time frame and dimension.

FED is feeding them some fine clean stable 220v, everyone else on batteries and brown 120v.

Who owns the robots?  Those who own the FED.

Mon, 10/08/2012 - 18:37 | Link to Comment q99x2
q99x2's picture

F AAPL and their middle men. Boycott them until they build their product(2) in the US. The world doesn't need more Chinese junk.

Mon, 10/08/2012 - 19:02 | Link to Comment Grill Boss
Grill Boss's picture

http://bcfreedom.wordpress.com/2012/09/24/death-lies-and-mutations-what-...

So Jobs died of cancer, and ZERO insurers will cover telecoms for this... all over the world there is backlash against this... the giant awakes

Mon, 10/08/2012 - 19:05 | Link to Comment malikai
malikai's picture

S&P was negative all day over here:

http://blog.quantsig.net/2012/10/08/sp-500-2/

WTI looks pretty interesting again:

http://blog.quantsig.net/2012/10/08/wti-5/

 

Mon, 10/08/2012 - 19:51 | Link to Comment chump666
chump666's picture

HFTs were all over this as most were sidelined awaiting Alcoa and China (shanghai index and USD bids). Oil is bid as Iran and Israel are dying to blow each other up.  Iran denies drone, blames Israel on the cyberwar front, hacking into oil refineries etc.  A paranoid nation against a Islamic nut-case nation backed into a corner = War is my Sheppard   http://youtu.be/PKs1ctp91FI

Volatility will hit like a freight train

 

Mon, 10/08/2012 - 21:53 | Link to Comment chump666
chump666's picture

looks like asia just layed a bulltrap, bad bet this lot will boost stocks on open.  PBOC just pumped some cash into their banks.

that is bearish. something is up

Mon, 10/08/2012 - 21:56 | Link to Comment Go Tribe
Go Tribe's picture

Pull up 20-year charts of Apple and Microsoft. Verrrry interesting.

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