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Size Doesn't Matter As AAPL's New 8-Incher Underwhelms And Bipolar Market Resumes

Tyler Durden's picture


Yesterday's late-day rampapalooza seemed like just the confidence-inspiring rally that was needed to enable sellers out at better prices. The absolute schizophrenia (debate-day shenanigans?) remains remarkable - and today the silver-lining appears to be the Dow Transports - which end green. But as always context is key - the rest of the US equity market is converging down to the Trannies measly 0.8% YTD gain in a hurry. Stocks and broad risk-assets were once again highly correlated as systemic weakness dragged an exuberant overnight equity market back down to reality. Today's higher-beta weakness was widespread but AAPL's crashtastic 3.25% plunge on an underwhelming sales and over-expensive product seems as good a catalyst as any (and if anyone on TV tells you its all the shorts driving it - just think about the dominance of this stock in all those long-only manager's books that are now underperforming - long sales at VWAP!!!). USD strength dragged commodities lower - Oil underperforming, Gold outperforming (though lower); Treasury yields cracked lower (down 6-7bps from high to low); and credit modestly underperformed as VIX also rose more than implied by stocks as protection was bid. The S&P has lost the Bernanke Floor and thanks to some late VWAP support is holding at Draghi's Dike.


Today marked the biggest 3-day slump in the S&P 500 in 3 months - on huge volume once again - making a mockery of yesterday's late-day ramp...notice once again the pull up to VWAP today (blue line) which was faded into the close...


Year-to-Date US equity index performance...


leaving the S&P at Draghi's Dike - having lost Bernanke's Bottom...


And once again - its clear that the machines are under pressure to get the big longs out (not just short-sellers) as VWAP points are magnets for volume...


Broadly speaking - stocks over-reacted overnight and overshot to the downside (relative to risk assets in general) - catching back up into the close (which was around ES VWAP - suggesting some balance)... systemic correlation was high though



For a sense of what market participants have been levered to in a risk-on world - that appears to be falling apart - its is useful to see what is underperforming... to wit: on a correlated beta basis (i.e compared to how its moved in the past) - Oil is being sold hardest, followed by stocks, with Gold and the USD in line, and Treasury buying the least aggressive (perhaps as MTG spread unwinds continue)...


Today's VIX move is a little exuberant as protection is heavily bid - well north of Draghi-Dike levels...


But with all the talk of VIX breaking out - we note that in fact the implied vol premium to short-term realized vol (at 10-week highs) is in fact at its lowest in a month - the key now is if the crazy swings of the last few days continue then we see the crowd of vol premium sellers finally get their fingers snapped off in front of the steam roller...


MTG spreads are +7bps post QEtc. and retail mortgage rates are only -3bps! Thanks Ben!


Charts: Bloomberg and Capital Context


Bonus Chart: Netflix Tilson'd...-14% afterhours...


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Tue, 10/23/2012 - 16:13 | 2913828 Abraxas
Abraxas's picture

Toto, I have a feeling we’re not in Kansas anymore.

Tue, 10/23/2012 - 16:15 | 2913844 CPL
CPL's picture

NFLX shat the bed AH.



FB's turn now.

Tue, 10/23/2012 - 16:20 | 2913861 nope-1004
nope-1004's picture

New AAPL release?  Is it as good as this one?

Tue, 10/23/2012 - 16:25 | 2913881 Sweet Chicken
Sweet Chicken's picture

HAHA funny shit right there!

Tue, 10/23/2012 - 16:32 | 2913907 Dalago
Dalago's picture

Its too thin.  They're all about girth.

Tue, 10/23/2012 - 16:35 | 2913913 JPM Hater001
JPM Hater001's picture

Release the hopium ballon.  Float market float!!!!!

Tue, 10/23/2012 - 16:35 | 2913914 centerline
centerline's picture

+1. That was awesome. Still laughing.

Tue, 10/23/2012 - 17:35 | 2914097 Spastica Rex
Spastica Rex's picture

The Onion is really the only meaningful news show left.

Tue, 10/23/2012 - 16:37 | 2913923 malikai
malikai's picture

" see if anyone can figure out this fucking time vampire"


Tue, 10/23/2012 - 16:42 | 2913949 BLOTTO
BLOTTO's picture

Theirs that damn fruit again.


Apple - the fall of man...


AAPL - the fall of mankind.

Tue, 10/23/2012 - 16:41 | 2913938 ebworthen
ebworthen's picture

Bought my Daughter a Sony music player last year; she doesn't like it.

If you put it in sleep mode and bump any button it turns back on - so whenever she goes to use it the battery is almost dead.  Waste of $79.

This is my favorite, the Apple Mac Wheel laptop:

With Steve Jobs gone it won't belong before Apple makes something like this, or another Newton or Lisa.

Tue, 10/23/2012 - 16:46 | 2913957 catacl1sm
catacl1sm's picture

You owe me a new keyboard.

Tue, 10/23/2012 - 18:11 | 2914186 A82EBA
A82EBA's picture

that was Great thanks!

Tue, 10/23/2012 - 16:37 | 2913905 ACP
ACP's picture

8-inchers, trannies and spikes and dikes?

What is this a dungeon??

"Yes, mistress, may I have another?!?"

Update: I guess you want another, if you're an NFLX owner...

Tue, 10/23/2012 - 16:14 | 2913837 Yen Cross
Yen Cross's picture

I wonder if that thing comes in "flesh pink"?

Tue, 10/23/2012 - 16:15 | 2913838 LongSoupLine
LongSoupLine's picture

maybe AAPL should merge with Pfizer...

Tue, 10/23/2012 - 16:37 | 2913924 machineh
machineh's picture

Swipe the red iPill ...

Tue, 10/23/2012 - 16:16 | 2913840 azzhatter
azzhatter's picture

you had to know sooner or later Apple would release a shit sandwich nobody wanted.

Tue, 10/23/2012 - 16:17 | 2913845 NidStyles
NidStyles's picture

I'm still trying to figure out who wanted all of the previous ones.

Tue, 10/23/2012 - 16:18 | 2913851 I am a Man I am...
I am a Man I am Forty's picture

They showed it to the public an hour ago, I think it is a little early to tell if anyone wants it.

Tue, 10/23/2012 - 16:25 | 2913876 insanelysane
insanelysane's picture

The Apple diehards know instantly.  They just got their iPhoney 5s and they don't see the use of this mini-max thing.

Tue, 10/23/2012 - 16:34 | 2913910 I am a Man I am...
I am a Man I am Forty's picture

It's a good transportable size, much easier to read than the phone.  People like this size or they wouldn't have made it, this size was a big seller for Samsung and Kindle.

Tue, 10/23/2012 - 16:41 | 2913937 centerline
centerline's picture

Your seriously long AAPL, aren't you?

Tue, 10/23/2012 - 16:42 | 2913948 I am a Man I am...
I am a Man I am Forty's picture

Yes, I've made 7 figures plus on apple.

Tue, 10/23/2012 - 16:56 | 2913987 ParkAveFlasher
ParkAveFlasher's picture

Yeah me too.

And that's why I'm on ZH 8 hours a day.

Tue, 10/23/2012 - 17:13 | 2914030 centerline
centerline's picture

That is one hell of a great run!  Don't give it back though.  APPL looking sort of "toppy" here - at least in the short term.

Tue, 10/23/2012 - 17:46 | 2914129 I am a Man I am...
I am a Man I am Forty's picture

I worry about the competition, the marketing isn't as good lately (they need to correct this fast), the products are still very good and Samsung makes good stuff.  4th quarter is going to be strong, 3rd quarter probably not.  Not too many places to put capital these days though, too much $$ on the sidelines as it is.  For now, I'm sticking with apple because it is currently the best company in the world.

Wed, 10/24/2012 - 07:27 | 2915255 kralizec
kralizec's picture

Don't worry, the release of Windows 8 is coming to the rescue, things will look up for AAPL soon.

Tue, 10/23/2012 - 17:26 | 2914070 CPL
CPL's picture

You'll lose 7 if you don't put in your stops.


BTW, go Check and put in your stops

...when you talk to your mother next, Check and put in your stops

...if shopping for a nice sharp cheddar, Check and put in your stops.

...while taking a stroll after supper beforehand, check and put in your stops.




Tue, 10/23/2012 - 17:37 | 2914102 I am a Man I am...
I am a Man I am Forty's picture

I don't use stops.

Tue, 10/23/2012 - 18:54 | 2914338 centerline
centerline's picture

Now we know your 7 digits included the two places after the decimal point.  lol.  Dear God dude.   Pull this leg... it plays jingle bells.  And if you are for real, HOLY SHIT - your nuts.

Tue, 10/23/2012 - 21:24 | 2914675 CPL
CPL's picture



Rough trader.  Well put some aside to start over again then and don't touch it until you need to pay rent.  I hear Barclay's is hiring.

Tue, 10/23/2012 - 17:37 | 2914104 Spastica Rex
Spastica Rex's picture

Plus what?

Tue, 10/23/2012 - 16:41 | 2913940 insanelysane
insanelysane's picture

I would agree but I think people already own this type/size device.  It may catch fire for Christmas.  Time will tell.

Tue, 10/23/2012 - 17:36 | 2914099 Saro
Saro's picture

"People like this size or they wouldn't have made it"

Under that theory of production, no company can ever fail.  No wonder you're bullish.

Tue, 10/23/2012 - 17:40 | 2914108 Spastica Rex
Tue, 10/23/2012 - 16:58 | 2913996 I am a Man I am...
I am a Man I am Forty's picture

Everybody should go long apple right here, there is a negativity bubble going on here.  I'm getting junked for stating obvious facts.  I expect 3rd quarter to be a little soft, 4th quarter is going to crush it.

Tue, 10/23/2012 - 18:56 | 2914349 centerline
centerline's picture

Need somebody to sell to eh?

Tue, 10/23/2012 - 21:28 | 2914683 CPL
CPL's picture

He's a contrarian investor. 


Buy high sell low.  I think it's time we moved away from this one he's high as a kite on hopium and disconnected his phone for an Irish vacation.

Wed, 10/24/2012 - 07:41 | 2915272 NidStyles
NidStyles's picture

LOL! No thanks, I prefer my money to stay in my pocket, not yours.

Tue, 10/23/2012 - 16:17 | 2913846 azzhatter
azzhatter's picture

but....but... Cramer said BTFD

Tue, 10/23/2012 - 16:17 | 2913849 fonzannoon
fonzannoon's picture

ben can save the metals tomorrow. stawks are fked.

Tue, 10/23/2012 - 16:18 | 2913855 lemonobrien
lemonobrien's picture

when your chick wants you to fuck her in her ass; you have a small dick.

Tue, 10/23/2012 - 16:22 | 2913865 Abraxas
Abraxas's picture

Aaaah, and I was wondering why they all ... Never mind.

Tue, 10/23/2012 - 16:29 | 2913893 Seasmoke
Seasmoke's picture

thats not the case nowadays.......they ALL love it in the ass

Tue, 10/23/2012 - 21:28 | 2914686 CPL
CPL's picture

LMAO.  That seriously deserves a tshirt.

Tue, 10/23/2012 - 16:21 | 2913863 catacl1sm
catacl1sm's picture

I don't know why I even maintain my netflix sub. They never had any movies that I actually want to watch available for streaming. Even my kids have run out of cartoons to watch on it.

Tue, 10/23/2012 - 16:24 | 2913871 Flaming Ferrari
Flaming Ferrari's picture

Hmmm. Buy the mini-iPad or buy the mini much to choose from.

Tue, 10/23/2012 - 16:47 | 2913962 catacl1sm
catacl1sm's picture

Try to figure out how to scrounge up enough disposable income to buy a Christmas tree and presents for 5 kids, let alone some piece of 8" iShit.

Tue, 10/23/2012 - 16:29 | 2913890 oldfruit1
oldfruit1's picture

Facebook beat expectations .. Stock up 8% and counting .. b,owing through the roof !

Tue, 10/23/2012 - 16:41 | 2913934 Bear
Bear's picture

WSJ headline ... "Facebook Posts Loss, but Revenue Rises"

Tue, 10/23/2012 - 17:07 | 2914018 Yen Cross
Yen Cross's picture

facebook is long "BitCoin".

Tue, 10/23/2012 - 19:53 | 2914488 fuu
fuu's picture


Tue, 10/23/2012 - 17:13 | 2914032 Captchured
Captchured's picture

Don't worry; they're going to make it up in volume.

Tue, 10/23/2012 - 17:42 | 2914114 oldfruit1
oldfruit1's picture

12 c a share but when including compensation actually -2 c a share. since when did a company not include compensation as a basic cost of doing business?!

$150m made from mobile .. how the fuck did they do that .. guessing screwed over some advertisers by promising results .. they havent had a chance to see that no one fuckiong opens banners on mobile! bullshit idea.

monkeys are buying this stock like its running out .. what the fuck is going on?



Tue, 10/23/2012 - 17:56 | 2914150 Yen Cross
Yen Cross's picture

Thanks oldfruit1.         I have more macro things to watch, like PBoc FLASH PPi.   

Wed, 10/24/2012 - 06:39 | 2914205 oldfruit1
oldfruit1's picture

dude, your flash ppi came out .. as usual a non event as the no is made up by the politburo ;)

facebook on the other hand is something that a lot of people on here watch ..


Tue, 10/23/2012 - 16:34 | 2913891 ebworthen
ebworthen's picture

8 inches is too much for a lot of Women, especially those with a short uterus.

Bullish for thicker tablets with a longer battery life.

Tue, 10/23/2012 - 16:42 | 2913943 insanelysane
insanelysane's picture

How much is that app?

Tue, 10/23/2012 - 16:31 | 2913898 Seasmoke
Seasmoke's picture

bring back Steve Jobs......he didnt want this POS released

Tue, 10/23/2012 - 16:35 | 2913911 virgilcaine
virgilcaine's picture

AAPL can't reignite, the fire is gone. When 800 hedges have taken up a home there it can't be good. They are not the smart money,, they are sheep and like to herd.

Tue, 10/23/2012 - 16:40 | 2913933 Arisu
Arisu's picture

It was to be expected. People simply saw the first half of the logistic function and modeled it using the exponential function - but real world innovation doesn't work like that.

Same story with economic growth, technological growth (i.e. singularity believers), and most other long-term predictions.

Tue, 10/23/2012 - 18:26 | 2914240 css1971
css1971's picture

And we have a winner!

Tue, 10/23/2012 - 16:37 | 2913920 Uncle Remus
Tue, 10/23/2012 - 16:40 | 2913929 I am a Man I am...
I am a Man I am Forty's picture

Quick, turn it to CNBC, Maria sucking Goldman's dick.

Tue, 10/23/2012 - 16:44 | 2913954 insanelysane
insanelysane's picture

Talking about creating value for their customers no doubt.

Tue, 10/23/2012 - 16:41 | 2913936 monopoly
monopoly's picture

Love the Bonus Chart. 

Tue, 10/23/2012 - 16:43 | 2913947 ex VRWC
ex VRWC's picture

Not everybody is a tech head.  Here is why they will sell:

  • Lighter and thinner, but with the no-kidding 10 hour battery life.  Its 30% thinner and lighter that anything else
  • Runs every IPad app right our of the box - all 250,000 of them
  • Front and rear facing cameras will be useful for apps like augmented reality
  • Small enough to be a better gaming device for accelerometer games than the full IPad
  • Better as a book reader, and hence for education market
  • Smaller for enterprise use, like medical, etc, where the weight/size will matter
  • Has 4G LTE

I understand its hip to hate on Apple, but they will sell 10 million of these before the end of January.  And no I am not a fanboy - I develop apps and software for all of these things.

Tue, 10/23/2012 - 17:04 | 2913961 Uncle Remus
Uncle Remus's picture

Doesn't make any less a pathetic commentary on the state of things.

"It has become appallingly obvious that our technology has exceeded our humanity." Attributed to Albert Einstein.

Tue, 10/23/2012 - 16:48 | 2913963 insanelysane
insanelysane's picture

But the Apple fans already own the Mac Book, iPad maxi, iPhone, and iPod.  At some point the sheeple will get bored of this brand.

Tue, 10/23/2012 - 16:58 | 2913995 ParkAveFlasher
ParkAveFlasher's picture

"I develop apps and software for all of these things."

That means you are not biased.




Tue, 10/23/2012 - 17:54 | 2914144 Matt
Matt's picture

By "All" (s)he likely meant iOS and Android at least, probably more. Developing for all the different devices is no longer anywhere near as difficult as it used to be. And yes, that means you can be unbiased.

Tue, 10/23/2012 - 18:51 | 2914327 malikai
malikai's picture

Not just the sheeple. More important to me is the more technical side of the Apple customer base: media folks - audio/video/image artists, etc. At some point Apple will abandon them too in search of the greater market share. Once they leave, it's over. I'm seeing more disenfranchisement among them which is scary for a company that these folks have been in love with in days past.

Wed, 10/24/2012 - 05:43 | 2915182 Disenchanted
Disenchanted's picture




I don't think we need iAppl toys for "augmented reality."

Tue, 10/23/2012 - 16:43 | 2913951 markar
markar's picture

So the headline is " AAPL's 8 incher shoots blanks"?

Tue, 10/23/2012 - 16:56 | 2913976 virgilcaine
virgilcaine's picture

Their cannibalizing their own product line..yum yum.

Tue, 10/23/2012 - 17:07 | 2914019 divide_by_zero
divide_by_zero's picture

No shit, they completely fucked up the Mac mini, no more discrete graphicc option, the 13" MBP retina no discrete graphics either, on new iMac the user can't upgrade memory on 21.5" but can on 27", useless/pointless iPad mini, only possible positive was new iPad.

Tue, 10/23/2012 - 16:58 | 2913997 QEsucks
QEsucks's picture

This Tyler's got to be Money McBags. The style is too distinctive. +1000

Tue, 10/23/2012 - 17:57 | 2914151 Matt
Matt's picture

Lack of dick and fart jokes, and no links to pictures of attractive women, I'm not seeing the resemblance. 

Wed, 10/24/2012 - 05:33 | 2915177 MisterMousePotato
MisterMousePotato's picture

You know? You're right.

Where are the Dallas Cowgirls in the [what was that called?] position?

Or the blonde haired, pigtailed German chicks in lederhosen? [Or whatever.]

Tue, 10/23/2012 - 17:01 | 2913999 VonManstein
VonManstein's picture

need some opinions here folks. regarding silver

almost all the oscillators are at or bellow previous major bottoms some are scraping the bottom. MACD RSI and STOCHMOMO are still slightly above the lows of previous years.

so it looks like a bottom on the oscilattors. the lowest one is the STOCHFULL which is exactly where it was on the feb 2010 low.

i got phyzz and thats nothing to be concerened about, this is a question regarding paper trading.. and obviously paper can always go lower and get slammed but i and am just wondering your thoughts.


alright thanks

Tue, 10/23/2012 - 17:25 | 2914068 oldfruit1
oldfruit1's picture

silver imo could pullback to 26 where there is huge resistance, in the meantime i wouldnt get long, but reload at around these levels with a 3% stop if you want to trade the longside.

Tue, 10/23/2012 - 18:13 | 2914192 VonManstein
VonManstein's picture

i have a position currnetly average around 29.30. gonna watch next few days.

cant see it going back to 26 but indeed anything is possible.



Tue, 10/23/2012 - 17:24 | 2914063 orangegeek
orangegeek's picture

Hey Folks!!!


It's a fucking computer!!!!! It's hardware!!!!  And there ain't no margin in hardware. 

Tue, 10/23/2012 - 17:39 | 2914106 Saro
Saro's picture

Have you met Apple? 

They make a great $2,000 computer.  The problem is, it's $3,000.

Wed, 10/24/2012 - 05:44 | 2915183 MisterMousePotato
MisterMousePotato's picture

Actually, they make a great ~$900 computer that they sell for ~$2,700 plus.

You cannot imagine how many times, how much time, I have spent wondering, "Who buys this crap?"

I knew a lady. She bought an iThing something or other a few years back. It cost $1,100.

It had, for a gpu, an Nvidia ... what was it? ... like an mx 440 or something thereabouts.

Huh?!? Are you kidding me?

"We're like the elite for professional image artists only. We don't use any of that crap PC hardware; oh, no."

Man, I bought and discarded one of those cards (for a PC) a decade ago. Maybe 11 or 12 years ago. Been so long I forget.

But this is cutting edge in a thousand dollar iCrap (A thousand dollars, in case you didn't know, on the PC side of things, is a lot of money. I'll bet 90-95% of PCs retail for less than that. Although, to be honest, I really don't know. But I do know that you can go to Tom's Hardware, and learn how to assemble a computer, using quality components, for a fraction of that, and, done properly, will give the most expensive computer possible a run for its money.

Fucking iTards.

Tue, 10/23/2012 - 17:26 | 2914066 virgilcaine
virgilcaine's picture

Risk off on Stocks and Pm's.  Re Silver..

Tue, 10/23/2012 - 18:25 | 2914228 VonManstein
VonManstein's picture

\PMs started moving down in advance of all this, 4 down weeks now. stocks need to catch up and so we could see more weakness there short term. PMs are at oversold 8hr + daily readings and risk related FX also on 8hr basis.

also PM moves exagerated vs DXY "strength" so perhaps theyve "priced in" some major risk offness

Tue, 10/23/2012 - 17:31 | 2914089 icm63
icm63's picture



AUDJPY is NOT selling off, this is the funding for the stock markets. Borrow YEN to buy risk assets.

EURJPY is holding up as well

Tue, 10/23/2012 - 18:27 | 2914239 VonManstein
VonManstein's picture

you may be right but isnt USDJPY outside strength something to do with this?

Tue, 10/23/2012 - 17:53 | 2914142 Yen Cross
Yen Cross's picture

The "quadrant" style  first grey chart says it all. In color coded glory. Notice red was a boundry. Blue defined previous highs and lows, whilst yellow shows possible breakout areas.

Tue, 10/23/2012 - 17:58 | 2914152 DaylightWastingTime
DaylightWastingTime's picture

apple had to make an 8 inch tablet in order to sue samsung for already stealing their idea. brilliant!

Tue, 10/23/2012 - 20:04 | 2914514 mendigo
mendigo's picture


thank you

Tue, 10/23/2012 - 18:10 | 2914184 Gamma735
Gamma735's picture

Apple's newest innovation is the Newton.  It will kill the Palm Pilot market.  -1998

Tue, 10/23/2012 - 18:24 | 2914224 freedogger
freedogger's picture

I was ready to purchase a 13 inch macbook pro today. Can only get 8gb of memory on it. Total fail...

Tue, 10/23/2012 - 18:48 | 2914312 phoolish
phoolish's picture

Aerosmith had a 10 inch in the 70's.  This is nothing.



Tue, 10/23/2012 - 20:25 | 2914553 redd_green
redd_green's picture

Well, we know Steve Jobs is gone, when the best Apple can do is make a different size version of some crap they already have.    How long before the idiots that ran the company into the ground the last time do it again?   2 years?

Wed, 10/24/2012 - 07:42 | 2915278 NidStyles
NidStyles's picture

I give it 8 months at this rate.

Wed, 10/24/2012 - 04:28 | 2915144 waterdude
waterdude's picture

A new low in "journalism" from the previous record holder: zerohedge.  "8-incher", "crashtastic" & trannies all in one posting.

Hard to beat that, but I'm ZH will. 

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