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AAPL Death-Cross Pushes Dow To Highs

Tyler Durden's picture





 

Of course, it makes perfect sense - the largest market cap company in the world drops further and experiences a death cross and sure enough - the evergreen Dow Jones Industrial Average ended near the highs of the day - well north of the critical 'retirement-on' 13,000. In general risk-assets were quietly correlated with stocks today (amid relatively quiet volume on the major averages) but we note that the capital structure ETFs in general were less exuberant - though they did get a little bounce after the consumer credit data. All-in-all, the Dow stood alone in its non-AAPL exuberance as the rest of the market was mired in the sentment shift that is occurring (note the Dow saw ts 50DMA cross below its 100DMA and its closed perfectly intersecting with those averages). Must be the 'great' jobs number, right? Treasury yields end near their lows of the week, USD near its highs, Gold down on the week though at 3-day highs (supporting stocks), and high-yield credit weak today. Paging Skynet...

The S&P remained considerably more excited that credit/rates/vol today - though the latter did tend to keep pulling back up...

 

and the Dow's rise is very exciting for Pisani et al... but we wonder just what the machines were thinking when we see it close spot on its 50DMA, 100DMA and saw them cross each other in their own little death cross...

 

We hate to burst everyone's bubble (everyone being the herd of hedge fund managers who remain 'stuck') but there is only one reason why AAPL's stock is falling. Forget the fundamentals, its not about higher margins at a second-tier clearing agent, and it's not about arbitraging CNBC prognosticators. It's sentiment - plain and simple. The death crossing of the 50DMA below the 200DMA, while exciting and pretty to look at, merely reflects the shift from most loved to most hated as every manager who lauded the magical exponential rise is now talking it up while selling it down to reduce that over-weighting. An ugly end to an ugly week as we suspect the modest bid under the S&P remains due to the beta-hedged AAPL unwinds. WWJTD?

 

 

 

And the last 3 days - it is very clear that institutional selling is in play as VWAPs get hit and drop...

 

Charts: Bloomberg and Capital Context

 


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Fri, 12/07/2012 - 17:07 | Link to Comment RacerX
RacerX's picture

oh noes

Fri, 12/07/2012 - 17:22 | Link to Comment Ruffcut
Ruffcut's picture

If you are not worth a shit then you rally. WHen you have value and actual fundymental worth, then just forget it.

The new world, where shit is really shinola.

Trying very hard not to step in it, but it keeps following me. 

Fri, 12/07/2012 - 17:24 | Link to Comment CClarity
CClarity's picture

The impulse of evolution is not small - but it doesn't happen all at once.  The "old ways" are trying very hard to hold the "norm" together but the change is coming.  To the financial system, TPTB, the tyranny.  Because evolution happens even when denounced.  

Rise up against patience.

Fri, 12/07/2012 - 17:56 | Link to Comment FurZo
FurZo's picture

Am I the only AAPL bear that thinks AAPL is overracting?

Sat, 12/08/2012 - 09:21 | Link to Comment tbone654
tbone654's picture

bears don't average down...  Sounds like you want too...

Fri, 12/07/2012 - 17:09 | Link to Comment malikai
malikai's picture

Wow.. Way below the cross there.

Hardcore.

Fri, 12/07/2012 - 17:46 | Link to Comment spastic_colon
spastic_colon's picture

rotating out of AAPL into dividends for year end statement painting

Sat, 12/08/2012 - 06:25 | Link to Comment boogerbently
boogerbently's picture

"Death Cross",

"Fiscal Cliff"......never mind.

Fri, 12/07/2012 - 17:11 | Link to Comment ZerOhead
ZerOhead's picture

A crAAPL a day keeps the bears away...

Fri, 12/07/2012 - 17:11 | Link to Comment Calidreaming
Calidreaming's picture

It doesnt matter-  all news is GOOD news!

 

the fucked up world we are in.

Fri, 12/07/2012 - 17:15 | Link to Comment LongSoupLine
LongSoupLine's picture

another day of complete fucking corrupt bullshit being shit out the stinking ass of Bernanke and his fucking algos.

Fri, 12/07/2012 - 18:03 | Link to Comment Everybodys All ...
Everybodys All American's picture

take a look at CBMX today. Totally corrupt. Totally.

Fri, 12/07/2012 - 17:13 | Link to Comment slaughterer
slaughterer's picture

Since when--in Bernanke's market--has a death cross been confirmed by a large stock sell off afterwards?

Fri, 12/07/2012 - 17:16 | Link to Comment malikai
malikai's picture

It would be very telling if AAPL goes back to 700 from here.

It would be time to send out a search party to find RobotTrader.

Sat, 12/08/2012 - 21:31 | Link to Comment They Tried to S...
They Tried to Steal My Gold's picture

It wouldnt surprise me at all if the Plunge Protection Team sets up the SPX Cash over 1425 and then unleashes the mother of all AAPL squeezes to launch the Index over 1475 and the NASDAQ to 3200.....

 

The Bernank ha said all along .....he wants higher stock prices...

 

Prior to the collapse to 5400.....

Fri, 12/07/2012 - 17:16 | Link to Comment CPL
CPL's picture

When there are only 240 people holding it and attempting to not trip on each other.  Dancing with cement shoes in a crowded room.

 

At least nobody is really getting hurt by it, they'll just beg for more money and get it.

Fri, 12/07/2012 - 17:19 | Link to Comment dirtyfiles
dirtyfiles's picture

right on

all those bearish technical formations where used to trap shorts and this is going now for about 3 yrs

but becouse of that no one is "investing" in this crooked casino

Fri, 12/07/2012 - 19:08 | Link to Comment Freddie
Freddie's picture

SkyNet runs the casino and the drones.

Mon, 12/10/2012 - 04:27 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Momentum & physics still controls skynet.

2012 09 13 spy crash soon - goldpricemodel

Fri, 12/07/2012 - 21:44 | Link to Comment El Hosel
El Hosel's picture

Yeah,

The Federallies seem to like the H/S top to lure in the shorts - followed by the H/S Bottom to blast back up to "where the market belongs", you know, above 13,000.

 Tools of "the tools" you might say.

Fri, 12/07/2012 - 17:21 | Link to Comment Yen Cross
Yen Cross's picture

 Death Cross> wtf? It's common in currency trading/ We call it the golden cross ~ no matter which way the 50 & 200 day is converging/diverging.

  Shorting the trade still [sort of], exists in currency trading...

Fri, 12/07/2012 - 17:16 | Link to Comment stant
stant's picture

those 350k that quit looking for work are standing inline to get a iphone. reminds me of a john prime song

Fri, 12/07/2012 - 17:16 | Link to Comment francis_sawyer
francis_sawyer's picture

Reggie... Reggie... Reggie...

~~~

Maybe you'll get a candy bar named after you...

Fri, 12/07/2012 - 17:18 | Link to Comment PUD
PUD's picture

"death cross" is the most inane t/a ever dreamed up. There is no such viable thing and a study of all that have occurred reveals zero predictive power. I love the analysis here but you really should dispense with the voodoo...it is all meaningless irrational illogical babble and buzzword

Fri, 12/07/2012 - 17:43 | Link to Comment spastic_colon
spastic_colon's picture

careful Tyler(s) it appears the bernank/obummer mind control police have infiltrated ZH, they only want you to "think" it is meaningless irrational illogical babble and buzzword.

Fri, 12/07/2012 - 18:27 | Link to Comment Wannabee
Wannabee's picture

Equity market: aka Calvinball

Sat, 12/08/2012 - 08:18 | Link to Comment max2205
max2205's picture

Unless price collapses , it usually follows by a up move. It an early warning most of the time

Mon, 12/10/2012 - 04:26 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Duh. That's what he said.

Unless it goes down, meaning, no predictive power. If it was predictive there is no "unless".

See this? THIS is predictive. Now you try:

2400 GOLD BY 2013 September

Fri, 12/07/2012 - 17:18 | Link to Comment magpie
magpie's picture

Still no denials, rumors or news from the Greek buyback operation

Fri, 12/07/2012 - 17:19 | Link to Comment VonManstein
VonManstein's picture

LOL great title. "nuff said"

Fri, 12/07/2012 - 17:24 | Link to Comment SheepDog-One
SheepDog-One's picture

Big deal where the DOW closed today, hell we've been at 13,100 for months so what?

'Critical 13,000' yea whatever I was hearing the same at 12,000 and 11,000, etc.

Fri, 12/07/2012 - 17:25 | Link to Comment Yen Cross
Yen Cross's picture

 Good point SD-O.

Like santelli said, when asked about the 2-3 bps rise in T-10s. He replied " They closed .5 bps above last Friday...

Fri, 12/07/2012 - 17:30 | Link to Comment SheepDog-One
SheepDog-One's picture

Yep, seems everyone today is examining the big picture mural with an electron microscope. 

Fri, 12/07/2012 - 17:35 | Link to Comment John Law Lives
John Law Lives's picture

On Dec 31, 1999, the DJIA had an adjusted close of 11,497.12.

On December 7, 2012, the DJIA closed at 13,155.13.

That is a whopping increase of approximately 14% in nearly 13 years.  Considering REAL inflation since then, that is not too impressive.

 

http://finance.yahoo.com/q/hp?s=%5EDJI&a=11&b=31&c=1999&d=11&e=31&f=1999...

Fri, 12/07/2012 - 17:43 | Link to Comment rodocostarica
rodocostarica's picture

Yeah and consider the changes in stocks in the DJIA since then to make it look even better. Losing proposition.

Fri, 12/07/2012 - 17:55 | Link to Comment John Law Lives
John Law Lives's picture

Considering the explosion of the federal debt level, the growth of the Fed's balance sheet, and the aforementioned decline in the value of the US Dollar since then, I would say it was FUBAR.

FUBAR.

Fri, 12/07/2012 - 18:06 | Link to Comment disabledvet
disabledvet's picture

Certainly nothing to "rah rah" over...I agree. Just posted "the Dow is a Dog" at SA. The stupid money has crushed the pro's....again.

Fri, 12/07/2012 - 18:26 | Link to Comment NotApplicable
NotApplicable's picture

Meanwhile it generated who knows how much tax revenue from the any retail investor who "won."

Fri, 12/07/2012 - 18:30 | Link to Comment Lord Of Finance
Lord Of Finance's picture

Yeah, yeah. I believe this bear market started in 2000 in terms of gold valuation. Either way, its a long term bear market we are in, and when you look at the past bear markets of the 20th century, at the end of the bear market all principle was in the negative and took many years afterwords to get back to even after inflation adjustments.

Fri, 12/07/2012 - 17:21 | Link to Comment chancee
chancee's picture

More like xlf hedged...

Or maybe it's just the 10th attempt in 3 years to try and convince everyone the financials are a bargain.

Fri, 12/07/2012 - 17:22 | Link to Comment dirtyfiles
dirtyfiles's picture

only golden cross accepted no death cross WTF?

Fri, 12/07/2012 - 17:26 | Link to Comment Yen Cross
Yen Cross's picture

 When you can short the markets without a permanent {Fed. put} on them, everything is golden...

Fri, 12/07/2012 - 17:28 | Link to Comment kitoha
kitoha's picture

531.9 A/H


Fri, 12/07/2012 - 17:35 | Link to Comment fuu
fuu's picture

Here's to next week and the Fed meeting.

Fri, 12/07/2012 - 17:41 | Link to Comment sessinpo
sessinpo's picture

Another bad post by TD where one erroneously claims if B happens after A and C results, then B must be the cause of C.

 

Since when was Apple a component of the DJIA? Never.

Okay, so you want to use the argument that people fleeing Apple are going to the Dow. But they could also flee to other assets. Debunked.

And I post this as not being an Apple fan. I think Apple and the Dow are overpriced. I just go after non logical thinking.

 

 

Fri, 12/07/2012 - 19:04 | Link to Comment The Master
The Master's picture

If you've been following the markets for the last two years (which, judging by your post, it doesn't seem you have), you will have noticed that on the days in which AAPL saw huge ramps, the entire market was lifted upwards.  However, now that there is heavy institutional selling, TPTB is having a harder time lifting AAPL.  So what do they do?  Keep Dow lifted instead.  That is the gist of what the Tylers are saying.  I know it's tough to follow but keep trying.

Sat, 12/08/2012 - 08:23 | Link to Comment samcontrol
samcontrol's picture

it also means you had to be bullish the last two years.

Mon, 12/10/2012 - 04:21 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

My following is that AAPL doesn't quite correlate to the QQQ / NASDAQ but it is closer to QQQ than anything else, and QQQ correlates to SPY some of the time - visibly clear patterns using log-scale each axis. Try QQQ x-axis (common) and for the Y-axis left try AAPL and right try SPY. See the pattern emerge.

This is NOT lifting the DOW. The DOW is being lifted in a large way from multiple shots while the QQQ is being lifted BECAUSE of the Dow and dragging its big components with it - until APPL truly looked like crap & GOOG had their mid-trading-day fuckup which simply had NO repair possible at that point.

Fri, 12/07/2012 - 17:40 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

...Life Cross of our Father in Christ is King.

Fri, 12/07/2012 - 17:46 | Link to Comment Rathmullan
Rathmullan's picture

Kevin can't be bothered with such realities. Is only job is to keep the masses thinking tht they are missing out on a great bull market by manipulating the only market index that the masses believe to be relevant. 

Fri, 12/07/2012 - 17:51 | Link to Comment Scalaris
Scalaris's picture

Pay no heed to this harlequinade; just algos being algos.

Evidently, their advanced sentience also craves for christmas bonus.

Fri, 12/07/2012 - 18:12 | Link to Comment Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Never used an Apple product until recently. An iPad. Everything is walled off and u cannot do many things like mirror any program to TV. U can only install apps approved by apple.

I was not used to all the restrictions and liken it to a communist computer, always watching over u to tell u something is not approved.

Who pays more money for more restrictions?
They're computers for iDiots and freespending comrades.

Fri, 12/07/2012 - 18:34 | Link to Comment NotApplicable
NotApplicable's picture

I've got a third gen. iTouch. Back when it was new, the feeling wasn't so much "this thing is really walled off" as it was "wow, look at all the apps they've got in this one convenient location."

These days though, given the proliferation of all sorts of apps, the control issues have become glaring. Especially if you're a developer. So, for me, I'll never develop an app for any device, but rather will rely on HTML5 and whatever other mobile web technologies appear.

As for Android, well, I don't trust it anymore than I do Apple. What they lack in control is more than made up for by the constant spying. Almost every app I get these days wants to access everything on the device.

Fri, 12/07/2012 - 18:57 | Link to Comment Freddie
Freddie's picture

Apple is filled with libtards and many of their users are libtards.  Using a commie iGadget for them is Nirvana. 

They should Cobain themselves.

Sat, 12/08/2012 - 02:47 | Link to Comment Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Damn accidental double posts. Of course I'm trying to type on this damn iCrap device.

Sat, 12/08/2012 - 02:44 | Link to Comment Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Only after jail breaking the thing did it truly become mine, and not apple's property. Apple doesn't even have 1 "approved" ad-blocker app. WTF?

What's funny is all the people I know who love crApple products are all liberals too. Most are stupid enough to think Obomber (President Fake Birth Certificate) can fix the economy! What a bunch of maroons.

Fri, 12/07/2012 - 19:25 | Link to Comment swmnguy
swmnguy's picture

Well, I just read an article on Yahoo Finance, citing Jim Cramer, advising everyone not to panic.  A few choice excerpts:

"Let me just say, for the record, this is all nuts," said Cramer. Apple has become a story of the holders, not the products. It is a story of the chart, not the fundamentals. It is a story of fear, not of opportunity."

In other words, when it was going up, it was the stock to buy. Now that it is going down, it's the stock to sell.

But if you're short Apple, Cramer thinks you'd better make your move quickly - that is, he doesn't see a lot more downside.

He thinks downside momentum will be eclipsed by something far more important - fundamentals that are optimistic.

And Cramer sees plenty of reason for optimism.

"We could find out that Apple's going to be able to put out ten times more iPads because the device is supplanting the PC market. We could find out the iPhone will have had bigger sales than we thought. We may even hear an OMG product might be on the way," said Cramer.

The current price action isn't factoring in much if any of that.

In addition, "as the stock goes down, the amount of cash on the books makes the stock that much more attractive," Cramer added. "We're talking $100 billion in cash-and growing-as shares decline that becomes an increasing percentage of the company."

All told, Cramer said the most likely outcome is that "The valuation will become so cheap that it would be too compelling for informed investors not to own."

But what about the negative technicals and the death cross we mentioned above - technicals that are getting a lot of attention.

"Meaningless at this point," said Cramer.

Cramer may be onto something. Research from CNBC's Fast Money shows analysts who study charts seem to be a lot more bearish on the stock than analysts and investors who concentrate on fundamentals.

Cramer believes it's only a matter of time before sentiment changes and Apple bulls step in. "If it visits the low 500s again, it's time to buy," he said.

This is great stuff, isn't it?  "We may even hear an OMG product might be on the way."  Awesome.  We may even.  Hell, we may hear the Gettysburg Address out my ass, too.  It could happen.

Even better, "Analysts who study charts seem to be a lot more bearish on the stock [AAPL] than analysts and investors who concentrate on the fundamentals."  And what about people who give weight to Jim Cramer's stated opinions?  Oh, wait.  We can't really sample them because they now live under bridges and can't access their e-trade accounts anymore.

Sat, 12/08/2012 - 02:04 | Link to Comment FreedomCostsaBu...
FreedomCostsaBuck-o-Five's picture

Cramer the loudmouth who said not to panic about Bear? Cramer who spastically slapped all the 'buy, buy BUY!!' buttons for Lehman? ... Yeah, I remember.

Sat, 12/08/2012 - 02:22 | Link to Comment Freddie
Freddie's picture

This whole "cheap valuation" crap always falls apart when a company has huge sales and earnings growth then it slows a lot.  The PE will drop and people think it is cheap.  The growth story is very close to being over at Apple.

Sat, 12/08/2012 - 15:41 | Link to Comment W74
W74's picture

Cramer also said that Bear Stearns was fine three days before it lost 90%.

Fri, 12/07/2012 - 21:52 | Link to Comment franzpick
franzpick's picture

You can run away from the Jan. 2012 breakaway gap at 425, but you can't hide.  Especially when you're in a group of 400 hedge fund managers.  AAPL 425 within 6 months, probably sooner, imho:

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=aapl&insttype=&freq=1&show=&time=8

Fri, 12/07/2012 - 23:55 | Link to Comment Vince Clortho
Vince Clortho's picture

Death Cross on Apple and "the market" pays no attention.

Is there is a clearer signal that this casino is rigged?

On a related note, is it time to invest my nest egg in FB?

Sun, 12/09/2012 - 01:45 | Link to Comment spartan speculation
spartan speculation's picture

could be funds with AAPL profits are taking them now and moving them into the dow ??  maybe one of the special dividend stocks. 

Mon, 12/10/2012 - 04:18 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

:( rating 2 for misread of technicals.

Throwing SPY arbitrage models isn't so cool when AAPL is the headline. Present the AAPl arbitrage model or don't pretend to be iSmrt

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