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