AAPL - The 'Other' Great Rotation

Tyler Durden's picture

Much was made of the first two days of this year as indicative of the great 'meme' that every sell-side rep and commission-taking asset manager has pumped investors full of - the 'great rotation' is here. Finally, rates were rising, growth was here, money on the sidelines was moving, and the supposedly 'dumb money' was rotating from bonds to stocks. However, that is not what happened now is it? 10Y yields are now practically unchanged on the year - even as stocks continue to be bid - with the major divergence beginning on January 11th. There is, however, an alternate 'great rotation' that appears just as powerful - that of covering idiosyncratic AAPL longs and rotating into systemic long equity positions (or covering AAPL-hedging short equity index positions). We suspect, given the volume shifts below, that much of the mysterious buying power in S&P 500 futures is indeed beta-hedge unwinds from massively over-exposed AAPL longs unwinding. With AAPL's earnings due tonight, perhaps this 'rotation' will be over.

The 'not-so-great' Rotation


The 'Other' Rotation - from AAPL Alpha to SPX Beta... (or just unwinds of beta-hedged AAPL Longs)


Charts: Bloomberg

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Neethgie's picture

but wait, i heard this was a market that eschewed religion and state ? is this no longer a secular bull?

Tbf s&p 500 is wayyy overbought.

redpill's picture

I'd recommend getting out of AAPL well ahead of April 15.

Freddie's picture

I forget what year it was.  Maybe 1999 or 2000 or 2001.  The stock market got hammered big time just before April 15th.  I think people were selling loads of shit to pay their taxes.    Taxes are much worse now.  The HFT and alogs will keep the market up trading back and forth.

Like the RUT being propped up today.  The great Mullah will not let the markets drop.

redpill's picture

Not only that, but supposedly that's the day this little thing called the Samsung Galaxy S IV is being released.

ZippyBananaPants's picture

Why is Brittney Spears at the Bengazi hearings?

redpill's picture

She was singing "Hit Me Baby One More Time" on behalf of Hillary Clinton.

PUD's picture


Xibalba's picture


You guys catch this?  I bet the money went into prop(ing) accts


espirit's picture

$114 billion is just "noise" to the 25 largest banks, when they sleep with the guy that runs the printer.

JLee2027's picture

Production cutbacks for iPhone and other products. Either falling demand or silver shortage.

Martdin's picture

VIX near all time lows, widespread exuberance, all the while the S&P 500 is seemingly poised to rally higher... Nope, I'm staying out of this one, thanks.

rubearish10's picture

Perhaps, however, a much larger trigger is required to reset pricing of the glorious S&P 500! That is yet an unknown.

Cdad's picture

So....buy Apple and sell EVERYTHING?  What could go wrong with that?

Freddie's picture

I love Apple it is the bestest stock there ever was and will be ever.  I wish the Tyelers would stop saying bad things about Apple and they need to stop calling the iPhone 5 an overpriced piece of shit. 

If the Tylers keep bashing Apple...I am gonna cry.  I promise.  Just stop it Tyler!

markettime's picture

Doesn't FDIC drop the $250,000 deposit coverage to $100,000 this month? I would think this might spark some withdrawals from banks.

Frank N. Beans's picture

yup, the great rotation from the pages of finance.yahoo.com today:


The Great Rotation: A Flight to Equities in 2013Reuters

One of the big investment shifts of our day may be at hand - regardless of how global markets actually perform this year.

slaughterer's picture

It does not matter what figures AAPL posts, AAPL will go up about 7% to $550 in AH.  

Martdin's picture

Well... This is awkward...

nastaking's picture

the company has now announced a larger tablet device, the Xperia Q703A Tablet PC Z. The 10.1in tablet has a 1920x1200 display and is just 6.9mm thick