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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Wed, 01/23/2013 - 16:03 | 3180242 Neethgie
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.

Wed, 01/23/2013 - 16:15 | 3180300 redpill
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I'd recommend getting out of AAPL well ahead of April 15.

Wed, 01/23/2013 - 16:28 | 3180354 Freddie
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.

Wed, 01/23/2013 - 16:33 | 3180373 redpill
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Not only that, but supposedly that's the day this little thing called the Samsung Galaxy S IV is being released.

Wed, 01/23/2013 - 16:49 | 3180446 ZippyBananaPants
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Why is Brittney Spears at the Bengazi hearings?

Wed, 01/23/2013 - 16:52 | 3180459 redpill
redpill's picture

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

Wed, 01/23/2013 - 16:02 | 3180245 PUD
PUD's picture


Wed, 01/23/2013 - 16:10 | 3180283 Xibalba
Xibalba's picture


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


Wed, 01/23/2013 - 16:58 | 3180492 espirit
espirit's picture

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

Wed, 01/23/2013 - 16:11 | 3180285 JLee2027
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Production cutbacks for iPhone and other products. Either falling demand or silver shortage.

Wed, 01/23/2013 - 17:41 | 3180666 earleflorida
earleflorida's picture

hmmm... Nokia?

Wed, 01/23/2013 - 16:12 | 3180291 Martdin
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.

Wed, 01/23/2013 - 16:14 | 3180294 rubearish10
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Perhaps, however, a much larger trigger is required to reset pricing of the glorious S&P 500! That is yet an unknown.

Wed, 01/23/2013 - 16:15 | 3180306 Cdad
Cdad's picture

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

Wed, 01/23/2013 - 16:25 | 3180342 Freddie
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!

Wed, 01/23/2013 - 16:19 | 3180316 OutLookingIn
OutLookingIn's picture

Hot air rises!

Wed, 01/23/2013 - 16:22 | 3180331 markettime
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.

Wed, 01/23/2013 - 16:56 | 3180480 Frank N. Beans
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.

Wed, 01/23/2013 - 17:01 | 3180515 slaughterer
slaughterer's picture

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

Wed, 01/23/2013 - 19:39 | 3181116 Martdin
Martdin's picture

Well... This is awkward...

Thu, 01/24/2013 - 02:08 | 3181923 nastaking
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

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