AAPL Drops Below 50 DMA After Hours As Stocks Retrace 60% Of ISM Spike

Tyler Durden's picture

Equity indices managed to close green on a generally lower-than-average volume day but while the morning was dominated by a 20pt rip post-ISM's 4.5-sigma surprise, the post-Europe-close afternoon session saw us give back over 60% of those gains on rising volume and average trade-size. As the day-session closed, ES (the S&P 500 e-mini futures) was right around yesterday's highs and today's VWAP in a relatively balanced manner but after-hours was leaking lower still. AAPL also had a big rotation day as it opened red, surged into the middle of the day then gave it all back to close within a few pennies of its 50DMA (and in fact is trading below it in after-hours trading). Stocks pushed well ahead of credit markets as they rallied and HYG was far less impressed. Sure enough by the close, equities had limped back in line with credit's reality but in the meantime, HYG was back down at last Wednesday's levels. The ISM caused the USD to pop, stocks to pop more, oil to pop about the same and gold/silver/Treasuries to drop. The post Europe-close action saw stocks give back most of those gains, the USD leak back lower (as CAD strengthened), Oil maintained it bid over $106 (month highs) and Gold/Silver pulled back up nicely. Treasuries remained under pressure though with only a very late-day dip lower in yields to show for the dips in stocks (but convergent with stocks in the short-term). As expected, Energy and Financials outperformed close-to-close on a rally-day but also retraced the most in the afternoon as Discretionary and Materials also joined the high-beta fray. The strength in oil and weakness in TSYs was enough to juice risk-assets in general and provided some support for the rally but stocks remain rich relative to risk in general and we wonder how the bulls have it both ways - rally on unsustainable good news (but no QE3) and on bad news (Ben's got yr back) as the first day of May (absent any European hedging) seemed a chaotic rush to buy this morning that may have been a short-term climax.

 

ES flip-flopped from the bottom of its trend channel to the top and found notable resistance up there - ending up giving over 60% of that ISM spike back by the after-hours close.

The ironic thing on today's action is the fact that we topped out at the European close (when Europe was pretty much entirely closed anyway) - someone must have forgotten to tell the machines...

AAPL lost its 50DMA after-hours as its price actin of the last few days has mimicked the same price action heading into earnings (though on lower volumes)...

But credit markets were quiet in general and remained much less sanguine than stocks. ES managed to retrace pretty all if its excess to credit by the close and HYG lost notable ground into the close...

And while Treasuries were relative underperformers today, by the close, stocks (blue) had retreated back in line with bonds (red) and at the same time Gold (gold) and the USD (green) were also back in line...

But with stocks giving back some of their hope, our earlier note on energy prices seems prescient as Oil stole the show today with WTI back at five-week highs...

Charts: Bloomberg