An Apple A Day Once Again Kept The Market Crash Away (Until After-Hours)

Tyler Durden's picture

Despite a grumpy open in the major cash equity indices - which opened pretty much in line with where S&P futures had closed on Friday morning - equity indices provided some BTFD reassurance for any and everyone who wanted to get on TV today. In sad reality, a lot of this equity index performance was due to Apple's 2% rally off pre-open lows, as it made new highs and vol continued to push higher. Financials, Industrials, and Materials all underperformed on the day (and Utes outperformed but still lost 0.5%). The majors were hurt most once again but remain notably expensive still to their credit-market perspective. On an admittedly quiet volume day (with Europe closed), the credit market (especially HYG) underperformed equity's resilience open to close but an after-hours reality check dragged ES down to VWAP once again on notably above average trade size and volume for the day. VIX managed top almost reach 19%, leaked back under 18 before pushing back up to near its highs of the day by the close - breaking back above its 50DMA (as the Dow broke below its 50DMA but the S&P remains above). Treasuries shrugged off the equity resilience and stayed in very narrow range near their low yields as stocks diverged once again (until after hours). FX markets were very quiet with JPY crosses getting some action as EUR and AUD managed to drag the USD down a little. Commodities were mixed off Thursday's close with Copper the major loser and Gold outperforming. Oil managed a decent intraday recovery today most notably back over $102. The weakness after-hours in ES (the S&P 500 e-mini future) is worrisome as its lost the support of AAPL and its options. At the cash market close, ES peaked for the day at 1382.75 and has since drifted back all the way to 1374.25 - just shy of the day's lows.

Credit remains the notable underperformer - back at multi-month wides now - while broad equity indices remain supported by Apple's heft (note the correction in ES coincided with a convergence with HY credit - blue arrow - and yet as cash markets opened today and Apple helped support equities. IG underperformed today - as it caught up to its fair-value intrinsics level and markets got to react to the significant compression in TSY yields from Friday. High yield remains troublesome for those saying buy-the-dip as given its cheapness and high-beta nature, it should be a natural place to jump in - and yet it is not and HYG has given up six months of carry in the last month or so...


Equities tried to pull away (the orange oval above and green oval below) but failed with the reversion after-hours as Treasuries stood their ground for equities to revert to (even though Treasuries limped higher in yield this afternoon by a bp or two)...


Financials underperformed today but remain notably rich still to credit market perspectives...

FX markets were quiet but EURUSD weakness (and swap-spread implied sterength) has pulled the pair back into short-term balance (though the rally into what was an imaginary European close was odd)...

Commodities were mixed but Copper is the clear lower and gold the strongest post NFP. Oil managed a decent recovery intraday back over $102...

Broadly speaking risk assets sold off (right hand side below) though there was some rotation from JPY carry trades doing better in the morning to TSY/2s10s30s carry and Oil doing better in the afternoon - which supported the equity rally. Correlations remain very low and as the left hand chart below shows - across the index capital structure HYG/VXX/TLT (credit/vol/rates) were notably less sanguine that stocks today...

And to make it clear just what happened after-hours for all those equity buy-the-dippers - ES reverted to VWAP and beyond with a ugly close...

Charts: Bloomberg


Bonus Chart: YTD performance of an equal-weighted S&P 500 relative to the normal cap-weighted S&P 500 has now reached its lows as the last 3 days have seen significant weakness of the equal-weighted (as large cap AAPL has dominated cap-weighted performance). Furthermore, as the chart shows, the 250bps of outperformance since mid-Feb coincides perfectly with AAPL's disconnect and parabolic rise...

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Robot Traders Mom's picture

Utes outperformed but still lost


This could easily mean any Utah college athletic program.

LawsofPhysics's picture

Ah, those april puts...

bnbdnb's picture





A. 14066
B. 6626
C. 13232
D. 6120???

catacl1sm's picture

One day of red, 4 days of green. On the other hand, it looks like the bag holders are unloading on the PPT at end of day now. new pattern perhaps?

Village Smithy's picture

That thought is like a wet dream from so long ago. Thanks.

francis_sawyer's picture

This is all just a head fake...

All will return BULLISH tomorrow when Alcoa reports strong sales in the Q1'12 due to channel stuffing of tin foil hats...


monopoly's picture

I sure hope few here are trying to trade this broken market. Not worth it. Keep that confetti dry until we get a blow out down capitulation day in the miners. The brilliant ones like the dollar now, so just put up with it. And still, shorting makes little sense until AAPL, CMG, PCLN and AMZN for starters break down. And it is not happening, yet. Remember, being right is wrong if your timing is way off.


SheepDog-One's picture

Then again, theres always the chance they just plan to rape everyone all at once in some pre-market session one of these mornings.

monopoly's picture

I will add 4 down days might mean a trend change in sight. Emphasis on "might".

Stax Edwards's picture

I'll go on the record stating short term, the top is in.  Hope I don't get Brusca'd on my call ;)

Zero Govt's picture

the Elliott (Idiot) Wavers are calling a 5 (top)

another Idiot Waver is calling a 3 followed by a 4 then a 5

another Idiot Waver is ....oh fuck, i just give up with this crap!!! 

Muppet Pimp's picture

Just for clarification, they say the 5 is in?  Sorry, for the dumb question, I am new here.  First Post Bitchez!

Likstane's picture

Ok for a first post.  You need to pick a fight with someone, maybe say something provocative.  At least you got the bitchez spelling right, beetch!

YesWeKahn's picture

Unless AAPL delivers 12$/share earnings, this market will drop like a rock and hit really hard at the bottom.

Every stupid anal-ist is talking about 1st trillion$ company.

1st, it isn't, petro china was the first.

2nd, nothing can support such valuation. They have to sell so many iphones and ipads with such high margins. It's a piece of hardware, it always has extremely high competitions from asian contries. They can't compete forever. They will fail again just like Apple in the 90s. AAPL will drop to 50$ in 5 years.

a growing concern's picture

I'm wondering if they didn't shoot themselves in the foot when they invented the iPad.  The iPad is now so good that you can essentially replace a laptop with it.  Just put a wireless keyboard on it, and there's not a whole lot of need for a laptop (unless you need the power of a MacBook Pro or something).  Sure, they continue to eat into the PC market for now, but I think they may have hastened the demise of their own core business by making laptop computers unnecessary.  Thoughts?

jannewmx's picture

Apple fanboys buy both the Macbook Pro and iPad. If Apple came up with a gadget called ineedyoutobuythisyoufuckingmorons, fanboys will go out and buy the new product. It's a religion and Apple stock prices are the NEW Babylonian tower.

GMadScientist's picture

I think you don't do anything interesting with computers if you're happy with the horsepower in an ARM.


element115's picture

The two utes?

The two what?

Zero Govt's picture

2 GM Utes on no finance, no interest, no credit

it's like free on the never-never (ie. you never pay)

who cares which Utes, they're free and prove taxpayer funded turnarounds are a 'winner' from every angle

Money 4 Nothing's picture

Oh.. excuse me... the two Uooothes.

rumblefish's picture

cody willard says its going to $1000 so its an easy buy at $636.

What could go wrong?

lizzy36's picture

Who is cody willard? And why do i care what he thinks?

Likstane's picture

Cody Willard is Kari Norgaard's lover.  He is the toughest man alive.

Yen Cross's picture

 That ( green HYG) line is scary on all the charts. High Yield SPREADS!   Nasty!

Stax Edwards's picture

My fault. Been moving into HYG on a long term basis, the humility gods are handing me my ass, that's all.

Would like to hear any compelling argument that HYG is really being stuffed with the JB table scraps as some claim though. I really like the diversification across sectors.

non_anon's picture

happy hour occurence for the PPT

dolph9's picture

When the iBots die, they will die en masse.

Just remember...they have digital toys with fading batteries that become obsolete in a few years.  We have timeless, eternal gold and silver.

Keep on stacking them up.

LongSoupLine's picture

You ever see what happens to an AAPL tree when it's not prunned? The fruit gets so heavy that the main trunk splits down the middle...tree dies.

Yen Cross's picture

 Windows 8 in September/ droid compatible.

  We caught the Ois breach last week/weak?


reca007's picture

One question zh to make money in this market has been on the long bullmarket. Opinions aré not for traders.
If you like to trade search for omniacademi nice trackrecord.
The move has been holiday reversals patterns. The coming week is buy the freaking dip.