Newton Is Back As Apple Finally Falls

Tyler Durden's picture

UPDATE 2: AAPL bouncing from the lows even as Mac Rumors now reports that iPad 2 has been pulled from Amazon China. Recall this story on the recently contentious relationship between Apple and China.

UPDATE: AAPL now $502.08 lows for day -$24 from highs

Chatter of a QQQQ rebalance (Apple is up ~50% from the last rebalance compared to 10% for NASDAQ) seems to be stumbling the iEconomy as AAPL goes red. Now, which of the 209 funds will be first out of the door? and which last? Volume is picking up for sure and options (especially short-dated) are getting very excited. Of course, broad indices are losing their bid implicitly as ES drops below the pre-China rumor and post-Samaras pop levels. Perhaps it is the recognition that we sold off 7% in a week after the last QQQQ rebalance (April 2011) and the pre-move was nothing compared to this...

 

Apple's outperformance of the NASDAQ (below) since the last rebalance is remarkable and perhaps supports the rebalancing rumor.

 

Also of note perhaps is the put-call ratio is below 0.7 which tends to initiate a trend stall or reversal (h/t John Lohman) and also the implied Kurtosis for long- and short-term options has crossed (i.e. short-term complacency has rotated almost entirely to long-term about major downside moves) which has tended to also point to trend stalls or reversals.