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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.


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Wed, 02/15/2012 - 14:04 | 2162605 Cdad
Cdad's picture

Absolutely no one could have seen that coming.


Wed, 02/15/2012 - 14:11 | 2162641 Mr Lennon Hendrix
Mr Lennon Hendrix's picture


Wed, 02/15/2012 - 14:19 | 2162692 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Fisher is just there to give the Fed an ounce of cred once the Fiat Ponzi implodes.

Wed, 02/15/2012 - 14:27 | 2162708 TruthInSunshine
TruthInSunshine's picture

If Apple falls significantly, it will rip a massive hole in The Bernank's virtuous circle experiment of economic theory (the one where The Federal Reserve has as its prime directive the task of artificially juicing and supporting equity prices using taxpayer dollars).

No, I'm not joking, given the number of buyers/holders and the leverage involved in the underlying structure that is the virtuous circle.

The Bernank had better plug that hole, and quickly.

Never put all your eggs or apples in one basket, charlatans of fractional reserve banking schemes.

Wed, 02/15/2012 - 14:31 | 2162740 dwdollar
dwdollar's picture

<cough, cough>Climax Top<cough, cough>

Excuse me.

Wed, 02/15/2012 - 14:40 | 2162768 VanillAnalyst
VanillAnalyst's picture

Well ya know, if you have ~$100bn in cash in a pile at home, and the Fed prints an assload more $$$'s..... idk, kinda, sorta, maybe, tiny issue? perhaps?

Next stop $250.

Wed, 02/15/2012 - 16:00 | 2163137 Buckaroo Banzai
Buckaroo Banzai's picture

Apple really, really needs to buy some gold.

Wed, 02/15/2012 - 20:02 | 2164100 natty light
natty light's picture

I would think tech firms would be buying silver while it is cheap. I heard they use it to solder stuff.

Wed, 02/15/2012 - 14:34 | 2162752 Red Raspberry
Red Raspberry's picture

Ben the Bank should gave plugged his hole a couple years ago.

Wed, 02/15/2012 - 14:41 | 2162775 CPL
CPL's picture

Apple is falling like a rock because of copyright infringement.  The irony is it lobbied for the laws in China.


All Apple iPads are getting yanked off of store shelves as of Monday.  That and the loss of 400 million chinese citizens (out of 1.6 billion) with disposable income can purchase one of many Android based solutions that are 1/10th the cost.


So Apple will be selling crap to clients in North America, Japan and Europe.  China, not until they bribe the right people a lot of money.  India is appearently intending to take the same stance with it's locally produced tablet lines.

Wed, 02/15/2012 - 14:52 | 2162822 GeneMarchbanks
GeneMarchbanks's picture

I'm no Apple devotee but this seems shady as a... um... just shady. Anybody else think this has been a Chinese ploy for at least like a couple thousand years?

Wed, 02/15/2012 - 15:22 | 2162879 TruthInSunshine
TruthInSunshine's picture

***Onion (or not?) Breaking News***


China announced it is seizing all of Apple's assets pursuant to both a)  enforcement of an unpaid trademark infringement award against Apple, and b)  new trade violations proposed by the U.S.

In other news, Foxconn has announced that is repudiating its contract to produce products for the Cupertino, California based seller of such gadgets as the iPad, iPhone and Macintosh computers, due to a variety of legal disputes that it will more formally articulate by way of a seperate lawsuit, expected to be filed in China within the next several weeks.

Foxconn has seperately announced it will be producing a competitor to the iPad, which it claims is more advanced and will sell at 1/2 the price, for a soon to be disclosed customer - or even a newly formed subsidiary of Foxconn-  and that it has received orders for production of 50 million of these devices for the month of February alone.


***Onion (or not?) Breaking News***

Wed, 02/15/2012 - 16:13 | 2163191 Ahmeexnal
Ahmeexnal's picture

China to NATO: mess with Syria, and AAPL goes back to 200.

Wed, 02/15/2012 - 15:17 | 2162937 blunderdog
blunderdog's picture

Live by the writ, die by the writ.

Apple stole the name "iPhone" from Compaq awhile back, and of course given due process in our corrupt legal system, they totally overpowered the Compaq lawyers and had it awarded to them for free.

Facing the same situation in China on the other side of the docket.

It would be funny if--aw, hell--it IS funny.

Wed, 02/15/2012 - 14:16 | 2162677 RSloane
RSloane's picture

A lot of surprised economists doing the pee pee dance - unexpectedly!

Wed, 02/15/2012 - 14:16 | 2162678 HelluvaEngineer
HelluvaEngineer's picture

Better crash than expected.

Wed, 02/15/2012 - 15:05 | 2162882 SheepDog-One
SheepDog-One's picture

No one I tells ya!

Wed, 02/15/2012 - 14:05 | 2162608 junkyardjack
junkyardjack's picture

The whole market just took a dump, another fat finger?

Wed, 02/15/2012 - 14:06 | 2162615 Bold Eagle
Bold Eagle's picture

AAPL is the market these days...

Wed, 02/15/2012 - 14:16 | 2162676 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Black boxes are the market these days, and AAPL is their #1.

Wed, 02/15/2012 - 14:06 | 2162618 nevadan
nevadan's picture

Perhaps the fickle finger of fate.....

Wed, 02/15/2012 - 14:12 | 2162647 Manthong
Manthong's picture

LOL..  TD's had to have that 3rd law headline on a sticky note just waiting. :-)

Wed, 02/15/2012 - 14:12 | 2162651 Awakened Sheeple
Awakened Sheeple's picture

EURUSD at session lows too

Wed, 02/15/2012 - 14:41 | 2162781 Randall Cabot
Randall Cabot's picture

When Stolper talks people listen.

Wed, 02/15/2012 - 14:06 | 2162616 fuu
fuu's picture

QQQQ more!

Wed, 02/15/2012 - 14:17 | 2162683 RSloane
RSloane's picture

I think you meant QEQEQEQE moer!

Wed, 02/15/2012 - 14:06 | 2162617 UGrev
UGrev's picture

China asked to ban exports of iPad due to trademark dispute.. could that have anything to do with it?

Wed, 02/15/2012 - 14:06 | 2162620 monopoly
monopoly's picture

And it is about time. AAPL is a great company, but all, all parabolas collapse. That is a fact. And as Tyler advised AAPL IS the market. And there is no freaking market anymore, just machines and inmates running the books.

Wed, 02/15/2012 - 14:13 | 2162656 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Apple benefitted from people not paying their mortgages, student loans, and credit card debt to buy iProduct.

The next wave of this Depression will leave no fiat to be squandered on useless toys.

Wed, 02/15/2012 - 14:20 | 2162696 Conman
Conman's picture

Dont forget that Apple's entire profit margin is on the backs of the masses of chinese living in campuses)shitholes) year round 24/7 (subtract the week they try to go home for lunar new year). think of that the next time you multitouch yourself.

Wed, 02/15/2012 - 14:23 | 2162705 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Thank you NAFTA!

Wed, 02/15/2012 - 16:15 | 2163204 Ahmeexnal
Ahmeexnal's picture

Is China in North America? You seriously need to go back to third grade to get some basic geography lessons.

Wed, 02/15/2012 - 14:23 | 2162711 junkyardjack
junkyardjack's picture

There's always more countries around willing to make their people into slaves for a dollar

Wed, 02/15/2012 - 16:20 | 2163224 scatterbrains
scatterbrains's picture

With all these Chinamen throwing themselves off Foxcom roof tops where's Joe Stack.. Chinese version ?

Wed, 02/15/2012 - 14:48 | 2162802 Scisco
Scisco's picture

No not all parabolas collapse. Still waiting for Gold price in Zimbabwean dollars to come back. Not holding my breath.

Wed, 02/15/2012 - 14:08 | 2162626 YesWeKahn
YesWeKahn's picture

Polusi and Gore will ask the congress to order the SEC to ban on short sell of AAPL.

Wed, 02/15/2012 - 14:09 | 2162628 Dr. Engali
Dr. Engali's picture

And with that the short is squeezed out.

Wed, 02/15/2012 - 14:09 | 2162630 Squid Vicious
Squid Vicious's picture

 but, i heard they're coming out with a TV... and a new "smart" phone and a new maxi-pad...?? surely this has more room to run???

Wed, 02/15/2012 - 14:17 | 2162682 scatterbrains
scatterbrains's picture

comes in a set with i-poop  for those times.. should really "spike" the stock

Wed, 02/15/2012 - 14:10 | 2162638 Dr. Engali
Dr. Engali's picture

Last one out is a rotten egg.

Wed, 02/15/2012 - 14:11 | 2162640 digalert
digalert's picture

Damn, ZH called it again

This morning was AAA...

All About Apple

Wed, 02/15/2012 - 14:11 | 2162644 RobotTrader
RobotTrader's picture

First items sold if there is "trouble" out there:  PM's and overextended IBD Mo-Mo names


First items bought:  TLT, TIP, MUB, UUP

Nothing has changed.

Wed, 02/15/2012 - 14:37 | 2162759 kito
kito's picture

robo youre outstanding insight based on obvious market history is amazing, jaw dropping.................

Wed, 02/15/2012 - 14:48 | 2162803 EscapeKey
EscapeKey's picture

To Keynesians, "history" means all time since 1971.

Wed, 02/15/2012 - 15:06 | 2162889 SheepDog-One
SheepDog-One's picture

Funny how he can never get the future right though.

Wed, 02/15/2012 - 14:45 | 2162796 GovtMediaLiars
GovtMediaLiars's picture

Uh, PM's are up?

Wed, 02/15/2012 - 14:54 | 2162828 TheFourthStooge-ing
TheFourthStooge-ing's picture

The value in RobotTrader's comments is that he consistently delivers the most representative example of the view from behind the blinders.


Wed, 02/15/2012 - 14:12 | 2162648 boogerbently
boogerbently's picture

It was reported 400% made on AAPL "calls" in 30 minutes. The ONLY way you MAKE that 400% is by selling.

LOTS of SELLING equals price drop.

Wed, 02/15/2012 - 14:13 | 2162653 hotkarlandthecl...
hotkarlandtheclevelandsteamers's picture

Reggie predicted it, he called it, what a great team of analysts he has.  Waiting of him to come out with the post letting us all know he predicted the rebalancing.

Wed, 02/15/2012 - 14:14 | 2162658 machineh
machineh's picture

Check the minutes of the last meeting -- 'Nasdaq 5000' on 10 March 2000 -- and what happened afterward.

Like Lucy yanking the football away from Charlie Brown, they play this gag over and over on the 'stock market that was shut down by squirrels.'

Wed, 02/15/2012 - 14:15 | 2162666 Dr. Engali
Dr. Engali's picture

Blow off top.

Wed, 02/15/2012 - 15:44 | 2163048 devo
devo's picture

This sums up every stock and SPY/DIA, etc.

Some scary charts out there.

Wed, 02/15/2012 - 14:14 | 2162667 Catullus
Catullus's picture

1342 is next

Wed, 02/15/2012 - 14:15 | 2162671 chancee
chancee's picture

priced in

Wed, 02/15/2012 - 14:21 | 2162688 BORT
BORT's picture

The new data on energy usage is out.  52 week moving average is down again.  Here is 4 week moving average.

Up from last week a bit but still down about 4.6% from last year

Wed, 02/15/2012 - 14:22 | 2162702 hedgeless_horseman
hedgeless_horseman's picture



Who would have guessed those compact fluorescent bulbs would have such a huge effect?

Wed, 02/15/2012 - 14:19 | 2162690 machineh
machineh's picture

Gag me with a tampon:

(Reuters) - Secretary of State Hillary Clinton has been in discussions with the White House about leaving her job next year to become head of the World Bank, sources familiar with the discussions said on Thursday.


Wed, 02/15/2012 - 14:21 | 2162699 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

What'd you expect?  They'd hire Jim Grant?

Wed, 02/15/2012 - 15:01 | 2162864 machineh
machineh's picture


The only way Jim Grant will ever make it into the World Bank is in a UPS uniform.

What can brown do for you??

Wed, 02/15/2012 - 14:25 | 2162721 Schmuck Raker
Schmuck Raker's picture

Larry Summers is also being mentioned.....super-size that tampon.

Wed, 02/15/2012 - 14:21 | 2162701 Waterfallsparkles
Waterfallsparkles's picture

That is exactly what I was thinking that the NASDQ needed to be rebalanced so that the entire Nasdq was not just Aapl.  Time to reduce Aapls percentage so just one stock can move the entire index.

Wed, 02/15/2012 - 14:22 | 2162703 Atomizer
Atomizer's picture

The Apple Doesn't Fall Far from the Decomposed Tree

Wed, 02/15/2012 - 14:23 | 2162712 f16hoser
f16hoser's picture

Dollar SWAP's is the new QE! Bureaucratic word games for dumb Americans.

Wed, 02/15/2012 - 14:25 | 2162717 rsnoble
rsnoble's picture

Don't forget this could just be options X bullshit games. Too early to tell on just 1 day. And the POS was due for a pullback anyhow. 20bux is nothing on a $500 stock.

Wed, 02/15/2012 - 14:28 | 2162728 El Oregonian
El Oregonian's picture

Didn't Eve also like Apple?

Wed, 02/15/2012 - 14:31 | 2162742 ZeroPower
ZeroPower's picture

AAPL bouncing from the lows even as Mac Rumors now reports that iPad 2 has been pulled from Amazon China


This is *not* what is moving the stock today - that news was out yesterday. Apparently some no name firm out of Taiwan holds the original patent to 'iPad' and so CN regulators allowed the removal of any such aapl product from shelves.

Wed, 02/15/2012 - 14:42 | 2162783 Conman
Conman's picture

Ya, and cisco owned the name iphone. In fact I have the cisco iphone in my office somewhere. AAPL will pay them off and we can continue the AAPL march to 700

Wed, 02/15/2012 - 14:32 | 2162744 Roy T
Roy T's picture

It feels like the afternoon is setting up nicely for a 3:30 rumor from the European Finance ministers conference call.

Wed, 02/15/2012 - 14:39 | 2162765 Randall Cabot
Randall Cabot's picture

Surely somebody's going to confirm that somebody else is intending to deliver something after he intends to sign something.

Wed, 02/15/2012 - 14:51 | 2162813 Conman
Conman's picture

Or Reuters will just reprint the samaras rumor from yesterday. Wait, wasn't he personally supposed to hand over an agreement in the morning(greek time) Hmmm should someone subpoena Reuters for their source on this one that juiced the markets by about 1%? Nah, why bother with that.

Wed, 02/15/2012 - 14:32 | 2162745 The trend is yo...
The trend is your friend's picture


Wed, 02/15/2012 - 14:42 | 2162785 kito
kito's picture

apple is having the same problem every other u.s. corp is having.....getting their foot through the door......china is just waiting for the day they no longer need american products and american debt..........

Wed, 02/15/2012 - 14:44 | 2162791 Conman
Conman's picture


Wed, 02/15/2012 - 14:53 | 2162826 devo
devo's picture

We have a winner. US cannot win a war (physical or currency) with China, so China can make their own Iproducts on their black market for 1/4 the cost. The Apple/China story is Statist, bullish shills being Statist, bullish shills. There will be some growth in China, but not what the ever optimistic analysts are projecting.

Wed, 02/15/2012 - 15:10 | 2162910 Bunga Bunga
Bunga Bunga's picture

I doubt that. Although devices like tablet computers or smartphones are assembled by cheap Chinese labor they depend on parts coming from US, European, Japanese and Korean manufacturers.







Wed, 02/15/2012 - 16:25 | 2163243 object_orient
object_orient's picture

What's stopping China from importing semiconductors? Apple, like Walmart, squeezes the margins of suppliers and manufacturers, skewing profits toward the retail end. Why shouldn't a Chinese company compete where the real money is?

Wed, 02/15/2012 - 14:51 | 2162817 Catullus
Catullus's picture

A lot of people running to the short side. Nothing is broken yet. This pig is going green again by the end of the day.

Wed, 02/15/2012 - 14:55 | 2162831 devo
devo's picture

All pigs go green by the end of the day. Haven't you heard?

Wed, 02/15/2012 - 14:57 | 2162837 Dermasolarapate...
Dermasolarapaterraphatrima's picture

Mini tech Bubble about to meet a Pin.

Wed, 02/15/2012 - 15:03 | 2162871 rsnoble
rsnoble's picture

Soon burritos will be just as important as i gadgets:

At least you can eat that investment. LMAO.

Wed, 02/15/2012 - 15:08 | 2162899 Mamzer Ben Zonah
Mamzer Ben Zonah's picture

The love that dare not speak it's name.

Wed, 02/15/2012 - 15:10 | 2162911 Mr_Wonderful
Mr_Wonderful's picture

The market is extremely overbought and bullish which means that it´ll be looking for excuses to sell. That FED statement that QE3 isn´t needed or forthcoming (has been obvious for months really) seems very welcome.

Wed, 02/15/2012 - 15:14 | 2162929 onebir
onebir's picture

Newton Is Back As Apple Finally Falls

Funny on so many levels:

Wed, 02/15/2012 - 15:24 | 2162967 pleseus
pleseus's picture

Kinda looks like silver from last year.  Where's silver now.

Wed, 02/15/2012 - 15:26 | 2162972 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Apple is one for the history books. A perfect example of a huge bubble. Watch what happens when the dominos start falling and takes Apple down with it. It will be pretty ugly.

Wed, 02/15/2012 - 16:08 | 2163141 carbonmutant
carbonmutant's picture

Dropping AAPL showed the market that "there was no there there"....

Wed, 02/15/2012 - 16:11 | 2163182 caerus
caerus's picture

parabolic moves never end well

Wed, 02/15/2012 - 16:47 | 2163350 I am a Man I am...
I am a Man I am Forty's picture

oh shit!  apple is back to where it was 2 days ago.

Wed, 02/15/2012 - 18:52 | 2163904 Mr_Wonderful
Mr_Wonderful's picture

Apple has good stuff but I would never buy it new because it´s both overpriced and overissued. The second-hand market is therefore excellent already  and I have an Ipod 4G for $150 and am waiting for Ipad 3 when I can pick up an Ipad 2 for maybe $100-150. Once these gadgets have been jailbroken they are actually quite usable.

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