Stocks Stumble Despite AAPL's Best Efforts

Tyler Durden's picture

Not even the almighty power of AAPL could bring to bear a positive end to the day for the S&P 500 or the Dow. Most notably, the Dow Transports are now -2.3% from the highs last Tuesday and diverging aggressively lower. Volume was simply incredibly low today (with London close) in NYSE and S&P 500 e-minis where volume was its lowest of the year by a long-way. VIX soared today, up over 1.2vols to 16.4% with some major put-spread buying in SPY. The afternoon weakness in gold, silver, stocks broadly (and specifically Materials, Industrials, Discretionary, and Financials) tend to indicate a QE-off move but Treasuries (which rallied 2-4bps) were largely unmoved in the afternoon. The USD limped higher also (QE-off) all afternoon but ended the day practically unchanged with AUD weakness the standout. Oil was volatile as Isaac was downgraded, cracks were arb'd, and SPR-release rumors swung it around - though the economically-sensitive commodities all clustered together at the close around -0.5%.

The Nasdaq is very modestly red from the highs last week (but AAPL helped it close slightly green today) but the divergence with the Transports is incredible...


as AAPL held its gains from after-hours Friday - but notably saw major VWAP-selling pressure today...


and from last week's highs, only Healthcare is positive with Materials and Industrials down notably...


Commodities seemed to converge around -0.5% by the close...


There was some very large Put Spread buying in SPY today (h/t @OpInterest) in the 130/140 strikes - given chatter and relative price moves, it appears these were Bear Put Spread purchases in ~100k lots (or 10mm SPY shares or $1.4bn notional exposure) - suggesting someone in size is less than positive on the next few weeks (especially to do this trade on an illiquid day like this)...


Across the capital structure, stocks got a little ahead of themselves early on but reconnected with rates/vol/credit and 'plunged' together into the close. Risky assets in general were weak but Oil's drop and Treasuries rallying had a much bigger impact than stocks did...


Charts: Bloomberg and Capital Context

Bonus Chart: Little known, yet very sensitive to the economy - specifically housing and construction - Ritchie Bros auctioneers has been diverging significantly from the homebuilders since the end of LTRO2. It would appear that with all this hopeful home-building that is anticipated, they will be doing it all by hand with no need to buy/sell heavy equipment...


Bonus Bonus Chart: What do stocks know that inflation breakevens do not - it seems the hope is beginning to fade from equities up here as they diverge lower from the highly correlated 10Y break-evens (and gold catches up to them)...

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Jlmadyson's picture

No fear RBOB up 8 cents on the day. $4 nationally here we come and if Bernake prints next month well hold on boys and girls.

The perfect storm.


Jlmadyson's picture

Oh yes Timmy G wants out of this place ASAP. He'll be lucky to make it out before it hits the fan however.

He will try everything possible to stave off the debt ceiling breach however.

And I mean anything.

falak pema's picture

How do you walk away from the greatest heist in  a hundred years and look people in the face when they show you their empty pockets, while you sing : I really did my best. I have nothing to reproach myself. This thing went sour on us because the Europeans didn't play the game right. We were doing ok printing and all...

walküre's picture

That's exactly how I picture Timmy G "singing" when he's walking to the gallows.

The day will come when all these shysters face the rope. It will be swift and without much fanfare. No tears shed and sorry, no opportunities to throw your shoes at either Timmy G or Bennie B.

slewie the pi-rat's picture

we're americans f_p!

we thrive on guilt!

Assetman's picture

Makes sense... Goldman does have really good security.

HaroldWang's picture

AAPL up keeps markets from falling; keeps MSM posting "economy is good" stories; keeps Obama as president. 

And why was AAPL up? They won a huge patent suit. Imagine had they lost. Actually we all know there wasn't a chance in hell it would have lost. Otherwise, the dominoes fall and Obama left in the cold. Interesting...

Assetman's picture

Can't wait to see how many $399 iPhones AAPL 'sells' in China this quarter.  It will be 'enough' to meet expectations-- though there might be one for every GM car in (excess) inventory there.


Conman's picture

AAPL is a roach motel. Shake it a little and they will all come scurrying out. AAPL will miss again next earnings since iphone 5 sales wont be in it.2 misses in a row should cause some selloff.

spastic_colon's picture

AAPL's best efforts include killing all domestic competition through the courts in order to combat falling global sales (e.g. China market share down 50%).....that is their new marketing strategy


PS - AAPL one of the main reason markets were not down their "efforts" weren't totally wasted

machineh's picture

Why no posts at ZH on the result of the Apple/Samsung patent lawsuit?

I guess we're waiting for Reggie Middleton's latest takedown of the Evil Empire of Cupertino.

As one commenter on Engadget said, 'A billion dollars for a rectangle with round corners. EPIC.'

Sokhmate's picture

As you all know, a pyramid shaped tablet does not sell

(ask Dwight Schrute)

RobinHood73's picture

That Nasdaq 20% threshold weight in AAPL is getting breached again.

fonzannoon's picture

pretty interesting article on front page article.


like very interesting

monoloco's picture

The aapl shorts have been awfully quiet lately.

ar01's picture

Couldn't the housing ETF graph spread be explained solely by declining market share by Ritchie Bros?

q99x2's picture

No need for QE. Central banking cartel fully jacked in to indexes.

'suggesting someone in size is less than positive on the next few weeks'

It wasn't me. I'm only short because I don't want the market to collapse and if I'm short I pretty much know the market will go higher.

Son of Loki's picture

All those"up" graphs and arrows...reminds me of the FHA mortgage default rate on those 3.5%,  30 year never-to-be-paid-back loans.

adr's picture

Maybe Apple can get a patent for QE3 and then be able to grow their market cap to $15 trillion.

Seeing The Cupertino Cult going down will be the new greatest day of my life.

I am a Man I am Forty's picture

Your priorities are messed up.

slewie the pi-rat's picture

bear put up a $1.4B put

the market was illiquid?

so that means they put on both sides with themselves?

that would fun to play with wouldn't it?

the earlOfMorningwood may be running the barn on this

these put spreads can also pay in an up market or period

it simply 'depends' on the option-pricing action across the underlying price variance over time

Ted Baker's picture