AAPL < $600

Thus far my gut feeling about AAPL underperforming the market has been right on as it broke the important $600 level. I had believed that the disappearance of AAPL from Dan Loeb's top 5 holdings would encourage other hedge funds to do the same, that is dump AAPL and I believe that is exactly what they have been doing.

From an article this morning from ZH,

"Volume picking up rapidly as the hedge fun horde starts to find exit doors are smaller than they hoped for..."


This i exactly what I suspected and why AAPL is the kill switch for the market, if Hedgies are moving out of AAPL, they are likely moving out of everything-just look at last night's Market Breadth post, the numbers don't lie.


On a short term basis, the volume dump below $600 gives the market a chance to pick up AAPL on the cheap and try to bounce it toward wherever its VWAP may be at this point and then start selling it again. Typically they don't need too many shares to get a bounce moving, they just have to make it look convincing enough for the AAPL lovers (not traders) to think AAPL is a bargain here. I wouldn't be surprised to see research reports that say AAPL is going to $800 to help the effort out.

 Here the $600 level is broken on volume and the lower support line of what looks to be a broadening top. Note that right after the second support level was broken, downside momentum stopped with a Harami Star candle in white on good volume, this would suggest to me that those dumped shares were picked up on the cheap to sponsor a bounce in AAPL and give the funds more time and a better price to sell/short AAPL.

 The 5 min chart would suggest the same, there's a delicate balance when funds move en masse out of a position, if they all try to squeeze out at once we see what we have seen in AAPL the last week, except it could have been a lot worse. Sometimes they need to take counter trend positions to get a stock back up to a price in which they can start selling again. Should there be a mass panic to get out at once, AAPL could drop a lot worse.

 With a leading positive divergence on the 15 min chart and two important support levels broken, this is exactly the place for a volatility shakeout move to the upside. I have my price alerts set.

 AAPL disappeared from Third Points top 5 holding in March, it looks like the rest of the hedgies followed Loeb.

The 60 min chart is leading negative so badly here, I think APPL is done. That dividend might not have been the best idea at a time like this.