AAPL and the Hedge Fund Hotel

First off, let me say that I WILL be slow on emails today, my first priority is to the entire group of Wolf on Wall Street members, my second is to individual emails as I try to give as much individual support as I can, lastly would be model portfolio trades, so the take away is response times on emails may be slower and if you are specifically waiting for me to make model portfolio trades, I may not have time to do so, you need to understand that if I do not do so it is not because of analysis, it is because of time. As usual, I post all model portfolio trades BEFORE I make them.

That being said, I have about 15% more to add to my AAPL equity short position which is at a gain already. I'm hoping for a great move in AAPL that takes out the post earnings highs, the trouble with AAPL specifically is the institutional positions in AAPL are so large that these hedge funds that all copy or follow the leader, are all doing the same thing and I'm nearly certain they are all trying to squeeze out the door at the same time. Dan Loeb's fund had AAPL as a top 5 position (usually they don't reveal much more than that) in February I believe, the next month it was not there. Loeb is well respected as a hedge fund manager and other managers are going to take the disappearance of AAPL as a sell signal. So AAPL will be under immense pressure at any strength as these positions are probably some of the largest out there.

Again, AAPL is a stock that you don't want to get lost in the lines with. I'm hoping for the best, I already have a decent size position in the model portfolio there and I don't need to add, so I'm kind of holding out for a great entry, but if it looks like a certain level is all I can get, then I'll be forced to fill in the rest of the position. Right now I'm still patient and hoping for a good move, you just have to understand AAPL is unique in that its size (and position sizes) mean any strength will be used to exit/short the stock.

The other thing to consider is this and I don't have data suggesting it, its just a gut feeling, Europe is a drag on any bounce with their macro data, while I can't say I'm expecting this bounce to reverse today, tomorrow when Europe is open it will likely be a drag on any bounce, just something to keep in mind.

Here's the AAPL update.

 AAPL not that impressive today, but not too far out of line with the broad market.

 1 min chart, this looks like the work of the hedge fund hotel.

 From where accumulation first tarted we can see it was higher, that IS NOT the average accumulated position, you have to average that area as well as the moves lower, so exactly where break even would be is hard to determine, but my gut would tell me that it would need to be higher. I'm not punting on this, I'm just being honest the way I se it, the "Every man for himself" mentality is probably strongest in AAPL, so the typical move that is well above the first accumulated area may not be a reasonable expectation, I do remain patient though for now.

The 2 min chart shows a SHARP leading negative on any strength from today.

 The 3 min with less noise shows clearly what is going on in AAPL as they get this gift of a bounce.

 The 5 min which looks stronger because of the accumulation period is already seeing a leading negative type divergence, so there apparently is a lot of distribution in AAPL. If the hedgies acted as a collective, they'd let AAPL go higher before selling/shorting as it would be to all of their advantage, but  very high paying management jobs are on the line, thus the "everyman for himself" attitude toward AAPL.

 The 15 min chart is just longer it takes longer for the divergences to accumulate there. Where it stands now tells me we can't rule out a bigger move.

 Since the capture of this chart with 2 support zones, the first has been taken out, volume jumped a bit as you can see as it was just being hit. The second thus far is holding and AAPL is caught between them. The move below the first zone could give AAPL a little boost and a brief move below the lower support zone could do the same, however breaking below the second zone starts to get touchy for AAPL's gains.

 This is the bigger picture, the parabolic move up, this is a weekly chart. These parabolic moves almost always fail spectacularly and AAPL's has already started on the 5 day chart. Keep the bigger picture in mind.

Also bigger picture is the horrendous 60 min leading negative divergence right at the AAPL top.

Point being, "Don't get lost in the lines". I'm willing to give AAPL some room and time, but I wouldn't miss the trade because I didn't get a new high above the earnings high.