"This is a speculative, short duration position, I'm not crazy about longer term AAPL positions right now in either direction, but I think near term there's a decent scalp I'm going to open in the options tracking portfolio, AAPL June Standard $625 Puts, full size.
I'm not using as much time because I'm viewing this as a shorter term scalp-like trade."
AAPL has their WWDC (Worldwide Developer Conference), one of their biggest events of the year Monday June 2nd. Their 2013 event on June 10th saw an immediate 10% draw down over the next 2 weeks or so and the June 11 2012 event led right in to the Sept 2012 top in which AAPL lost nearly half of it's value over the next 8 months or 390 points.
To me, this looks like a buy the news, sell the event situation, but on a scalp basis, I'm not convinced by longer term charts as the 30 min is ugly, but the 60 min hasn't turned yet. The other issue, once Tim Cook took over, AAPL's products seem to go from revolutionary to evolutionary and they still lag some of their biggest competitors in handsets, something changed with the loss of Steve Jobs.
Another interesting event that happened to MSFT which was a major growth stock in to 2000, was once they declared a dividend and share buybacks, the growth story in MSFT ended, for instance...
MSFT gaining at least 18,000% over this period, then came the dividends and the growth story ended as MSFT became a blue chip and largely a ranging stock.
AAPL also was a super growth story with at least a +6000% gain over this period in to the 2012 top which we called right on the head, this is still a sore spot for me as I had a nice short and closed it thinking I'd get a little better positioning on a bounce, then the Third Point 10Q came out and all of the hedgies saw AAPL was no longer a top 5 holding for Dan Loeb, immediately all of the funds tried to exit at the same time driving AAPL down -45% or -390 points over a short 8 month period, THIS IS THE HERD MENTALITY THAT IS PRESENT EVEN IN HEDGE FUNDS/SMART MONEY.
Since the Sept. 2012 top, AAPL has retraced a very significant portion of the decline, well over the 66% retracement level,
As well as clearing some strong overhead resistance.
Today's daily candlestick is a DOJI, an indecision candle which is taken as a bearish possible reversal candle as the previous momentum has faded. If this candle closes today with significant volume (above yesterday's), the probabilities go way up that it is an effective downside reversal candle which may be the case with the WWDC Monday if it disappoints. Really the market is about perception, it doesn't matter what you did, it matters what the market's perception of what you will do moving forward is and judging by AAPL's earnings and where their revenue is coming from, the Iphone better make a big impression as Ipads missed and Macs account for so little in sales.
As for the 3C charts...
This is the intraday 1 min
The 3 min that looks like some larger sellers were already busy selling in to strength as they had theopportunity.
The 5 min leading negative
And 10 min leading negative.
The reason I put this out as a "scalp-like" trade idea is the longer charts are indecisive.
The 30 min chart shows clear accumulation which we had seen and were wondering whether it was a counter-trend bounce brewing or something bigger, shortly after Icahn had come out and said he had been accumulating a stake in AAPL that was quite sizeable.
The current 30 min divergence is leading negative, based on this I'd consider AAPL for a longer term core position play, maybe a 150 point decline, the trouble is...
While the 4 hour chart shows the same large accumulation at the exact same spot, it is not showing the same level of distribution.
I think long term probabilities are AAPL moves lower, this is based on the daily chart...
AAPL daily negative at the 2012 top, and leading negative now. Not only that, but the Tech Sector looks bad as well.
Daily 3C chart of XLK.
I think the larger issue near term for anything longer than a trade in AAPL on the short side is this...
There's no reversal process in place.
In 2012 we had a "V" shaped reversal event in AAPL, but this was after 6 solid months of distribution on a large scale , likely Dan Loeb selling his stake. However, that "V" event was what I'd call "fundamental news", it was a panic of all the hedge funds trying to exit at once as they saw Dan Loeb no longer held AAPL in the top 5 holdings and while 99% of hedge funds are the herding type, a few strike out to try to generate larger profits for their clients, Dan Loeb is one of them (Third Point) and as such, he's a leader for other hedgies who wanted to quickly get out of AAPL, you can see the result of not selling in to strength over a longer period, AAPL crashed and lost nearly half its value in 8 months.
As a speculative scalp/short term trade, I'd still consider AAPL a short here despite Monday's wildcard event, I think though it is important to have enough time on any put options, or look at an AAPL short equity position.
Watch out for VXAPL, volatility is rising in to Monday's event and with it the premium on options.
To me, this looks like a buy the news, sell the event situation, but on a scalp basis, I'm not convinced by longer term charts as the 30 min is ugly, but the 60 min hasn't turned yet. The other issue, once Tim Cook took over, AAPL's products seem to go from revolutionary to evolutionary and they still lag some of their biggest competitors in handsets, something changed with the loss of Steve Jobs.
Another interesting event that happened to MSFT which was a major growth stock in to 2000, was once they declared a dividend and share buybacks, the growth story in MSFT ended, for instance...
As for the 3C charts...
The reason I put this out as a "scalp-like" trade idea is the longer charts are indecisive.
The current 30 min divergence is leading negative, based on this I'd consider AAPL for a longer term core position play, maybe a 150 point decline, the trouble is...
I think long term probabilities are AAPL moves lower, this is based on the daily chart...
I think the larger issue near term for anything longer than a trade in AAPL on the short side is this...
In 2012 we had a "V" shaped reversal event in AAPL, but this was after 6 solid months of distribution on a large scale , likely Dan Loeb selling his stake. However, that "V" event was what I'd call "fundamental news", it was a panic of all the hedge funds trying to exit at once as they saw Dan Loeb no longer held AAPL in the top 5 holdings and while 99% of hedge funds are the herding type, a few strike out to try to generate larger profits for their clients, Dan Loeb is one of them (Third Point) and as such, he's a leader for other hedgies who wanted to quickly get out of AAPL, you can see the result of not selling in to strength over a longer period, AAPL crashed and lost nearly half its value in 8 months.
As a speculative scalp/short term trade, I'd still consider AAPL a short here despite Monday's wildcard event, I think though it is important to have enough time on any put options, or look at an AAPL short equity position.
Watch out for VXAPL, volatility is rising in to Monday's event and with it the premium on options.
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