- Apple’s Flash Dump In The Last Second Of Trading Caught On Tape (ZeroHedge, Jan 25, 2013):
Sure, the retail “investors” are coming back into the “markets”… They are coming back in shifts. And just so they know what to expect, here is what happened to Apple stock in the last second of regular trading today, courtesy of Nanex. Unlike traditional flash crashes where the trade is an HFT error, or a few shares traded through the entire bid or offer stack, in this case it looks like a very premeditated unloading of some 800K shares (some $350 million worth) of AAPL in the last second, with the full knowledge it was shake the market. Why anyone would want (or wait until the very last second) to do that, while covering the offsetting ES short in the pair trade, to ramp the market into the close, is anyone’s guess.
- Apple Is No Longer The World’s Most Expensive Company (ZeroHedge, Jan 25, 2013):
Irony of all ironies; on the 1-year anniversary of AAPL replacing XOM as the world’s most-expensive market capitalized company, the incessant fall of the formerly invincible has dragged it back below XOM once again. This one-year of glory is disappointing as when MSFT managed to top XOM in 1998, it held on to the top-spot for almost 3 years before relinquishing it back to the company that runs the world’s most valuable limited resource.One-year on – and AAPL is now less than XOM once again…
- Goldman Sachs And The Big Hedge Funds Are Pushing Leverage To Ridiculous Extremes (Economic Collapse, Jan 14, 2013):
As stocks have risen in recent years, the big hedge funds and the “too big to fail” banks have used borrowed money to make absolutely enormous profits. But when you use debt to potentially multiply your profits, you also create the possibility that your losses will be multiplied if the markets turn against you. When the next stock market crash happens, and the gigantic pyramid of risk, debt and leverage on Wall Street comes tumbling down, will highly leveraged banks such as Goldman Sachs ask the federal government to bail them out? The use of leverage is one of the greatest threats to our financial system, and yet most Americans do not even really understand what it is. The following is a basic definition of leverage from Investopedia: “The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.” Leverage allows firms to make much larger bets in the financial markets than they otherwise would be able to, and at this point Goldman Sachs and the big hedge funds are pushing leverage to ridiculous extremes. When the financial markets go up and they win on those bets, they can win very big. For example, revenues at Goldman Sachs increased by about 30 percent in 2012 and Goldman stock has soared by more than 40 percent over the past 12 months. Those are eye-popping numbers. But leverage is a double-edged sword. When the markets turn, Goldman Sachs and many of these large hedge funds could be facing astronomical losses.
Sadly, it appears that Wall Street did not learn any lessons from the financial crisis of 2008. Hedge funds have ramped up leverage to levels not seen since before the last stock market crash. The following comes from a recent Bloomberg article entitled “Hedge-Fund Leverage Rises to Most Since 2004 in New Year“… Continue reading »
- AAPL Trades Under $500 For First Time In 11 Months (ZeroHedge, Jan 14, 2013):
While the furious defense of $500 the second AAPL crossed under the psychological barrier – the first time it did so in regular trading since February 15, 2012 – was promptly launched as otherwise the hedge fund community, which as we reported two weeks ago, and as Bloomberg caught on today, is more levered and long than at any moment in the past 9 years and is mostly invested in AAPL, we expect this intervention to eventually succumb to the inevitable French military campaign conclusion, as not even every HFT algo programmed to lift every offer under $500 can delay the inevitable arrival of a very sad cashflow reality. As for the Bank of Israel which is now about 5% underwater on its AAPL cost basis: don’t worry – Ben will bail you out too. Continue reading »
- New “Generational Low” For AAPL (ZeroHedge, Dec 14, 2012):
Unless you bought Apple stock before Valentine’s Day this year, you are now underwater. In what must be the best evidence of how quickly a liquidity-fueled over-owned bucket of over-optimistic extrapolation can see sentiment swing violently against it, AAPL just plunged back (on heavy volume) through its previous “generational low” from 11/16/12. At under $505.75 ($505.58), AAPL is at its lowest level since mid-February and is almost 30% off its highs on 9/21/12 as it appears the much poo-poo’d Death Cross may just have been on to something. WWJTD? and do not forget to ask WWDKD?
The two major selling days when the professionals decided now was the time… middle pane – huge average trade size…
- AAPL Suffers Biggest Market Cap Loss Ever (ZeroHedge, Dec 4, 2012):
It seems like it was only yesterday when we were praising the miraculous 4 sigma move in AAPL stock, when it soared by nearly $40 in one trading session. It wasn’t: it was November 19. Which is why it probably shouldn’t be surprising that two short weeks later AAPL stock has just seen its biggest dollar fall in absolute terms in history, down $37 dollars or nearly 7%, its biggest one-day percentage drop since September 2008. Why? Nobody really knows, but when the world’s biggest company by market cap trades increasingly like a penny stock, does anyone really care?
In absolute terms, AAPL has lost nearly $35 billion in market cap in several hours today: more than the market cap of BlackRock, Morgan Stanley or Wal-Green, with no real material news except for the occasional weak order hearsay (which one didn’t really need considering the US and global consumer is totally tapped out), and various other rumors. One thing is certain: the 240+ hedge funds who owned the stock as of September 30, and which did their best to paint the tape for November, are now at a complete loss what to do to delay what was certainly going to be a redemption avalanche for the second month in a row.
Histogram of $ moves in AAPL stock in the past two years: Continue reading »
- All US Equity Markets Closed Monday (And Maybe Tuesday) Due To Sandy (ZeroHedge, oct 29, 2012):
Late Updates – after a day of consultation and realization that if the algos were left alone to play then things could go a little pear-shaped – NYSE and NASDAQ will now be totally closed tomorrow:
- *U.S. EQUITY MARKETS TO CLOSE ON OCT. 29 FOR STORM, SEC SAYS
- *NEW YORK STOCK EXCHANGE TO CLOSE MARKETS FOR STORM
- *NASDAQ OMX MARKETS CLOSED TOMORROW ON HURRICANE SANDY :NDAQ US
- *CBOE TO CLOSE EXCHANGES OCT. 29 BECAUSE OF HURRICANE SANDY
“In consultation with other exchanges and market participants, NYSE Euronext will close its markets on Monday, Oct. 29, 2012 and pending confirmation on Tuesday, Oct. 30, 2012’’
“We support the consensus of the markets and the regulatory community that the dangerous conditions developing as a result of Hurricane Sandy will make it extremely difficult to ensure the safety of our people and communities, and safety must be our first priority’’
“We will work with the industry to determine the next steps in restoring trading as soon as the situation permits’’
Add to this, SIFMA’s recommendation that bond markets close at midday – which is all a little moot given MTA’s closure and tomorrow looks like being a busy day for the European desks…
- Hurricane to close Wall St on Monday, possibly Tuesday (Reuters, Oct 29, 2012):
U.S. stock and options markets will be closed on Monday and possibly Tuesday, the exchange operator said, going back on a plan that would have kept electronic trading going on Monday.
As Hurricane Sandy bears down on the New York area, regulators, exchanges and brokers grew increasingly worried about the integrity of markets and the safety of employees.
It will be the first time the market has closed for a weather-related event since Hurricane Gloria on September 27, 1985.
- Wall Street shuts for storm; trading may not resume until Wednesday (Los Angeles Times, Oct 28, 2012):
As Hurricane Sandy barrels down on the East Coast, Wall Street is shutting down.
This would be the first time trading has been halted in all U.S. stocks since a four-day stretch after the Sept. 11, 2001, terrorist attacks.
- AAPL Reality Sinks In Sub-$600 As Option-Overlays Lifted (ZeroHedge, Oct 26, 2012):
In english this looks like this:
- Managers were grossly over-weight (in their books) AAPL
- Wanted to reduce weight as AAPL’s weight in index reached peak levels and fundamental cracks started to show
- Last few weeks have seen VWAP sell orders dominating
- BUT – the algos can only clear so much and given the huge breadth of holdings…
- Managers bought Option overlays with both hands and feet (as we noted yesterday) to protect through earnings
- And today – with options open, they are unwinding the protection (implied vol dropping even as stock price plunges) and reducing net long exposure in size (see volume)…
Bottom line – long-only managers will retain exposure (as index trackers) but clearly need to unwind some weight and anyone telling you this is all short-sellers is incorrect – the simple facts of VWAP fades and implied vol dropping suggests its long-exits as the cult of AAPL maybe coming to an end…
- Apple Disappoints (ZeroHedge, Oct 25, 2012):
And so the behemoth misses… again:
- APPLE 4Q EPS $8.67, EST. $8.75 – miss
- APPLE 4Q SALES $36.0B – slight beat
- APPLE SOLD 14.0 MILLION IPADS DURING QTR, UNIT EST. 15.3M
But the uglyness is in the forecast. And this time it is not a low-ball:
- APPLE SEES 1Q EEPS $11.75, , EST. $15.49
- APPLE SEES 1Q REV. ABOUT $52B, EST. $55.07B
Stock halted so keep an eye on the QQQ as a proxy – QQQs imply AAPL $590 here (200DMA is $587)… AAPL will resume trading at 4:50ET
- 230 Hedge Funds Suddenly Cried Out In Terror And Were Suddenly Silenced (ZeroHedge, Oct 25, 2012):
A week after the second most populous hedge fund hotel, Google, blew up, it is now time for good ole’ Hotel Caaplefornia itself. The HF holders table below is presented without comment (as we have said all there is to say many times). Remember: orderly, cool, calm, collected single file procession through the tight exit: and nobody panic!