APPLE Technicals Behavior -
October 11 ( From TradingView )
October 11: Volatility Seasonals: Lower Volatility Ahead ?
The Month of October is also very special in terms of Seasonalities for Volatility
as the whole Market is quite choppy mainly til October 15th.
SO high Volatility til mid-month of October and fade for SP500 Index VIX Index.
See the chart below.
So in summary, I think the market is coming from a volatile environment and Volatility Premiums are too high getting into October 27 Q4 Earnings Release.
Already the price action of Apple Shares ( Range Pattern ) of last week tell me that Volatility is on the expensive side.
So in that market scenario, we cant be long term Options Premium especially after October 15th.
So after that point, better play spreads options to protect falling volatility, IF history repeat itself for sure...
Stay tuned as I will update you in the Daily as usual for specific trading levels on Apple Shares...
Daily Chart- Seasonalities- Relative Daily Performance Index in % of Apple Shares vs SP500 Index
- Average of the past 5 years - October 1st pegged at 100
( See chart below )
Daily Chart - Seasonalities - Daily Performance Index in % of Apple Shares Volatility VIX from CBOE
- Average of the past 5 years
October 1st pegged at 100
( See chart below )
Daily Chart - Seasonalities - Daily Performance in % of SP500 Index Volatility Index VIX from CBOE -
Average of the past 5 years
- October 1st pegged at 100
.( See chart below )
For Apple, the same trend with more downshift as shown byt the chart below.
But in fact, what it is important for us to know is the Relative Underperformance of Volatility of Apple Shares that historically start on October 18 til October 31 according to the past 5 years as shown by the chart below.
Relative Volatility VIX between AAPL Stock and SP500 Index ( Daily Candle Chart )
RV closed on October 9 at 2.19, well above it s 200 DMA at 1.88. and pure Volatility closed at 37.5% last Friday, level well above its 200 DMA at 30.6% as shown by the 2 charts below.
What I am telling you is that Volatilty and Relative Volatility is on the expensive side considering the Seasonality in October. SO Lower Volatility Trend means it is becoming risky to be long Volatility Premiums
on long term options getting past October 15th.
The Weekly October 16 2015 112 Straddle ( Long Call and Long Put ) closed last Friday at $2.76 and
The Monthly April 15 2016 110 Straddle ( Long Call and Long Put ) closed last Friday at $19.62 and
I will follow those straddles this week...
Daily Chart - CBOE Apple VIX