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APPLE Volatility Technicals - Apple Shares Volatility Behavior Before Q1 ER (Earnings Release) ?
January 24 ( From TradingView, Nasdaq.com, Stockcharts, MarketWatch )
January 24 ( From TradingView, Nasdaq.com, Stockcharts, MarketWatch )
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January 24: Apple Shares Volatility Behavior Before Q1 ER (Earnings Release) ?
Already in Low Relative Volatility (RV) Territory...
This is a research based on the historical behavior prior and after of the
release of Apple Q1 ER that should be published by Apple on January 26.
As usual, when Apple announce the ER date, market start to speculate on
potential earnings well in advance.
But this year, with the iPhone 6 and especially the iPhone 6+,expectations are
already quite high. But as we know, China turmoil this year is adding some nervousness on the forecast.
What I found is quite interesting ( IF history repeat itself for sure ):
1) Taking closing levels for Apple Shares Relative Volatility (RV) 6 Trading Days before and 5 Trading Days after the ER dates ( T=0 on the chart below - bottom scale is January 26 ) of the past 4 years
2) Applying a normalize level in each case at ER Dates with a level at 100 in each case
( See chart below - left scale ).
Chart of Apple Shares RV Normalize at 100 on Q1 ER Days ( T=0 )
( 2012 to 2015 )
So what I found :
1) RV on average of the past 4 years before the event are rising from the 6 trading session to the 4 Trading Days prior of the event on average. Average move from RV from T-6 to T-4 was +3.9% ( Average RV 4 years in orange - chart above )
2) RV on average of the past 4 years before the event is then falling from the 4 trading session to the 2 Trading Days prior of the event on average. Average move from RV from T-4 to T-2 was -3.3% ( Average RV 4 years in orange - chart above )
3) RV on average of the past 4 years before the event is rising from the 2 trading session to the 1 Trading Days prior of the event on average. Average move from RV from T-2 to T-1 was +4.3% ( Average RV 4 years in orange - chart above )
4) RV on average of the past 4 years before the event is then falling from the 1 trading session til 55 Trading Days after the Event a T+5 on average. Average move from T-1 to T+5 was -35.5% ( Average RV 4 years in orange - chart above )
5) Lowest Closing RV on Average of the past 4 years have been 5 Trading Days after to January Event:
So in our case is February 2 . Average return from T-1 to T+5 was -35.5%.
6) Peak RV is the highest at T-1 prior to the event: in our case, will be January 25 2016.
7) From the event plus 1 trading session, RV correction: ( Taking Closing RV as a Proxy of the past 4 years ) is ( in our case January 27 2016 ): So from a normalize 100.0 at event Date, it tumble to 72.64 1 day after the event. So RV fell on average of the previous 4 Years 1 day after the event by 27.4%.
Another way to see it is pegging 100 at the event; so same information presented differently...
Because we had tremendous volatility in the global markets lately, I decided to study also the Relative Performance ( RP ) of Apple Shares Volatility compare to the Mighty SP500 Volatility .
What I found is quite interesting also ( IF history repeat itself for sure ):
1) Taking closing levels for Apple Shares Relative Volatility ( RP ) compare to the Mighty SP500 Index Volatility
6 Trading Days before and 5 Trading Days after the ER dates ( T=0 on the chart below - bottom scale ) of the past 4 years
2) Applying a normalize level in each case at ER Dates with a level at 100 in each case
( See chart below - left scale ).
Chart of Apple Shares Volatility over SP500 Index Volatility Normalize at 100 on Q1 ER Days ( T=0 )
( 2012 to 2015 )
What have changed compare to the last 5 events :
1) China economic slowdown add a lot of uncertainty to Q1 ER.
2) SP500 is in a Bear Trend lately...
3) Since the Split in June 2014, Apple Shares Behavior are different: Retail Participants will bring more Volatility in Apple Shares Prices.
4) Extreme Financial Volatilty in January 2016
So what we found:
1) Apple Relative Volatility is in a painful grinding process from T-6 to T-1 before the Q1 ER event.
2) Peak Relative Volatility is reached at T-1 prior the Q1 ER event - January 25 2016 in our case.
3) Apple Relative Volatility tumbled from T=0 to T+1 after Q1 ER tremendously by 27.4%
RV closed on January 22 at 1.70, below it s 200 DMA ( Day Moving Average ) at 1.84.
Even if RV seems lower than the past 4 years on average at T-2 ( January 22 equivalent ), pure Volatility closed at 37.9% last Friday, above the T-2 Volatility in 2015 at 35.9%.
What I am telling you is that time decay on such High Volatility is quite huge; either for a quick trade or more in call or put spreads to lessen the risk of losing premium prior to the event, because we know is that after the event, Volatility is collapsing...
And IF history is any guide, from T=0 to T+1 day after th Q1 ER event over the past 5 years, the worst price shift in Apple Shares have been in 2013 with -12.3% and the best was in 2012 with +6.2%...
The Weekly January 29 101 Straddle ( Long Call and Long Put ) closed last Friday at $6.35 and
The April 15 100 Straddle ( Long Call and Long Put ) closed last Friday at $11.70 and
I will follow those straddle this week...
Q1 ER Apple Shares Price and RV Behavior are the most choppiest and volatile of all the quarters Because it is the first quarter that extend new product introduction and volatility from the SP500 at the beginning of the year.
So all that is telling me that you will have to trade it based on a core holdings and swing a portion of it getting near the Q1 16 ER Results: And it will not an easy task because Q1 ER are the most volatile to trade...
We did have last Friday a huge rally but still only a dead cat bounce to me until $102.90 broken on a daily close.
We need to get above on a weekly basis the $102.90 level ( which is the previous weekly break out back on the October 20 2014 week ) to change that Macro Bear Behavior trend. ( See chart below - Bottom Blue Trendline )
Stay tuned as I will update you in the Daily as usual for specific trading levels.
Interesting article that will create even more expectations til January 26:
Apple: China Telecom Data Points To Strong iPhone December Quarter
Will Apple Inc earnings reveal the first drop ever for iPhone sales? Suppliers warn of weak orders
Apple, Inc.'s Foreign Exchange Risk Isn't Going Away Anytime Soon
END.
Already in Low Relative Volatility (RV) Territory...
This is a research based on the historical behavior prior and after of the
release of Apple Q1 ER that should be published by Apple on January 26.
As usual, when Apple announce the ER date, market start to speculate on
potential earnings well in advance.
But this year, with the iPhone 6 and especially the iPhone 6+,expectations are
already quite high. But as we know, China turmoil this year is adding some nervousness on the forecast.
What I found is quite interesting ( IF history repeat itself for sure ):
1) Taking closing levels for Apple Shares Relative Volatility (RV) 6 Trading Days before and 5 Trading Days after the ER dates ( T=0 on the chart below - bottom scale is January 26 ) of the past 4 years
2) Applying a normalize level in each case at ER Dates with a level at 100 in each case
( See chart below - left scale ).
Chart of Apple Shares RV Normalize at 100 on Q1 ER Days ( T=0 )
( 2012 to 2015 )
So what I found :
1) RV on average of the past 4 years before the event are rising from the 6 trading session to the 4 Trading Days prior of the event on average. Average move from RV from T-6 to T-4 was +3.9% ( Average RV 4 years in orange - chart above )
2) RV on average of the past 4 years before the event is then falling from the 4 trading session to the 2 Trading Days prior of the event on average. Average move from RV from T-4 to T-2 was -3.3% ( Average RV 4 years in orange - chart above )
3) RV on average of the past 4 years before the event is rising from the 2 trading session to the 1 Trading Days prior of the event on average. Average move from RV from T-2 to T-1 was +4.3% ( Average RV 4 years in orange - chart above )
4) RV on average of the past 4 years before the event is then falling from the 1 trading session til 55 Trading Days after the Event a T+5 on average. Average move from T-1 to T+5 was -35.5% ( Average RV 4 years in orange - chart above )
5) Lowest Closing RV on Average of the past 4 years have been 5 Trading Days after to January Event:
So in our case is February 2 . Average return from T-1 to T+5 was -35.5%.
6) Peak RV is the highest at T-1 prior to the event: in our case, will be January 25 2016.
7) From the event plus 1 trading session, RV correction: ( Taking Closing RV as a Proxy of the past 4 years ) is ( in our case January 27 2016 ): So from a normalize 100.0 at event Date, it tumble to 72.64 1 day after the event. So RV fell on average of the previous 4 Years 1 day after the event by 27.4%.
Another way to see it is pegging 100 at the event; so same information presented differently...
Because we had tremendous volatility in the global markets lately, I decided to study also the Relative Performance ( RP ) of Apple Shares Volatility compare to the Mighty SP500 Volatility .
What I found is quite interesting also ( IF history repeat itself for sure ):
1) Taking closing levels for Apple Shares Relative Volatility ( RP ) compare to the Mighty SP500 Index Volatility
6 Trading Days before and 5 Trading Days after the ER dates ( T=0 on the chart below - bottom scale ) of the past 4 years
2) Applying a normalize level in each case at ER Dates with a level at 100 in each case
( See chart below - left scale ).
Chart of Apple Shares Volatility over SP500 Index Volatility Normalize at 100 on Q1 ER Days ( T=0 )
( 2012 to 2015 )
What have changed compare to the last 5 events :
1) China economic slowdown add a lot of uncertainty to Q1 ER.
2) SP500 is in a Bear Trend lately...
3) Since the Split in June 2014, Apple Shares Behavior are different: Retail Participants will bring more Volatility in Apple Shares Prices.
4) Extreme Financial Volatilty in January 2016
So what we found:
1) Apple Relative Volatility is in a painful grinding process from T-6 to T-1 before the Q1 ER event.
2) Peak Relative Volatility is reached at T-1 prior the Q1 ER event - January 25 2016 in our case.
3) Apple Relative Volatility tumbled from T=0 to T+1 after Q1 ER tremendously by 27.4%
RV closed on January 22 at 1.70, below it s 200 DMA ( Day Moving Average ) at 1.84.
Even if RV seems lower than the past 4 years on average at T-2 ( January 22 equivalent ), pure Volatility closed at 37.9% last Friday, above the T-2 Volatility in 2015 at 35.9%.
What I am telling you is that time decay on such High Volatility is quite huge; either for a quick trade or more in call or put spreads to lessen the risk of losing premium prior to the event, because we know is that after the event, Volatility is collapsing...
And IF history is any guide, from T=0 to T+1 day after th Q1 ER event over the past 5 years, the worst price shift in Apple Shares have been in 2013 with -12.3% and the best was in 2012 with +6.2%...
The Weekly January 29 101 Straddle ( Long Call and Long Put ) closed last Friday at $6.35 and
The April 15 100 Straddle ( Long Call and Long Put ) closed last Friday at $11.70 and
I will follow those straddle this week...
Q1 ER Apple Shares Price and RV Behavior are the most choppiest and volatile of all the quarters Because it is the first quarter that extend new product introduction and volatility from the SP500 at the beginning of the year.
So all that is telling me that you will have to trade it based on a core holdings and swing a portion of it getting near the Q1 16 ER Results: And it will not an easy task because Q1 ER are the most volatile to trade...
We did have last Friday a huge rally but still only a dead cat bounce to me until $102.90 broken on a daily close.
We need to get above on a weekly basis the $102.90 level ( which is the previous weekly break out back on the October 20 2014 week ) to change that Macro Bear Behavior trend. ( See chart below - Bottom Blue Trendline )
Stay tuned as I will update you in the Daily as usual for specific trading levels.
Interesting article that will create even more expectations til January 26:
Apple: China Telecom Data Points To Strong iPhone December Quarter
Will Apple Inc earnings reveal the first drop ever for iPhone sales? Suppliers warn of weak orders
Apple, Inc.'s Foreign Exchange Risk Isn't Going Away Anytime Soon
END.
November 16: Apple Shares Behavior Before Thanksgiving ?
This is a research based on the historical behavior prior and after Thanksgiving
of Apple Shares. This year it will be on November 27.
It is called the Thanksgiving Effect for Apple Shares: Seasonality prior sales
of Thanksgiving.
But this year, with the iPhone 6 and especially the iPhone 6+, expectations are
already through the sky and market seems to be in advance of the seasonalities...
What I found is quite interesting ( IF history repeat itself for sure ):
1) Taking closing levels for Apple Shares Price 11 Trading Days before and 5 Trading Days after the Thanksgiving Dates ( T=0 on the chart below - bottom scale ) of the past 5 years.
2) Applying a normalize level in each case at Thanksgiving Dates ( TG )with a level at 100 in each case
( See chart below - left scale ).
Chart of Apple Shares Price Normalize at 100 on Thanksgiving ( T=0 )
( 2009 to 2013 )
So what I found :
1) Price on average of the past 5 years before the event is declining til the 4th Trading Days prior of the event on average. Average return from T-11 to T-4 was -3.2% ( Average Price 5 years in orange - chart above )
T-11 is November 12 this year and T-4 is November 21
2) Lowest Closing Price on Average of the past 5 years have been 4 Trading Days prior to Thanksgiving Event:
So in our case will be November 21. Average return from T-4 to t=0 was +2.7%.
3) Peak price is the highest after 5 trading days of the event: in our case, will be December 4 2014.
Average return from T=0 to T+5 was +2.4%.
So in summary ( IF history repeat itself ):
From the bottom price reached 4 trading sessions prior of the Thanksgiving effect ( So in our case will be November 21 ) to 5 trading sessions after ( So in our case will be December 4 2014 ) , on average of the past 5 years, Average return from T-4 to T+5 was +5.2%.
What have changed compare to the last 5 events :
1) Expectations are the highest of the past 5 years because of the pre-order annoucement.
2) China will be included in the Q4 ER ( which is 15 to 20% of Apple Sales )
3) A bigger iPhone 6+ being offered is already sold out - Are clients will wait or buy the iPhone 6 instead...
4) Since the Split in June 2014, Apple Shares Behavior are different: Retail Participants will bring more Volatility in Apple Shares Prices.
5) SP500 Futures is at the highest ever.
6) Apple Shares reached the highest level ever ( on a ratio basis compare to the SP500 ).
Stay tuned as I will update you in the Daily as usual for specific trading levels.
Oct 12
October 12: Apple Shares Behavior Before Q4 ER ( Earnings Release ) ?
This is a research based on the historical behavior prior and after of the
release of Apple Q4 ER that should be published by Apple on October 20.
As usual, when Apple announce the ER date, market start to speculate on
potential earnings for Q4.
But this year, with the iPhone 6 and especially the iPhone 6+,
expectations are already through the sky. But as we know, China will not be
included in that number this year, which is adding some nervousness on the forecast.
What I found is quite interesting ( IF history repeat itself for sure ):
1) Taking closing levels for Apple Shares Price 6 Trading Days before and 5 Trading Days after the ER dates ( T=0 on the chart below - bottom scale ) of the past 5 years
2) Applying a normalize level in each case at ER Dates with a level at 100 in each case
( See chart below - left scale ).
Chart of Apple Shares Price Normalize at 100 on Q4 ER Days ( T=0 )
( 2009 to 2013 )
So what I found :
1) Price on average of the past 5 years before the event is grinding 6 Trading Days prior of the event on average. Average return from T-6 to T=0 was +2.67% ( Average Price 5 years in orange - chart above )
2) Lowest Closing Price on Average of the past 5 years have been 4 Trading Days prior to October Event:
So in our case is October 14. Average return from T-4 to t=0 was +2.52%.
3) Peak price is the highest at the event: in our case, will be Oct 20 2014.
4) From the event plus 1 trading session, Price correction: ( Taking Closing price as a Proxy of the past 5 years ) is ( in our case Oct 21 2014 ): So from a normalize 100.0 at event Date, it tumble to 98.6 1 day after the event. So price fell on average of the previous 6 Years 1 day after the event by 1.4%.
Because we had tremendous volatility in the global markets lately, I decided to study also the Relative Performance ( RP ) of Apple Shares compare to the Mighty SP500. Just in case...
What I found is quite interesting also ( IF history repeat itself for sure ):
1) Taking closing levels for Apple Shares Relative Performance ( RP ) compare to the Mighty SP500 Index
6 Trading Days before and 5 Trading Days after the ER dates ( T=0 on the chart below - bottom scale ) of the past 5 years
2) Applying a normalize level in each case at ER Dates with a level at 100 in each case
( See chart below - left scale ).
Chart of Apple Shares over SP500 Index Normalize at 100 on Q4 ER Days ( T=0 )
( 2009 to 2013 )
So what I found :
1) RP on average of the past 5 years before the event is grinding 6 Trading Days prior of the event on average.
The average outperformance of the past 5 years from T-6 to T=0 was +1.84%.
( RP Average 5 years in orange - chart above ). SO if RP is going up, Apple Shares outperform the SP500...
2) Lowest RP on Average of the past 5 years have been 4 Trading Days prior to October Event:
So in our case is October 14. Average return from T-4 to t=0 was +1.73%
3) RP is the highest at the event: in our case, will be Oct 20 2014.
4) From the event plus 1 trading session, Relative Price correction: ( Taking Closing price as a Proxy of the past 5 years ) is ( in our case Oct 21 2014 ): So from a normalize 100.0 at event Date, delta tumble to 98.6 1 day 1 after the event. So relative price fell on average of Apple Shares over SP500 of the previous 6 Years for the event by 0.8% 1 day Day after the event.
So what we found:
1) Apple Shares is in a grinding process from T-6 to the ER event.
2) Apple Shares outperform the SP500.
3) Peak price and relative price is reached at the ER event - October 20.
What have changed compare to the last 5 events :
1) Expectations are the highest of the past 5 years because of the pre-order annoucement.
2) China will not be included in the Q4 ER ( which is 15 to 20% of Apple Sales )
3) A bigger iPhone 6+ being offered is already sold out - Are clients will wait or buy the iPhone 6 instead...
4) Since the Split in June 2014, Apple Shares Behavior are different: Retail Participants will bring more Volatility in Apple Shares Prices.
5) SP500 Futures is in Correction Mode.
6) Apple Shares reach a level ( on a ratio basis compare to the SP500 ) not seen since January 2013.
Stay tuned as I will update you in the Daily as usual for specific trading levels.
Sep 14
September 14: Counter Trend is Back ?
What have changed tremendously lately :
1) SP500 Futures is in Correction Mode since September 12 when it did
broke the 20 DMA ( Day Moving Average ).
2) Market is still Complacent
3) We are near a quite bearish seasonality period for the stock market:
From September 20 til first week of October.
4) Apple Shares did not make a new high since September 2 ( at $103.74 )
and is in the 1st week end selling frenzy of the new iPhones6.
( see table below for details of stock performance at product launch )
The counter-cycle between Apple shares and the SP500 is the usual trend.
I think we started a Brand New Trading Environment since September 12 for the Market as a whole. The SP500 futures tested and broke the 20 DMA. . . That change in sentiment behavior for the SP500 ( to a correction phase from a bullish phase ) and then will bring a lot more volatility that we have seen lately.
Also, this particular period for Apple Shares in a first week offering for the iPhone 6 will put ever more confidence for the Bulls but this year a few things have changed:
1) This year, iPhone6 not allowed to sell yet in China
2) Sales in Russia can be impacted by geo-political situation
3) The second wave of availability for iPhone6 this year ( 25 countries ) is Sep 26 compare to October 25 last year ( A China replacement ? )
I Still expect the outperformance of Apple Shares over the SP500 but the ride will be a lot more volatile that we did encounter til now for the market as a whole. I will give specific trading levels in my Daily.
Observe on the chart below the cumulative performance of Apple Shares ( +6.87% ) and
the Mighty SP500 ( +2.84% ) in % since August 1 2014.
August 28 A Brand New Trading Environment
What have changed tremendously since the beginning of this week :
1) SP500 Futures is in Correction Mode
2) Market is still Complacent
3) Apple Shares traded with a new high on August 27 ( $102.57 ).
The counter-cycle between Apple shares and the SP500 is the usual trend.
I think we started a Brand New Trading Environment since August 27 for the Market as a whole. The SP500 futures tested the uptrend channel support level and broke it on August 27. . . That change in sentiment behavior for the SP500 ( to a tiny correction phase from a bullish phase ) and then will bring a lot more volatility that we have seen lately.
The fact that on Apple Shares closed with a new high will put ever more confidence for the Bulls.
But do not be over confident, the price action will not be a direct go but a choppy pattern kind of price action...
On a Macro Basis, as long as we stay above the 20 DMA ( now at $ 97.90 ), we are ok; Breaking it will change the trading behavior for Apple Shares to bearish.
I Still expect the outperformance of Apple Shares over the SP500 but the ride will be a lot more volatile that we did encounter til now for the market as a whole. I will give specific trading levels in my Daily.
Observe on the chart below the cumulative performance of Apple Shares ( +10.45% ) and
the Mighty SP500 ( +2.03% ) in % since July 1 2014.
August 3 A Brand New Trading Environment ?
August 3 A Brand New Trading Environment
What have changed tremendously since last week:
1) SP500 Futures is in Correction Mode and Testing Major Support Trendline
2) Seasonalities turned Bearish: E-Mini SP500 Futures: Bearish Seasonalities ?
3) Apple Shares closed back above the 20 DMA on August 1 ( $95.94 ).
The counter-cycle between Apple shares and the SP500 is the usual trend.
I think we started a Brand New Trading Environment since July 31 for the Market as a whole. The SP500 futures tested the 50 DMA ( Day Moving Average ) level and broke it on July 31. . . That change in sentiment behavior for the SP500 ( from a tiny correction phase to a correction ) and then will bring a lot more volatility that we have seen this year. On top of that, the SP500 Futures is testing a Major Support Trendline that started on February 2014 ( now at 1923.5 ). IF broken Monday, then expect a more severe correction.
The fact that on Apple Shares closed back above the 20 DMA will put ever more confidence for the Bulls.
But do not be over confident, the price action will not be a direct go but a choppy pattern kind of price action...
On a Macro Basis, as long as we stay above the 50 DMA ( now at $ 93.27 ), we are ok; Breaking it will change the trading behavior for Apple Shares to bearish.
I Still expect the outperformance of Apple Shares over the SP500 but the ride will be a lot more volatile that we did encounter til now for the market as a whole. I will give specific trading levels in my Daily Monday.
Observe on the chart below the cumulative performance of Apple Shares ( +6.30% ) and
the Mighty SP500 ( +0.08% ) in % since June 1 2014.
July 27 A New Counter Trend Phase ?
July 27 A New Counter Trend Phase
For the past two months, the Price for Apple Shares Have Been driven mainly
by three main factors:
1) SP500 Bullishness
2) Stock Split and the new Retail Participants
3) Focus on Q3 2014 Earnings and New Products ( iPhone6 especially )
No 2 and 3 effect starting to fade, we are back at the No 1 factor, the
Market Trend and Cycle.
The counter-cycle between Apple shares and the SP500 is the usual trend.
I think we started a Brand New Counter Trend Wave since July 25 for Apple Shares. The SP500 futures tested the 1976.5 level and broke it last Friday. . . That change in sentiment behavior will be favorable in terms of price action for Apple Shares on a relative basis... But do not be over confident, the price action will not be a direct go but a choppy pattern kind of price action...
We must here mentioned one major market risk for a lot of institutional accounts who are under-invested in Apple Shares: and that risk is IF the SP500 start a correction with Apple Shares continue to grind.
That will be a double blow to those accounts...
Now that we are post ER for Apple Shares, we are back at the main factor; Counter Trend. Breaking the 1976.5 level on SP500 futures on July 25 is bringing a brand new Counter Trend Phase for Apple Shares.
I will update you on the daily with specific technical levels, having some data feed problems this morning...
Observe on the chart below the cumulative performance of Apple Shares ( +8.01% ) and
the Mighty SP500 ( +2.85% ) in % since June 1 2014.
July 20 Countdown to ER ?
July 20 Countdown to ER ( Earnings Release )?
I did a special research update on Apple Shares prior Q3 ER schedule July 22.
What I found is quite interesting ( IF history repeat itself for sure ):
1) Taking closing prices for Apple Shares 2 Trading Days prior to Q3 ER for
the past 5 years
2) Applying a normalize price in each case with a starting level ( 2 days prior )
at 100 in each case.
So what I found ( See chart below ) :
1) Peak Price ( Taking Closing Prices as a Proxy of the past 5 years - two trading Days prior of ER ) is reached 1 trading days prior to ER ( in our case July 21 ) of an average gain of 0.36% on average for the past 5 years.
2) On ER Trading Day, we can expect a tiny pullback from the preceding day of 0.12% on average for the past 5 years. ( Blue line on the chart below ).
3) I did not take the history after that; I consider that each ER is different and unique after.
What have changed compare to the last 5 Q3 ER :
1) Since the Split in June 2014, Apple Shares Behavior are different: Retail Participants will bring more Volatility in Apple Shares Prices.
2) We are at the highest level for the SP500 of the past 5 years with signs of market fatigue.
Stay tuned as I will update you in the Daily as usual.
Chart of Apple Shares Normalize at 100 two days prior to ER Days
( 2009 to 2013 )
July 13 A Choppy Road til ER ?
July 13 A Choppy Road til ER ( Earnings Release )?
I did a special research on Apple Shares prior Q3 ER schedule for July 22.
What I found is quite interesting ( IF history repeat itself for sure ):
1) Taking closing prices for Apple Shares 7 Trading Days til Q3 ER for the
past 5 years
2) Applying a normalize price in each case with a starting level
at 100 in each case
So what I found ( See chart below ) :
1) Volatility will prevail during the whole period
2) Peak Price ( Taking Closing Prices as a Proxy of the past 5 years ) is reached 3 trading days prior to ER
( in our case July 17 ) with an average gain of 1.3% compare to the 4 trading days earlier ( in our case July 11 ).
So with a closing price of $95.22 on July 11, IF history repeat itself, we could expect a closing price of $96.45 on July 17. The readings between the low point ( reached in 2010 at 96.8 ) and the high point ( reached in 2009 with 106.5 ) can tell you the kind of volatility that can prevail prior to ER.
3) From Peak Price til the closing price at ER, the surprise is that the level is almost the same ( 101.3 vs 101.23 - Orange line on the chart below ). It tells us that for the past 5 years on average, no price gain on average from 3 trading days til ER.
What have changed compare to the last 5 Q3 ER :
1) Since the Split in June 2014, Apple Shares Behavior are different: Retail Participants will bring more Volatility in Apple Shares Prices.
2) We are at the highest level for the SP500 of the past 5 years with signs of market fatigue.
June 29 Counter Trend and Month End ?
June 29 Counter Trend and Month End ?
The counter-cycle between Apple shares and the SP500 is the usual trend.
Since making the last new high on June 24 at 1960, the SP500 futures
started to range trade. It was the perfect environment for the Counter Trade
phase to kick in. I did mentioned it in the daily that I was expecting that.
Remember also that I mentioned that we did break on June 18 the 20 DMA
( Day Moving Average ) on the ratio of Apple Shares and SP500 Index at .0472.
That was a bad omen then ( Apple Shares did closed at $91.18 that day )
and traded as low as $89.65 on June 25.
To reclaim the 20 DMA ratio, we need to have ( taking last Friday s close ) Apple Shares trade above $92.55.
Already last Friday we had a daily close above the 20 DMA - the price , not the ratio ( 20 DMA at $91.83 and we did have a close at $91.98 on Apple Shares ) that will bring momentum players. If on top of that, we are able to reclaim the 20 DMA ( on the ratio ), it will be technically speaking a very nice bullish combo.
All that to say that I expect the outperformance of Apple Shares compare to the Mighty SP500 to continue in the next few sessions.
The other factor that I follow near month end, is the relative performance of Apple Shares and the whole market ( SP500 Index ). When we observe major difference between both, it can bring some asset mix shift.
But this month, it is not the case at all: Apple Shares performance from end of last month is +1.72% and the SP500 Index is +1.94%.( See chart below ).
So I do not expect any major rebalancing
shifts because of the month end effect,
Only the already Counter Trade Phase
That started since June 24.
Interesting article that I found on Seeking
Alpha - Look for July - a month to rally?
Apple: The Pullback You Wanted
Stay tuned as I will update you in the
Daily as usual.
June 22 APPLE Technicals Behavior - The Retail Factor and Counter Trend ?
June 22 The Retail Factor and Counter Trend ?
The counter-cycle between Apple shares and the SP500 is the usual trend.
The Stock Split bring a lot of Retail Players into the market. Effective June 9,
they rushed to buy and on June 10, a peak in price and performance for Apple
Shares was already in the cards before resuming downtrend.
The Retail Factor have been very impressive in terms of price performance on
Apple Shares ( Look at the first chart below the cumulative performance of
Apple Shares and the Mighty SP500 in % since December 31 2013 ).
The SP500 was already in a bullish wave, helping the Retail Crowd paying a top price for it.
What have changed last week was when Chair Yellin answered the question if the stock market was in a bubble. She answered no. Then on that declaration on June 18, SP500 made a brand new high, That was enough for the Counter Trend between Apple Shares and SP500 to start its second corrective wave.
I think we still have a few sessions in that Counter Trend Wave that started since June 4 for Apple Shares. The SP500 futures is in overbought territory but continue to grind after the FOMC statement on June 18.
To change that trend on SP500 futures, I need that we start to trade AND close below 1942 for now.
IF so, then some Counter Trend trades ( selling SP500 to buy Apple Shares ) will begin.
In terms of relative performance ( ratio of Apple Shares over SP500 - see 3rd chart below ), after a new peak on June 10, we started the corrective phase. First the we broke the 20 DMA ( Day Moving Average - yellow line ) on June 18, a bad omen, and now quite near of the 50 DMA ( red line ) and previous peak price reached on December 5 2013 ( amber trendine ).
I think that we will test and bounce on the last 2 levels. I will keep you updated on the daily on that.
June 8 Update on The Upcoming Stock Split ?
On May 25, I did a first research on the Upcoming Stock Split.
What we know now compare to May 25:
1) SP500 are in a Break Out Mode and Overbought on a short term basis
2) Last week, Apple Shares closed at his highest level since October 2012
3) Confidence and Complacency are at their highest level
ETF s Volume Indicator : Overbought Zone ?
The VIX/ Gold Correlation US Dollar and SP500: Higher Volatility Ahead ?
All that may convince Retail Participants to jump into Apple Shares into
the next few sessions, a huge mistake on a short term basis.
And for those same reasons, I think Icahn waited a little to this week to sell a portion of his shares ( The last purchase of Icahn was based on that speculative and involment of retail players ).
All that to say that we should expect going forwardIncreasing Volatility for Apple Shares as more participants and a weak based ( retail ) are involve.
And what I wrote on May 25, two technical scenarios:
Technically speaking, the way it will trade til June 2 will then create the scenario post June 2:
1) A continued run-up and Euphoria phase ( $629.80 monthly target ) will put more conviction from retail players to buy Apple Shares, then I expect the correction to be violent and quick ( $580.30? )
2) The market take a pause or a tiny correction before June 2 to the $600.00 zone will bring a lesser pent up demand from retail participants. The following correction will be less violent ( consolidation around $600.00 zone ).
So now, we know that scenario no 1 was the answer. The updated version is:
1) A continued run-up and Euphoria phase in the next few sessions ( $92.95 to 95.40 weekly target ) will put more conviction from retail players to buy Apple Shares, then I expect the correction to be violent and quick ( $89.40 to MAX 86.75? )
All you need to know on the stock splits:
Technical details and date: Apple (AAPL) 7-1 Stock Split Draws Near
Apple's Split: What You Need To Know (AAPL)
Apple Stock Split: 2 Theories (AAPL)
Be ready and stay tuned - I ll keep you updated with the daily comments on that.
May 25 The Upcoming Stock Split ?
The Upcoming 7-1 stock split for Apple Shares are a very rare case.
The usual is a 2-1 split. Consequences from that kind of split in an already
bullish technical pattern will put even more conviction to retail investors
participants to buy, a huge mistake.
Consequences of the stock split:
1) Usually seen as a bullish case because put the stock more affordable
to retail investors ( and also options ).
2) Put more liquidity in the market as more participants are involved. (Bid-ask spread will diminish to 1 penny)
3) Lower the transactions costs as participants trade a full lot ( 100 shares ) instead of odd lot.
4) Gives the ability to Institutions and ETFs portfolio managers to rebalance more often.
5) As history suggest ( Master Card with their 10-1 stock split ), stock trades higher til the the record date and then fell from that date.
6) The last purchase of Icahn was based on that speculative and involment of retail players.
I think that between June 2 and June 9, he will sell that portion that he bought May 15 and put a lot of uncertainties for his remaining still huge position.
7) Increasing the Volatility of Apple Shares as more participants and a weak based ( retail ) are involve.
Technically speaking, the way it will trade til June 2 will then create the scenario post June 2:
1) A continued run-up and Euphoria phase ( $629.80 monthly target ) will put more conviction from retail players to buy Apple Shares, then I expect the correction to be violent and quick ( $580.30? )
2) The market take a pause or a tiny correction before June 2 to the $600.00 zone will bring a lesser pent up demand from retail participants. The following correction will be less violent ( consolidation around $600.00 zone ).
So for me, unless the SP500 start a correction, Apple Shares will hit their peak between June 2 and June 6 then start a correction that may last a few weeks...
All you need to know on the stock splits:
Technical details and date: Apple (AAPL) 7-1 Stock Split Draws Near
The Master Card Story: What To Do With Apple Stock Ahead Of Split
Be ready and stay tuned - I ll keep you updated with the daily comments on that.
May 11 Counter Trend and History ?
The counter-cycle between Apple shares and the SP500 is the usual trend.
Since the good Earnings Report ( ER ) from April 23, Apple Shares have
performed quite well indeed. But just looking at the last two previous
good ER ( April 23 and July 23 2013 ) and taking closing prices, I found
interesting behavior.
From ER Date to the next peak closing, we had respectively for April 23 and July 23 2013, an increase in price of +12.0% and +13.4% in 9 trading days compare to the last one of April 23 2014 of +12.7% in 8 days.
After we reached the peak, we had a price correction ( taking closing prices ) on April 23 2013 of 6.9% and it took 7 trading days. On July 23 2013, we had a price correction of 3.2% in 4 trading days.
Now, already 4 trading days after the peak closing price of May 5 at $600.96, we had 2.6% price correction.
Even if we do not have many data, at leat we know that we are not far from reversal in time ( 4 to 7 trading days ) and in price ( correction of 3.2% and 6.9% ) for a price reversal to bullish in Apple Shares.
Technically speaking, it will be great if we test the last peak price on December 5 2013 at $575.14 and rebounded strongly on that. We re really not far, last Friday, the closing price was $585.54. IF we reach that $575.14 target, then the correction will have been 4.2% from peak price - well into past behavior...
All that to say that I expect the reversal this week, unless we have a major correction into the SP500 Index.
Be ready and stay tuned - I ll keep you updated with the daily comments on that.
May 4 Counter Trend and SP500 ?
The counter-cycle between Apple shares and the SP500 is the usual trend.
That idea was first mentioned in the daily. But I will go into more details here.
In term of relative pricing, Apple Shares challenged on April 28 (compare to
the SP500), the previous high made on December 5 2013 (see second chart
below - ellipses) and failed to break the level on that ratio: Very Interesting..
So on December 5 2013, Apple Shares closed at short term high of $567.90 (and a peak price at $575.14).
Back then the SP500 Index closed at 1785.03 (and a peak price at 1792.82).
So, with closing prices: $567.90 / 1785.03 = 0.31815 ratio
And with peak prices : $575.14 / 1792.82 = 0.32080 ratio
To keep the ratio as of December 5 2014 but with the new May 2 prices on the SP500, we obtain Apple Shares:
So, with closing prices: $XXX.XX / 1881.14 = 0.31815 the New Apple Shares price is $598.48
And with peak prices : $XXX.XX / 1792.82 = 0.32080 the New Apple Shares price is $606.74
For the market participants, the $600 level, IF broken, will provide another push into the next bull phase.
I do agree in principle but with different approach for Apple Shares. We must use the ratio to conclude.
For me, only when we will get over and break the 0.318150 ratio level with closing prices, then Apple Shares will be into a last bullish impulse to $629.70 first and $656.00 after.
Because Apple Shares behavior are counter trend are the usual, for me only breaking that ratio of December closing level will give us the next bullish impulse. Til then, we may have a consolidation more in time than in price... I will keep you posted on the daily on that.
Apr 20
The counter-cycle between Apple shares and the SP500 is the usual trend.
Earnings Release (ER) on April 23 will change the usual behavior from Counter
Trend to ER Behavior. More emphasis will be on ER in the next few sessions.
The usual pattern from ER (shown with by a vertical line on charts) is a bullish
phase from 1 to 5 days prior the ER. The day before release, Apple Shares
traded down most of the time. (See charts below of the previous 4 ER).
So ER Behavior pattern will have that usual price action: we can expect Monday on a bullish note followed by a bearish Tuesday. For after ER publish date, very tricky and inconclusive results for Apple Shares.
March 30 Counter Trend Phase Not Yet Over ?
The counter-cycle between Apple shares and the SP500 is the usual trend.
I think we still have a few sessions in that Counter Trend Wave that started
since March 27 for Apple Shares. The SP500 futures tested last week almost
1834 ( March 13 and March 27 ) to create a double bottom and rebounded
strongly on that. That sentiment behavior will not be favorable in terms
of price action for Apple Shares for the next few sessions til we see back
some weaknesses in the SP500 ( I must admit that March 31 can be tricky )...
March 23 A New Counter Trend Phase
The counter-cycle between Apple shares and the SP500 is the usual trend.
I think we started a Brand New Counter Trend Wave since March 20 for Apple
Shares. The SP500 futures tested to break last week the 1868 level and failed
tremendously on March 21. That sentiment behavior will be favorable in terms
of price action for Apple Shares...
Observe on the chart below the cumulative performance of Apple Shares and
the Mighty SP500 in % since December 31 2013.
There is five main phases:
1) Pre Earnings Release where Apple Shares did a lot better than SP500.
2) Post Earning Release were Apple Shares underperformed tremendously the whole market.
3) The third phase was completed two weeks ago with the SP500 flirting with the new high made on December 31 2013 ( and making a new double top at 1844.5 - a shy of the previous high ever of 1846.5 ) and then the expected underperforming of Apple Shares (remember we had a shooting star pattern on February 18).
4) The Break Out Phase for the Mighty SP500 on Russian reliefs ( ending partially military exercises in Ukraine )
were we saw finally a year-to-date positive returns for the Mighty SP500 ( up 1.61% ) and Apple Shares started to struggle ( down -4.88% ).
5) SP500 futures Failed to stay above the major resistance level of 1868. That poor techncial behavior is giving a positive outlook for Apple Shares - still underperformning SP500 since the beginning of the year by 5.43%
Apple Shares are expected to play as couter trend and outperformed the SP500 IF the SP500 futures stay below 1868. With the closing on March 21, we are now above the 20 DMA ( now at $529.17 ) and the 50 DMA ( now at $530.65 ), all quite positive technical data. We MUST stay above those levels though.
Then the cycle of counter trend of Apple Shares continue to prevail... ( See the whole counter-trend cycle explanation below ).
March 9
The counter-cycle between Apple shares and the SP500 is the usual trend.
And especially last week were it was almost a text book example.
The SP500 grinded at the end of the week compare to a bleeding pattern of
the Apple Shares.
Observe on the chart below the cumulative performance of Apple Shares and
the Mighty SP500 in % since December 31 2013.
There is four main phases:
1) Pre Earnings Release where Apple Shares did a lot better than SP500.
2) Post Earning Release were Apple Shares underperformed tremendously the whole market.
3) The third phase was completed two weeks ago with the SP500 flirting with the new high made on December 31 2013 ( and making a new double top at 1844.5 - a shy of the previous high ever of 1846.5 ) and then the expected underperforming of Apple Shares (remember we had a shooting star pattern on February 18).
4) The Break Out Phase for the Mighty SP500 on Russian reliefs ( ending partially military exercises in Ukraine )
were we saw finally a year-to-date positive returns for the Mighty SP500 ( up 1.61% ) and Apple Shares started to struggle ( down -4.88% ).
Now, the tricky part this week for the performance of the SP500 is that geo-political risks are still well into play and can expect volatility to pick up. Apple Shares are expected to play as couter trend and outperformed the SP500 IF we see a down market. But even if I expect an outperformance, it can be with a negative price behavior for Apple Shares UNLESS we have a daily close above $535.00. Then the cycle of counter trend of Apple Shares continue to prevail... ( See the whole counter-trend cycle explanation below ).
Also see charts at the bottom of that page...
Feb 23 Counter Trend Phase ?
The counter-cycle between Apple shares and the SP500 is the usual trend.
And especially last week were it was almost a text book example.
The SP500 grinded most the week compare to a bleeding pattern of the
Apple Shares.
Observe on the chart below the cumulative performance of Apple Shares and the Mighty SP500 in % since December 31 2013.
There is three main phases:
1) Pre Earnings Release where Apple Shares did a lot better than SP500.
2) Post Earning Release were Apple Shares underperformed tremendously the whole market.
3) The third phase was almost completed last week with the SP500 flirting with the new high made on December 31 2013 ( and making a new double top at 1844.5 - a shy of the previous high ever of 1846.5 ) and then the expected underperforming of Apple Shares (remember we had a shooting star pattern on February 18).
Now, the SP500 will consolidate and start to pullback this week and Apple Shares will be in the process of bottoming out and rebound in the next few sessions... Then the cycle of counter trend of Apple Shares continue to prevail... ( See the whole counter-trend cycle explanation below ).
Also see charts at the bottom of that page...
Feb 8: On Feb 4 I wrote: Now, I do expect some consolidation into the SP500
but would not be surprise to see Apple Shares continue to grind higher in the
next few sessions.
Earnings release (ER) on Jan 27 have to be excluded of the typical trend analysis because of a special events. But already starting on Jan 28, Apple shares became again Typical counter trend behavior of the market. It has became the perfect play for institutional investors: a good stock at cheap price and low volatility compare to the SP500 at that period...
Observe on the chart below the cumulative performance of Apple Shares and the Mighty SP500 since Dec 31.
There is two main phase - pre ER where Apple Shares did a lot better than SP500 and the same post ER.
Now, I expect some consolidation for SP500 and Apple Shares where Apple Shares should slightly outperform in the next few sessions...
Also see charts at the bottom of that page...
Feb 4: Yesterday was one very good proof that the counter trend behaviorbetween Apple Shares and the Mighty SP500 is the way to trade.Now, I do expect some consolidation into the SP500 but would not be surpriseto see Apple Shares continue to grind higher in the next few sessions. See charts below...
Feb 1: I think we will back with the usual trend because SP500 remains under pressure with a lot of volatility going forwards (coming from the EmergingMarkets) and Apple Shares have seen the high volatility already with a bad market reaction from Earning Release (too high expectations).
So I think we can see Apple Shares starting to outperform the SP500 with less
volatility; a situation that Institutional Investors like very much indeed.. See charts below.
Jan 29: Now after ER and the capitulation in Apple Shares we hadon Jan 28, we can be back into the counter trend behavior vs SP500.
What it is interesting is that during the capitulation process of Apple,SP500 was in the dead cat bounce phase, now completed. See charts below.
So here, I think that it will become a tailwind from a headwind we had in the previous sessions...
On Friday the 24, a quite rare event happened: SP500 was down more than 2% on a single day. What it brang with it, was the best performers since the beginning of the year like Google and Apple as shown by the chart below.
That chart shows the cumulative performance since Dec 31 2013...
Jan 23: Now back to reality with Apple Shares trading as counter trend vis-a-vis the market (SP500). The tremendous weakness in the past few session in the SP500 is helping Apple Shares: now, a rebound in the SP500 Friday this week were some last portfolio adjustement will bring some abnormal behavior and some pressure to Apple shares...
We had a disconnect at the beginning of last week because of the CHL double deal announcement and the unwind of it at the end of the week.Also, the option drag on Jan 17 brang Apple Shares into oversold condition.
From Dec 23 til Dec 30 were SP500 make almost new high everyday, Apple shares were on a bleeding path as shown by the charts below......
On Dec 31, Apple shares outperformed with a new high in the SP500; unusual but portfolio rebalancing at the end of the year can explain that...
And from Jan 7 til Jan 10, the stock market rose in a grinding way and Apple Shares fell in down gaps, a quite classic pattern...
April 2013
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January 2014
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