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Apple Inc. Message Board

  • techstrategy techstrategy Jun 9, 2011 4:58 PM Flag

    Money flow highlights option manipulation...

    If you track the money flow over the course of the day, you can get an idea on how this is being manipulated. I'm not saying its illegal (that's for the SEC), but until 15 minutes before close, Apple was the money flow leader. Then, magically, 15 minutes before close it end up with an outflow. Logically speaking, whoever wanted out could have gotten out in the 15 minutes before that where prices were even higher. The stock has held its ground at 330 quite well. So.... basically, I conclude that 335 will be the pin and that folks shorted and sold the hell out of Apple to keep it down through the end of the day to buy options on the cheap.

    If tomorrow is a down day, money will flow into Apple as a safe haven, buffering any drop. In fact, it could be a nice short squeeze because there's no doubt that a bunch of people are holding shorts rather than covering in the hopes that it breaches 330. If it doesn't, it might run further than expected...

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    • /Good analysis.

    • Pure:

      We agree to disagree. I view the world differently than you, but I'm not stupid. I'm a Kellogg MBA that worked at McKinsey for years. I've done a lot of econometric modeling and frankly could probably prove the hypothesis if I wanted to spend the time.

      For now, I am just trying to learn what is really going on with Apple and Google. Sure, some of it is traditional tech rotation, but the price action goes well beyond what would be justified by that alone and that frankly should have affected other high multiple techs to an even greater extent, which it has not.

      I understand competitive strategy and value creation very well. Apple and Google are the companies best positioned to capture value from the next 5 years of mobile/cloud computing. I am still learning how the stock market trades, so I'm taking some hits along the way, but soon I will have all this crap nailed...

    • A few points:
      1) MSFT paid out dividends, so return exceeded stock price appreciation.

      2) MSFT's had a fundamentally different growth trajectory, yet a higher multiple back in 2000. I don't have time to get the exact numbers, but you cannot find for me another company that has ever had 75% YonY growth in a set of categories that is growing rapidly (mobile phone / tablets) that has a multiple under 20.... PC's were already mature by 2000...

    • MSFT's 150% increase over ten years was paid out in dividends. The dividend payout was greater than the growth and consequently AAPL share price didn't grow. Totally different with AAPL. AAPL's growth in revenue and earnings would far exceed a 10% dividend if AAPL would start paying a dividend. If AAPL continued with even a 30% growth for the next ten years, they could pay a 10% dividend annually and still have a 300% growth in the share price ($1000).

      The relationship that you are trying to build between AAPL and MSFT shows that you lack understanding of the mechanics of investing.

    • Just curious, in your mind what kind of market behavior isn't considered manipulated? One that always goes up? One that always goes down? One that doesn't move? One that goes up when you want it to go up and goes down when you want it to go down? Please educate me.

      • 1 Reply to pureinvestor
      • That's actually a good and fair question.

        First, when the price action isn't being driven primarily by options activity rather than by material corporate events and earnings. I think the short activity around April 15th is a very good case study. Whoever did it had to have massive resources and not be overinvested in the stock. Given that GS essentilly cashed out in Q1 while its analyst had a Conviction Buy, they would have been in a position to do it.

        Second, when the stock's price movement has some reasonable correlation to underlying company performance.

        I hadn't considered the concept of Apple being overowned, but I think that is what has made it vulnerable to this crap and why GS liquidated to make profits on trading rather than investing...

    • Here you go again.

    • Manipulation? What isn't. I suggest being careful here. Take a look at the April 14-15th action. Closing price within a buck of today's close. Friday April 15 opens higher then crashes at end of day to a low of $326.90,closing down for the OP_EX at 327.64 down $4.96. The following Monday it goes down to $320.00 before closing at 331.85. Four trading day later on Friday, it hits $355.13 for a high, with the highest volume in weeks at 26,921,800. The obvious tell, which I ignored, on April 15, was the 330 Puts selling 5 to 1 over the 330 calls, from what I remember, during the day when the stock was holding the 330.00 level.

      Will it repeat, who knows but it was a powerful 6 trading day move.
      Happy Trading

      • 1 Reply to johngerard90
      • I think the two are actually quite similar. If you look back at the short report, short interest ballooned between the 15th and the 30th, from 11.5MM to 13.3MM shares and then went down to 11.6MM shares. Because the date is settlement date, it means on April 12th short interest was 11.6MM shares. I suspect a similar group made a similar move back then and continued to short it for a few days and bought calls while doing it. Then they covered all of the shorts (a few million) driving it up to 350+.

        Maybe they can take it down to 320's again this time. If so, I will be loading up in an EPIC way. But, I don't think so. I think the soft market has created a flight to quality and they will find that there are too many buyers of Apple (regardless of SJ health) with other tech stocks buying used as currency... People would be nuts not to use NFLX, APKT, etc etc as currency to buy Apple right now...

    • So, really waht you're saying is, AAPL could go UP or DOWN tomorrow. Well said..........

      • 1 Reply to bg_rox2001
      • Actually, I don't really think that Apple can close below 330 tomorrow. I'd love to see the hedgies try it. It will set up an awesome rally for OE next week.

        I think that some large funds are playing upon retail fears. In reality, Apple has pulled back more over the past 5 days (352 to 332) than the Nasdaq, which is insane and unsustainable because unlike the NASDAQ, it isn't overvalued.

        I'm more bullish than ever on Apple. I think folks are pushing both Apple abd Google as far down as they can and loading up on call options. Meanwhile, retail are buying puts...

 
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