Remember that people want to own a good stock from a good price. Every wall street pimp and their little h**'s bought more apple and owned it at good prices. People still own apple from after 08, after the flash crash, and after August of last year. Since everyone and their mother loves to collude in this market they are going to be selling at the same times. Those same people will be buying at the same times as well. Now keep in mind this is a slight generalization, but the majority of human money resides in hands that collude with the other big money participants.
Next thing to address with this in mind is that Apple has made a very big move, obviously.. Over the past 8 months starting from March there was a major balancing area in the 380-400 range. Apple established nicely and made a decent base to lead up to this run, but after moving as much as it did this run what is holding it up in terms an agreement on price? Buyers and sellers don't have a reference point, meaning that one will have to be made. Granted I did tell people at 640 to start scaling out of their apple positions, I am definitely not trying to call a bottom here. I think the balancing area will be made at + - the 540 area and then slippage all the way down to 529. This would give room for money to exit that hasn't already for the market's off season in the summer. It also leaves room for more supply to enter the market due to indices losing traction and coming down to more intrinsic levels. There is no point in holding apple if everyone is shorting the S&P. What controls what, does apple control the S&P, or does the S&P control apple? IMO apple does not control the futures market. The controller of the situation is money. The robots are the money and they give a crap about anything besides probabilities and variables. We have a pending H&S formation on the ES that will be indicative of another strong move with momentum down. If ES can not hold these levels then it looks like a really bad chart. How simple is that? Also patient players, humans and algos will just wait until the picture is pretty again. While I do think there is a chance that apple can bounce at the level it is at now, I find it very unlikely. To me the probabilities are in favor of apple moving down more at this exact time. I do not see ES being able to bounce at all from where it is now. Who is buying? Retail investors think this market is a piece of crap and are yet to come back into it. This is because there is absolutely no sustainability to the market yet. It is the same players playing the same game of collusion. There is no sustainability to the trends, waves, and cycles of the market, specifically due to the HFT's absolutely raping it. Proper economics and structure within the system (government, US, economy) can lead to sustainability of business cycles reducing a lot of the friction in boom and bust cycles.
Example. Let's say apple bounces a bit from where it is initially next week up to about 570, what happens next then? What is more likely from a probability distribution perspective. Are there enough buyers to create enough demand to overwhelm the supply of A. HFT's B. Hedge funds that are scaling out of positions still, or C. sell stops from people that are holding. Because the probabilities are in favor of more downside after an example bounce to 570 there is just that much more logical reasoning for it to go down from where it is and to have the H&S bust like a full vitamin water bottle with a citty lid. Personally from a fundamental standpoint apple has a lot going for it in terms of revenue growth, but the sustainability of that is always in question at a time like this. This is the time where holders or non holders can speculate and say okay here is apple earnings from this past christmas and the first quarter of the year, are they going to be able to do the same thing next year? Are you going to be ready to buy and Ipad 4 next year, what in the heck are they going to do to make it have convincing improvements over the Ipad 3. Yes there will be the Iphone 5 and it will have to be their savior. Who is willing to take that bet as of right now? *crickets*.... The only reason the Ipod is being sustained is because it has become a standard for many companies to prop themselves off. The question is: Is that still going to be the norm going into the future, or I am going to be able to plug my droid into those same items due to universal accommodations from technology. Meaning, and this has happened in the past, that okay now there is an universal adapting system to use that will allow other things to substitute? This would even broaden those companies that were propping themselves off apple in terms of acceptance. This has happened many times USB 3.0 etc... If apple were to suffer a transitional phase of this and their Ipod inventories started stacking that would be very bad news. If they were smart they would practically make no changes to the current Ipod and let demand sift out as time passes and then remove the item. I am referring specifically to the regular Ipod, because the other Ipods do have market placement. And again the ipod could possibly maintain market demand, but I think there are fundamental risks associated with that.
The other problem is HTML 5 and open sourcing. It will just be interesting to see what kind of affects this has on the app market and functionality of the app in general.
I just wonder if hedge funds and investors actually understand the logical implications behind open sourcing and HTML 5. The response I am sure is that well the Apple cult will always lead to prosperity for the company. I am just saying be careful, because there is a lot of inherent risk among this change and how it could be the demise of the Iphone. Suppose app developers specifically make an app that targets Iphones and contaminates them with things that would be hidden to most all of people. While one could say the same applies to droid then I guess it would mean that it just depends which side of the fence the better computer programmers/hackers are on... Thus are people/buyers willing to take this fundamental risk ahead of time. My answer, no.
My last note is that they have had awful problems with the 2010 regular macbooks. Almost every other person I know that purchased one has similar complaints about the cheap manufacturing. I had my own problems with snow leopard operating systems that were complex and I don't really want to spend my whole day on here describing them.
I do like their macbook pro's and their regular desktops are solid. I have yet to use their newer operating systems to see their functionality, and I am very excited to do so, but that might be taking a bit longer than I expected as of now.....
Apple TV is going to be a huge hit or a huge miss, and thus again there is a lot of fundamental risk associated with this especially considering the product and the functions is it suppose to encompass. Am I willing to be extremely speculative due to this one thing, eh.. I'll wait until the momentum picks up ... Let me see the earnings and then we will talk. I decided on a price target of 1000 within 1.75 years after we broke 475 and I cancelled apple bearishness very officially in the intraday chat thread.
I don't have inherent beef with apple as it is very active to trade, but I do think that if buyers are not careful that the price action could turd out if things go bad.
This does not include the fundamental risk associated with the technology sector that I see no one ever talking about and that is that every tech company has a very a big generalized risk exposure from new programming. It only takes a partner or another companies flaws to bring down a give tech. I made a reference to MSFT and vista in the MSFT thread. For that issue everyone pointed fingers at MSFT when it really was nothing related to their product. Every tech company is prone to anomalies with their software product. As quick as apple is releasing products, I consider them to have the most of this type of risk. Another reason why there is no golden tech company, it really boils down to the momentum in the price action and the hype for that 3-6 months. Apple could release the Ipad 4 and have huge problems with either their coding or internals. What happens then, everyone blames apple and doesn't buy their products. I saw a slight bit of this with the regular macbook. And those of you who know me and what my stance was on apple that is partially why.
All of this neglects the problems with our country's debt crisis, current or future presidents, and other countries economic instability.
Other risks include the fact that apple is exposed for evading taxes in a weird way that no one really wants to address properly. If you look at the numbers it's honestly bull S***.
I am not sure I like where this company is going either after Steve's death.
This is a 4hr chart with 8,4, and 1 month VP's to support what I was saying about the balance area yet to being seen.