January 10, 2007
Apple’s Intraday Action Following iPhone Announcement
Tricky action around the time of the iPhone announcement, but Dummies were given a good spot around $88 to get aboard with minimal risk. As my old trading buddy Susan (who has since retired to the Caribbean, literally) liked to say, let’s take it down to take it up. AAPL did 520,000+ trades, impressive.
Cat: | Time: 11:31 am (utc+8)
January 10th, 2007 at 3:46 pm
Mao,
I disagree with your “spike down fake-out” analysis. You have to realize the reason for this spike out was that Jobs keynote speech was about 1/2 done this morning when this spike down occurred and there had not yet been the announcement of the Iphone. So basically, people reacted - perhaps hastily - that Apple would not release an Iphone. Considering that the market had anticipated this release and the stock had been priced with this news the natural fall and potential greater fall was too risky for a purchase. It wasn’t until 30-45 minutes later that Jobs release the news and thus the jump up.
As for the “Dummies Delight”, I still think there was too much risk to get involved in there - considering the volatility during the course of the day. After the news the stock jumped up 4%. IMO, the upside - at that moment - seemed limited considering the price had taken into consideration all the news for the day.
What are your thoughts about this stock trading through the course of the day?
BTW, I truly believe this stock will be at 100 in no time, perhaps a few weeks from now.
Cheers.
January 10th, 2007 at 3:50 pm
Two more questions :
1) What software do you use for your charts?
2) Where can you find out how many trades occurred for a stock? Not volume but rather the amount as you stated above for AAPL(520,000+)
January 10th, 2007 at 5:30 pm
Amirinator: 1) Metastock. 2) I think most real-time data vendors provide trade count (I use Qcharts); Interactive Brokers also provides this data if you have an account there.
Yeah, the “what, no iPhone?” - “oops, yes there’s an iPhone!” explains the action, but I’d like to think that folks in the know “took it down to take it up” — I’m a closet conspiracy theorist. ;-)
The Dummy Spot is pretty standard narrow range down bar / inside bar stuff, very little risk setting your protective stop below that swing on the 5-min. chart.
I have no idea if AAPL will get to $100 and urge you to try not to think in those terms. I’d never speculate on the unknowable and create mental blocks unnecessarily.
January 11th, 2007 at 12:11 am
I am not an expert Dummy, but what would have prevented a good Dummy from shorting AAPL after the precipitous fall and before the sudden recovery? Looks like a disasterous dummy-trap to me…
January 11th, 2007 at 1:28 am
No, this was classic “buy on the rumor, sell on the news” drop out. All that volume and the drop in price was those who do this bailing out!
January 11th, 2007 at 4:33 am
CM,
Thought you would like this.
January 11th, 2007 at 8:32 am
Amir: No, I didn’t like that. Where I come from we don’t mock or make fun of poor people.
January 11th, 2007 at 9:48 am
Well said CM
January 11th, 2007 at 11:31 am
CM,
You’ll have fun with this:
January 11th, 2007 at 8:00 pm
KS: That’s kind of gross too, but oddly compelling. ;-)
January 11th, 2007 at 11:38 pm
you see this tóng zhì?
January 12th, 2007 at 12:41 am
RE: KS link
I don’t get the feeling that Dubya is that flexible.
January 12th, 2007 at 10:13 am
I traded AAPL accidental that day without hearing anything about the iPhone.
I saw it up with huge volume and its direction was opposite to RIMM, so I bought AAPL and short RIMM, both got little profit:).
January 14th, 2007 at 9:03 pm
I too disagree with your “spike down” analysis. The spike down occurred during the portion of the keynote where Jobs said something to the effect that they were going to be talking about “Macs” today. The market took that to mean that the iPhone was not on the radar for that keynote and reacted accordingly. When the iPhone was subsequently announced about 15 minutes later, the markets spiked higher. There were plenty of sites continuously updating via text from MacWorld that morning so the timing of the reaction was not surprising. I think the rationale that market makers brought the stock down, only to shoot it up again is highly unlikely and does not fit in with the timeline of the actual event. It also makes for poor market advice.
January 14th, 2007 at 9:15 pm
Robert: I never give market advice, but yes I’m probably wrong about how things played out that morning. I’m astonished that Apple was able to keep the iPhone announcement under wraps and I’d like to think that there were people in the know who would have benefited by taking it down first … but again, that’s my inner conspiracy theorist talking. In any event, day traders got a great spot to get long with next to no risk post-iPhone announcement — that much is indisputable.
February 4th, 2007 at 4:28 am
I agree with Maoxian. I believe that people in the know bought big. How do you get people to dump their stock so wallstreet can buy to fill the large orders of Hedge Funds? You sell big to create panick and then buy back at lower price. This was a classic wallstreet move, but doesn’t happen to this extreme very often. Very profitable if you realize whats going on, those following Apple most likley did. I did! The old cliche of buying on weakness and on panick fits here.
I personally thought that a higher low at 85.5 was low risk entry at 12:45pm.
As far as Apple going +100, you will need a catalyst for this for big money to get interested. We will see how sales for the iPhone are.