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Gaming Apple Shares for Fun and Profit

By Rick Ackerman Posted on September 12, 2012, 12:01 am EDT Last Updated September 13, 2012, 5:49 am EDT

You’ve got to hand it to the arse bandits who make their living manipulating Apple shares each and every day. This week, they demonstrated yet again that they reign supreme in the hierarchy of quasi-criminals who populate Wall Street.  For months, they’ve been goosing the stock repeatedly with short-squeeze rallies fueled by The Coming of iPhone5.  Such shenanigans are to be expected in AAPL in particular because institutional traders, like that famed bank robber of yore, Willie Sutton, have gone where the money is, gaming the shares of the world’s largest company.  With iPhone5’s high-profile introduction slated for this morning, how have Apple shares behaved?  In a word, diabolically. On Monday, the rubes who bought the opening with market orders got crushed in a classic bull trap.  The stock gapped up to $683 in the first moments of the session, but it was steeply downhill from there.  By day’s end, Apple had fallen to $662, a 3% plunge; then, still lower on Tuesday, to a prospective bear-trap low of $656.

With the stock feinting toward hell, we should keep in mind not only that Apple Inc. is expected to sell as many as 53 million iPhones in the fourth quarter, and perhaps 266 million more in 2013, but that each and every device is priced to fully exploit Apple’s unique cachet  among younger buyers in particular.  For Apple, it’s like being able to sell Manolo Blahnik shoes or Vuitton handbags at ridiculous prices — but to buyers of many ages and both sexes, not just women.  As a result, Apple’s margins are by far the best in the business, iPhone5 is destined to be a monster hit, and the stock itself has become all but impervious to pessimism. So what was it doing yesterday trading for $656, down $27 in the space of mere hours? Answer: Trying to scare the pants off any nervous Nellies who might still be induced to part with AAPL shares at distress prices.

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  • Brad September 13, 2012, 4:48 am

    I don’t know where Apple’s stock price is going, but I know where my MacBook Pro will end up. I had a problem today while more than 1000 miles from home with no access to other computers. The Florida Mall store in Orlando had the part I needed, a 20 min fix. They refused to replace the touchpad. Said a 1 to 3 day fix, no specific time table allowed.

    I said I needed it for business use, even said why and explained. They said they didn’t care. I got the same treatment as an 11 yr old wanting to play Angry Birds.

    Called online, was told the same thing. Earning a living using their computer doesn’t give me priority.

    The Millenium store in Orlando was willing to fix it but didn’t have the part.

    My computer will soon be a one that can be repaired wherever I’m currently located.

    I will also not be buying the new I-phone 5 in October, neither will my wife.

    If this is how they intend to treat customers, Apple will soon be a short.

  • ter September 13, 2012, 3:06 am

    In Florida, the school year is 175 days. Private sector work year is 240 days, or 37% longer. Therefore, $50,000/year paid a teacher equates to remuneration of $68,500, if the days worked were the same. For an average teacher in Chicago, assuming the same number of days in the school year, the $70,000 equates to $95,900. As noted above, this pauper’s income doesn’t factor in lush health and retirement benefits, or additional pay for coaching, teaching summer school, etc.

  • John Jay September 12, 2012, 11:43 pm

    Rick,
    As for the Chicago teachers don’t forget that their charges, the ones that actually “Graduate”, emerge from the school system as semi-literate buffoons and thugs.
    In LA I think the drop out rate is about 30%.
    Cursive writing is too tough to learn, so everyone is dropping that relic of civilization.
    Ditto for English grammar, spelling, and those inscrutable fractions!

    Gary,
    I agree about the influence of a traditional family life on the academic performance of a student.
    I believe Utah is in the middle of the pack for per capital education spending but high up on the achievement test results.
    Anyway, if the people of Illinois want to see property taxes go up some more to pass out raises, so be it.

  • bc September 12, 2012, 10:02 pm

    Well viewers, the remaining contestants in the battle of the kleptocratic stars are: The Military Industrial Complex, The TBTF Bwankers , and last but not least our bloated but still politically potent public sector unions and educators. Let’s have a hand everyone for the winners who are still in the game. (Applause)
    As you may recall, private labor leaders and industrial oligarchs left our show in tears last decade, joining their predecessors in agriculture, religion, and the professions.
    But enough about the past, on with today’s pre-game show. As you know, the Bwankers have been successfully hogging the spot light with a brilliant display of B.S. from their star player Benny B. Not to be outdone, the MIC team came swinging back with their own go-to play; an embassy attack! All eyes turn now to the public employee unions and our educators as their quarterbacks make a critical call. Will they go with a standard strike play, or will they trigger municipal bankruptcies and bond defaults? Ooh the excitement is almost too much! As you fans already know, anything can happen so stay tuned to this all oligarchic network.

    • Rick Ackerman September 12, 2012, 10:23 pm

      And shame on those who would deny Chicago teachers, whose current starting pay is $75,000, the 35% raise they seek! How will the school system ever attract top educators if all it has to offer is a current package that includes $16k of free, untaxed health benefits, 22 paid holidays, twelve-week-long summer vacations, 40 hour-max work weeks, accumulated sick leave and other such bare-bones amenities?

    • gary leibowitz September 12, 2012, 11:19 pm

      Yes I actually agree with Rick on this. Chicago Teachers Union is off the wall. Stupid is the word. The only grip I see as tenable is the political scapegoating relating to testing students and teachers performance. Since the requirements for becoming a teacher have not gotten any easier the past 50 years, the notion that the teachers are to blame for failing students is absurd. Why, all you have to do is break down the school districts by socioeconomic means and you will find good students are from good homes with parents that participate in their upbringing. I have never seen a study that shows anything different. Not politically correct to dare suggest this. In fact it is a one way ticket out of office. The other thing I find disturbing is that the failing schools, when surveying the parents, on average give a 90 percent approval rating. Guess the parents are as clueless as their kids. I would love to hear from teachers of the early childhood level, their take on why so many schools are failing. One other indication on schools’ performance is parent participation. Look to see what the structure of the PTA is.

  • Rick Ackerman September 12, 2012, 8:24 pm

    You should have a pretty good idea by now, Vlad, of what kind of remarks are going to get you censored. (And by the way, you are the only one who posts to the forum who requires censoring.) I dislike Obama every bit as much as you do, but your most recent disparagement of him would have been considered over-the-top even at ZeroHedge.

  • Rick Ackerman September 12, 2012, 5:14 pm

    Gary, you’re so fixated on disagreeing with whatever I’ve said that you seem not to be reading anything but the headlines on my commentaries. What today’s commentary makes explicitly clear is that it is the shakedowns that are being manipulated, not the rallies (other than increasingly frequent, short -squeezed opening-bar bull traps), which are occurring organically within an ongoing bull market.

    You can keep your head stuck in the sand and insist there is no such thing as manipulation, but speaking as a trader with nearly 40 years of experience, twelve of them as a market maker on an exchange floor, I can say that institutional thieves have seized day-to-day control of Apple within a larger bull market; and that, furthermore, they absolutely can and do create and exploit the wild swings we see all the time. Also, a very large percentage of trades are done by institutions front-running their own customers.

    The world’s securities markets are a vast, cleverly rigged carny game, Gary, and although you don’t have to know that to make money trading, you needn’t go through life with blinders on, naive and unsuspecting.

    Finally, you need only check my archives to see that I have never put out a long-term bearish call on Apple, even when I was recommending legging into all-but-riskless put spreads. Just this morning, during my weekly tutorial session for Hidden Pivot Course grads, I aired a target of $818 for the stock (which is currently trading for $661).

    • gary leibowitz September 12, 2012, 7:59 pm

      I did re-read your post and see your point. I also see the whole Q’s going down at the same time. I know the overweight of AAPL but I can’t conclude it was acted on differently. A sharp move up always brings sellers to play. AAPL had a huge move up for a long time now. I just can’t read into any correction other than the obvious profit taking. The introduction of a new product always brings on speculation and sharp daily moves. I still can’t conclude it was a trap play.

      You have tried to pounce on this stock for a long time now. I understand the temptation of a high flier. I also know you hedge and have done OK with them. I just don’t understand the obsession and expectation of a large crash. In any environment?

    • gary leibowitz September 12, 2012, 9:11 pm

      Just like to add that I know you trade AAPL both ways. My reference to a crash is related to the whole market. You do seem to be obsessed with this high flier though. You do love to extrapolate the worse case scenario when your technical indicators suggests the slimmest of possibilities.

      As for disagreeing with you, that is not always the case. More time than not I can’t understand why you see all things as an aversarial event. Surely you must see that the last 4 years were interpreted correctly by the markets. No extremes in valuation, yet at every turn all I hear is how the “fix” is in.

      You might disagree with the way the world goverments are responding to this crisis, as I do, but that has nothing to do with investment decisions. I find it hard to follow the hidden conspiracies when most of them have turned out to be false.

      Finally if AAPL is being manipulated as you say wouldn’t that hold true for all high profile stocks? If you know that than why “guess” their intent. If you can profit by knowing what they will do before hand than you have beat the system. I believe Monday there was a lot of guessing as to what the German courts will decide on the fate of the bond purchases. Call me naive but I can’t go thru life expecting every event that goes against me to be construed as a “fix”.

      On an emotional level I can’t see how companies should profit by our hardships but they have and with valid provable reasons. I don’t like it but do acknowledge the fact. In fact I am making money off this fact. My theory goes that when the debt bubble started to break there are areas that burst and others that fill the vacuum and actually inflate. The financial disaster created an environment for corporations outside this segment to take advantage. Thier survival mechanism took over and with it a lean and mean attitude. The end of this debt debacle takes time and when it is done will break all bubbles where none is left. Just my own home grown theory, but one I will follow till it fails.

      &&&&&&

      The epic lies and raging hubris that currently sustain the global financial system are so thick and egregious, Gary, that only a horrific crash can set things right. Meanwhile, don’t you find it even a little disconcerting that the most valuable company in the world is a purveyor, albeit a very successful one, of mere consumer gadgets? Or that America’s last hurrah was in a category, “Financial Superpower,” that was never more than economically superfluous relative to the world’s output of real goods and services? When China emerges from the rubble of global Depression in perhaps ten or fifteen years, do you think they will even remotely care about being a ‘Financial Superpower’? RA

  • Bam_Man September 12, 2012, 4:33 pm

    I have been saying for almost a year now that “When the stock of the most valuable company in the world becomes nothing more than a Hegde Fund/HFT plaything, it’s time to stop trading.”

  • gary leibowitz September 12, 2012, 4:11 pm

    No conspiracy or manipulation since it has been on a tear for years. You can’t explain away years worth of sharp upward moves. The earnings have not disappointed. That is all that matters. It’s P/E ratio is not out of the norm. Why in the world would you say it’s being manipulated? At the end of the day earnings tell all. I am at a loss for words when the stock doesn’t do what you expect and the conclusion must be it was manipulated. You can’t manipulate such a huge market. For years? No way, no how. I suppose their profits must also be fake and our government allows this manipulation to occur.

    I see this latest very tame move down as a normal consolidation. In fact while everyone is expecting the whole marlket to have a steep correction I see the exact opposite. It will break out soon, and when it does AAPL will lead the parade.

    Every single time APPL falls you declare it has broken down. Rick was quick to declare the last drop to me as a breakdown yet he can’t show me the technical breakdown if it really occured. it didn’t. This is a fact. Using technical analysis it is nowhere near breaking down. I stated before and will so again, it is in a well defined upward channel. In fact it is more likely a breakout is about to happen than a breakdown.

    How do people stay on a one track obsessive notion? For 4 years the markets have gone against the doom and gloomer. 4 years? Yet here we are today ignoring or dismissing that period as some strange anomoly, instead of trying to understand how the market thinks. Surely you must realize the market is right much more than wrong. Surely you must realize earnings have not been faked. Surely you must realize this economic turmoil for the average man is actually beneficial to corporations profits and earnings.

    Facts: Corporate Productivity the best and longest streak it has ever enjoyed.

    Fact: Top tier individuals have never seen such a huge rise in their money growth.

    The above two are not disputed by anyone. No twisting or skewing of the numbers and charts can show it any other way. This might also seem absurd given the economic condition we live in. Just as the stock market thrived in this environment. It certainly is not fair, but life isn’t fair.

    Sorry, but my bet is for AAPL to break out, and soon. To bet against a well defined trend it treacherous. Isn’t it always bettrer to wait for a clear breakdown since most reactions to a fall below trend is to counter rally. Isn’t it best to wati for the counter-rally after the breakdown?

    Did you just see the German Courts gave their blessings. Thats all THIS market needed. Now we focus on domestic earnings only.

  • John Jay September 12, 2012, 3:08 pm

    I don’t follow AAPL but from what I have accidentally gleaned from the financial news it seems AAPL is one stop shopping for the giant hedge funds. No daily heavy lifting of investment decisions required, just watch it go up and collect your 2/20 and everybody is happy.

    The attack on our Consulate in Libya that cost four Americans their lives just goes to show, sow the wind, reap the whirlwind is still operative. I doubt Col. Gadaffi would have let that happen. Over in Egypt the Arab Spring there means the garbage is no longer being collected and is piling up in the Egyptian heat. Some of the locals are now regretting giving their erstwhile dictator the boot. I argue that it is exactly what DC wants for MENA, a return to 700 AD to make our Treasuries look as good as gold. Our ever increasing National Debt, Trade Deficit and Dollar Creation means we have no fiscal options remaining to us. All we have left is Global Treachery, and boy, are we good at that!


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