APPLE 4% ALGO SPIKE? LOWER VOLS & VOLU; HIGHER NEGATIV VOLS CORR
Updated
Algo spike 4% to $101.8?
At 18:19 BST Apple stock surged from 99. to $101.8 and back again all within a minute.
It was Likely to be algo driven OR a data/exchange error - though no news outlets reported either or offered any other speculation.
Though $101.8 is the closest near by resistance strong hold for apple, so it would be a weird coincidence for a "data error" to trade to that price - equally as possible none the less.
IMO, because there was little volatility after the event and also because Apple is now struggling to break the $100 i think it was probably a data/exchange error. If it was an actual demand induced algo spike, the stock would have experienced signifcant price volatility after the event as much of the markets TP/SL levels would have caused a large wave of stochastic automated buying/selling as positions are closed out.
Further, if the spike was real, apple should have been able to trade above $100 easily today;
1. As $101.8 would be a clear bull target level.
2. as the spike would have removed all of the 100TP selling pressure last night - meaning there would be little volume left to continue long squeeze selling today (which annoyingly has been the case).
Volume
Apple Volume fell significantly on Monday by 40% to 23m vs 39m (1month av.) and 43m (6month av.).
In the first half of trading today, volume was also 7% down from yesterdays first half at 11.23m vs 12.0m - signalling today may continue the bullish trend.
This is Bullish IMO as it shows that at these prices holders are not willing to sell their AAPL risk at these prices, as they seek higher prices before they offer higher supply, hence volume stays low and the stock trades with a bid bias - hence the gap up at the open today - illustrating the supply & demand disequilibrium caused by low supply side liquidity and maintained order demand.
Volatility & Apple vs VXAP Correlation
We continue to have a bullish view from a vols perspective as vols dropped yesterday despite an algo driven spike to $101.8 (4%). Apples CBOE VXAP continued to sell off, closing yesterday at 21.64 from 21.73 Friday.
Also the correlation between APPLE and its Implied volatility index continued to fall deeper into negative territory - surpassing levels seen in the last bull run to $112 which peaked at 90% (92% to 94%), This reinforces the bullish volatility signal - as historically, a higher negative relationship sets the best environment for Apple price growth.
At 18:19 BST Apple stock surged from 99. to $101.8 and back again all within a minute.
It was Likely to be algo driven OR a data/exchange error - though no news outlets reported either or offered any other speculation.
Though $101.8 is the closest near by resistance strong hold for apple, so it would be a weird coincidence for a "data error" to trade to that price - equally as possible none the less.
IMO, because there was little volatility after the event and also because Apple is now struggling to break the $100 i think it was probably a data/exchange error. If it was an actual demand induced algo spike, the stock would have experienced signifcant price volatility after the event as much of the markets TP/SL levels would have caused a large wave of stochastic automated buying/selling as positions are closed out.
Further, if the spike was real, apple should have been able to trade above $100 easily today;
1. As $101.8 would be a clear bull target level.
2. as the spike would have removed all of the 100TP selling pressure last night - meaning there would be little volume left to continue long squeeze selling today (which annoyingly has been the case).
Volume
Apple Volume fell significantly on Monday by 40% to 23m vs 39m (1month av.) and 43m (6month av.).
In the first half of trading today, volume was also 7% down from yesterdays first half at 11.23m vs 12.0m - signalling today may continue the bullish trend.
This is Bullish IMO as it shows that at these prices holders are not willing to sell their AAPL risk at these prices, as they seek higher prices before they offer higher supply, hence volume stays low and the stock trades with a bid bias - hence the gap up at the open today - illustrating the supply & demand disequilibrium caused by low supply side liquidity and maintained order demand.
Volatility & Apple vs VXAP Correlation
We continue to have a bullish view from a vols perspective as vols dropped yesterday despite an algo driven spike to $101.8 (4%). Apples CBOE VXAP continued to sell off, closing yesterday at 21.64 from 21.73 Friday.
Also the correlation between APPLE and its Implied volatility index continued to fall deeper into negative territory - surpassing levels seen in the last bull run to $112 which peaked at 90% (92% to 94%), This reinforces the bullish volatility signal - as historically, a higher negative relationship sets the best environment for Apple price growth.
Note
Apple closed flat but volume dropped again by 4% to 22m from 23m and is still 40%+ below the average.Also vols dropped another 1.23% yesterday.
These are bullish signs, i think today we should see apple break 100, all we need is some more new buyers to help apple trade ask - the sell support is there, people are holding apple despite the $100 level - as indicated by the significantly low volume and volatility.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.