Apple-0.09% continued falling on Tuesday and Wednesday, -5% on each to 20.8m which is 45% below the 1 month average at 38.5m and 50% below the 6 month average at 40m.
This is IMO as it shows that at these prices holders are not willing to sell their AAPL-0.09% risk at these prices, as they seek higher prices before they offer higher supply, hence stays low and the stock trades with a bid bias - hence the gap up at the open today - illustrating the disequilibrium caused by low supply side liquidity and maintained order demand.
However, has contracted significantly every day this week, losing over 20% since the week start, providing a promising environment for apple-0.09% growth, but the stock has struggled to hold onoto any gains, with candles often closing in the lower 25% quartiles of their ranges - indicating the stock isnt necessarily looking to push up yet.
IMO the stock requires more new buyers, it isnt a selling problem its a demand side issue. With the SPX0.33% rising, it shows liquidity is increasing in risk assets so im not sure why apple-0.09% isnt receiving some of the new liquidity and posting upside gains.
Volatility & Apple-0.09% vs VXAP Correlation
We continue to have a view from a vols perspective as implied vols dropped yesterday over 1% to 20.90. Apple-0.09% vol0.00% carries the trend with , falling every day this week and now sits at lows from June 2015.
Also the correlation between APPLE-0.09% and its Implied index continued to maintain deep into negative territory - at 93% falling marginally from 94% yesterday. This reinforces the signal - as historically, a higher negative relationship sets the best environment for Apple-0.09% growth.
However, the correlation dips slightly, as PRICE that is starting to fail the relationship - as when correlation falls price SHOULD rise hence the high negative relationship. However, price is trading flat/lower thus the correlation is becoming more positive (lower vols and lower price = positive corr)
Both the falling implied vols and , all of which in record setting/ areas provide the perfect environment for growth so as per the last 3 days I am on apple-0.09% and STILL expect a $100 break out to 101/2 this week, though the probability falls significantly, but thrusday is usually the best day for gains, with friday being the worst.
These indicators make me especially as the lower and vols are occuring whilst apple-0.09% trades close to 100USD, where usually, the psychological level causes to spike as the uncertainty causes sellers and buyers to flood the market - Which as a result also cause to spike.
Given that we havent see this, apple-0.09% should be comfortable with a price hike and is showing strong signs that this is the case.
I feel apple-0.09% needs some upside stimulus at these prices and it will cause a cascaded rally from 100 to 1005+ in a short period of time. We just need to get past this 100 level, which keeps growing its strength every day