AAPL: Apple's Institutional Slingshot: Rational Explanation Of Irrational Stock Action

Apple's Institutional Slingshot: Rational Explanation Of Irrational Stock Action
by Jason Schwarz

Since 2009 our observation of the Apple slingshot has been adopted as a defining characteristic of Apple stock action. The term 'Apple slingshot' immediately makes sense to those who realize that institutional buying and selling of Apple stock is a more reliable explanation of its deep selloffs and skyrocket rallies than any particular fundamental strength or weakness. As this slingshot terminology has morphed into mainstream vernacular we've noticed that some still fail to understand the underlying forces that produce the slingshot action. Let's begin by explaining what the slingshot is not. The Apple slingshot is not a hedge fund conspiracy. It is not caused by any of the negative rationale that you may hear in the media which includes the underwhelming launch of Apple Maps, the lack of innovation from Tim Cook, iPhone 5 supply constraints, iPad mini cannibalization, Samsung competitive threats, the earnings miss, and of course the absence of Steve Jobs. To the uninformed, these variables sound reasonable enough to support a selloff but to those who understand Apple's historical stock precedent these reasons appear to be nothing more than noise. Seasoned Apple investors know there is more to it. read more »

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