Apple enters correction territory: More carnage to come?

“The tech giant is in correction territory and sitting below its 200-day moving average after dropping nine times in the past 10 trading sessions. It’s on pace for a 10th decline in 11 sessions Tuesday,” Kristen Scholer writes for The Wall Street Journal. “The stock is now only up 4.5% on the year, almost three percentage points above the S&P 500’s gain. That’s after Apple was up by as much as 18% for 2015 in April.”

“Since Apple reported earning July 21, the stock has been under pressure. Shares slid 4.2% in the session following the release after the tech giant’s iPhone sales missed some analyst forecasts,” Scholer writes. “Since then, shares have only risen one day.”

“John Spallanzani, chief macroeconomic strategist at brokerage GFI Group Inc., attributes the carnage to concerns about China and a ‘technical breakdown’ when shares fell below $120,” Scholer writes. “Once Apple shares slipped through $120, Mr. Spallanzani says options traders began to hedge their bullish positions, driving the stock down further… If they sink beneath $110, Mr. Spallanzani thinks traders will hedge again…taking the stock lower.”

Read more in the full article here.

MacDailyNews Take: More carnage to come? For the sake of Apple’s buyback program, let’s hope so!

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  1. A giant, ridiculous game, with no more reality than a session of Monopoly…

    ‘empty concerns about China and bullshit fantasies’ when shares fell below $120,”
    Scholer writes. “Once Apple shares slipped through $120, Mr. Spallanzani says options traders began to engage in dumbass manipulation and gambling, driving the stock down further… If they sink beneath $110, Mr. Spallanzani thinks traders will double down on their bullshittery…taking the stock lower.”

    1. My main question is why it isn’t happening to companies like Google, Amazon and Netflix or even Microsoft. Why only Apple? I suppose if you have money to buy, it’s a good thing. What makes Apple so different from other similar stocks? Apple’s movement makes no sense to me because I don’t see what’s causing it. Is only Apple this vulnerable to options traders and not other companies because of a particular weakness?

      1. The simple answer is unlike its peers AAPL has an inordinate amount (>60%) of their value dependent on a single product line, the iPhone. Anything seen to affect that product line triggers massive movements.

        1. Agreed.It’s an iPhone company. At least for now it’s an iPhone company. And probably for the for foreseeable future it will be an iPhone company. I believe that Apple is trying very hard to expand their revenue base into other areas. A video streaming service will really make a difference in the company. And I know that they are working very hard on that. Apple Pay, music and wearables will help the ecosystem plus generate unknown revenue going forward. They need to correct their attempts at delivering services. But iPhone sales only disappointed the analysts projections for the third quarter just ended. In reality, Apple had unbelievable iPhone sales. However in the real world you have to deal with Wall Street and I expect AAPL may go even a little bit lower. But this is a good buying opportunity. Now and or a little bit lower.

        2. Incorrect, their dependence on one product is not the reason.

          Google is more dependent on web search for revenue than apple is for iPhone and it trades at a multiple of 30.

          Second- apple has no peers to compare to. None. You can compare parts of one company or combinations of several companies but there is no company on earth with Apple’s integrated hardware software services portfolio.

          1. While true that GOOG/GOOGL has a bit more invested in Search for their valuation, it can also be said there are less factors presently ‘attacking’ it compared to iPhone. Also Search is relatively uniform in use across countries and platforms compared to sales of iPhones being affected by regions.. News about China at present has a lot more influence on AAPL than GOOG/GOOGL due to Google’s minimal exposure there.. I think it is majorly Baidu there if I recall.

            1. There is lots of negative press about Google. Google has been in trouble in Europe for a while, and they have had multiple beta failures and a great deal of bad press regarding Glass.

              You might notice that the rationale for the responses of stocks (and the stock markets, in general) tend to come after the price moves – they are reactionary except in rare instances of major global events, such as wars, natural disasters, etc. if you can only explain things after the fact, it is not of much value.

              In addition, the stock market is highly emotional. Why else would there be an entire investment strategy based on momentum?

            2. Totally agree that there is bad press for Google.. Mostly affecting minor portions of Google like Google Glass. Until something majorly affects their breadbasket Google Search I really don’t see GOOG/GOOGL actually moving as much as AAPL.

        3. Unlike it’s peers?!?!?! Netflix only streams subpar movies and television shows. Why don’t they broaden their product offerings by doing something like selling smartphones. Google is around 88% advertising. What about Facebook? 100% revenue from advertising. At least Amazon attempts to sell their own stuff, but I’m pretty sure they make most of their revenue by selling other people’s stuff. Maybe Amazon should go into the electric car business to diversify. Holy smokes, what happens if the Internet goes down for an extended period of time? No Amazon sales. No Google and Facebook advertising sales, and no Netflix movies. At least consumers can visit an Apple Store to make a purchase.

          Apple gets a low valuation because people hate the company and the customers that buy the products. It’s visceral. Do you ever hear the hate spewed about Netflix on the blogs? Not even Comcast gets as much hate. The Bear raid over the last few days has been atrocious, filled with lies and hate. I’ve seen some of these same types on cam sites around the holidays. They try to convince people to kill themselves. They are sick and get pleasure from others suffering. They hate everything Apple represents and will do anything to bring down the company.

      2. Aplle buyback program is the big difference!
        Why dont i see any analysis on how great and welcomed this price drop is for APPLE and their buyback program ….. Allows them to remove much more stock from the float.
        Apple reconfirmed at their last RECORD BREAKING earnings…
        ” we believe our stock is very undervalued and we are very confident of our future product lineup … Hence the attractivness of our buyback program ”

        If u believe the above statement by Apple and are a longterm stock holder…then hang in there and rejoice the short term price drop.
        If you dont own shars.. Then this is just as much an opportunity for you to get in as it is for apples buyback program !

      1. Totally agree you would be pretty ill advised to sell at that point. I think it would be still be terrifying if it remained around there for a long while afterward.. 😛

    1. I can see Netflix crashing very soon. Apple might go down a little more but that’s about it. If people think China is gonna be a problem for Apple, then they don’t understand the Chinese mentality well enough. Factory workers in China don’t have a problem buying quality products!

        1. Did a search.. Seems the post split price was actually $92.. I guess then it’s even more of a horror if it dropped to $70.. 😛 This means the stock is only about $20 above post split price instead of the $40+ I thought it was. Yikes!

  2. This just means one thing! Find some money and buy more Shares. Apple Shares have always traded illogically. Anyone who knows apple and invests in Apple knows that when we have these dips we have huge peaks to come. It may not happen this month but it will happen and when it does get to $150 – $200 a share anyone who didn’t buy now will be kicking themselves that they didn’t shop in the early August sale. Im trying to get some funds together as we speak!

  3. Again: Boring, I know. But an actual ‘correction’ will be UP in price for AAPL. This is no correction. This is manipulation. Ignore it and wait for the actual correction. OR, join in with the manipulators and buy at the bottom of this little joke.

  4. The hedge fund managers are trying to force Tim Cook into giving back more and more of the cash that Apple has built up greed is the reason why the stock is falling like it is. And once they have taken all the money they will abandon Apple like an old shoe

  5. And something I have been thinking of for awhile: why am I or others on here defending the company? Why isn’t there a dedicated team of Apple bloggers that defend the company on Apple-centric sites, tech sites, and stock sites like Stocktwits? This is not 2007. Today, information is shared instantly. Then people comment on it and share it again.

    Apple is the most visible company in the history of the world. At least 50 percent of the American public and others around the world touch their products every single day – it’s personal, so a lot of people talk about it. Apple needs a face(s) that is/are always out there pushing the narrative and reminding people to feel happy they are driving Apple’s products.

    The current approach is not working. The media has been relentless in their Apple attacks. Comcast’s staff and guests have eviscerated Apple over the last several days. The response from Apple has been silence. Apple is losing the PR War and the stock and company’s image is getting crushed.

    This always visible Apple face should be on financial television shows, on talk radio, in colleges, etc. This person needs to be familiar (maybe a celebrity), they need to know the products, they need to be a tech geek, but not a dork about it, they need to be a bulldog to stop the hate, but they also need to be cordial and funny.

    A front person for Apple is as important as the design and quality of the products. This person should be as important as a VP, so someone like Barack would be an interesting choice, although he could be too political. Phil might be a good choice, but the job requires a lot of traveling, so maybe he is not up for that. It’s a tough choice.

    And while I’m on a soap box – This whole Apple secret thing is hurting the company. Apple is the leader now, so why should they care that the competition comes out with competing products? For example, many want to know if Apple is building a car. People should know the specifics so they can get excited about the future. They then will make an iPhone purchase instead of a something else purchase. So, if Apple is building a car what can they tell us? Is the phone going to be incorporated somehow? Is it going to be solar powered and drive 1000 miles before a charge? Is it going to have wrap around screens? Sure, these might only be goals right now, but it would capture imaginations and keep the magic alive.

  6. This will help apple’s buyback. BS.

    The buy backs are the biggest scam costing Apple shareholders while WS laughs. Let me sum this up assuming $40 billion in buy backs.

    Loan $40 billion WS fees (30 basis points): $120 million
    Buy shares transaction fees: (30 basis points): $120 million
    Sell shares transaction fees: (30 basis points): $120 million
    Based on the fact that buy backs are negotiated prices and past history (Q average pps was 124 while buy back price was 134) WS has another spread of 10/124 = .08 x $40 billion = $3.2 billion.

    Total WS: $3.5 billion while Apple share holders loss in equity $150 billion from price manipulation. Mind you this is not counting the options sales that WS can arbitrage based on the negotiated price of the buyback.

    Cook is so naive. They are after him. They want another ex-soda salesman like in there. Already other carnival barkers are after that position. They are salivating about the chance to get a piece of the cash hoard.

    Why do you think one company is trying to say that they are in the forefront of car and battery technology? Their genius of a CEO will then be first in line for replacing Cook. Apple’s skunk works is partly about cars and batteries. Cook will be/is being stabbed in the back by apple’sfinancial folks and the board of directors.

    Now if the buy backs were instead pure dividends the stock would not have lost its value. The clamor will rise for Cook’s replacement.

    With another ex-soda salesman like person in place, apple’s technology will be shared with others plus ARMwill be replaced by intel. You can iCal this.

    It is both comic and tragic that Cook has given WS the funding/means to do what they have always wanted to do to Jobs. I really miss the guy. He was the only one who could stand up to these shysters.

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