Monday, 13th September, 2021
1/ Indexes slow the selling at support
2/ Apple buyers stubbornly hold support
3/ How Apple performed during past product launches
4/ The bottom line
1/ Indexes Slow the Selling at Support
Major indexes pumped the brakes on a slide that started last week. State Street’s S&P 500 (SPY) and Dow Jones Industrial Average (DIA) index ETFs halted their five-day skids. DIA led major index ETFs, climbing 260 points, followed by the iShares Russell 2000 ETF (IWM). Invesco’s Nasdaq 100 ETF (QQQ) nearly rallied to finish above its close, but instead ended the day with a 0.07% loss. Was last week’s pullback just a pit stop before moving higher, or a sign of a larger reversal?
Investors could be waiting for the numbers of tomorrow’s Consumer Price Index (CPI) report. This index, which measures the change in the price of goods and services purchased by consumers, accounts for a majority of overall inflation. An increase in inflation could bump up the Federal Reserve’s timeline for tapering bond purchases.
2/ Apple Buyers Stubbornly Hold Support
Despite investors having recently bid down shares of Apple (AAPL), option traders appear to be positioned with the expectation that the iPhone maker will re-approach its recent highs. After falling more than 3% Friday following an unfavorable court ruling regarding app store commissions, the stock remained mostly flat ahead of the iPhone 13 release on Tuesday.
Heading into the trading session, AAPL’s open interest favored calls over puts – 5.1 million to 4.1 million. Trading volumes on Monday saw calls outnumber puts nearly 2-to-1. Option traders appear to be unfazed coming off of AAPL’s largest one-day loss since March amid widespread concern about an impending market correction.
While the share price movement after Friday’s tumble didn’t express immediate investor sentiment one way or the other, option traders have made their opinion clear on AAPL re-gaining, and perhaps exceeding, recent highs.
3/ How Apple Performed During Past Product Launches
Many investors may have decided to stay on the sideline with AAPL due in part to the iPhone 13 release tomorrow. Historically, iPhone releases have not been a major catalyst for intraday movement for AAPL. The stock has fallen on 72% of previous product release days. The average decline during those days was less than 1%.
However, 30 days after an iPhone release AAPL stock, on average, rises 1.3% from the day of release. AAPL averages a further 0.88% increase 60 days after an iPhone release. After the last three iPhone releases, AAPL stock has gained an average of 17.9% after 60 days. While the release day itself may not be the biggest catalyst for price movement, it could be seen as a tentpole for price movement in the near term.
4/ The Bottom Line
Stocks seem to show subtle signs of buying at support. However, with Apple’s new product launch just around the corner, investors might be uncertain about what to do next.
Originally posted on 13th September, 2021
Investopedia.com: The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy. This information is intended for US residents only.
Disclosure: Interactive Brokers
Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Investopedia and is being posted with permission from Investopedia. The views expressed in this material are solely those of the author and/or Investopedia and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.
Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.
Disclosure: Options Trading
Options involve risk and are not suitable for all investors. For more information read the Characteristics and Risks of Standardized Options, also known as the options disclosure document (ODD). To receive a copy of the ODD call 312-542-6901 or copy and paste this link into your browser: