Hours before Apple announced its earnings late last month, a trader at a small Connecticut brokerage firm placed a bet on the outcome of the technology giant’s results. It was the sort of speculative trade that happens any given day on Wall Street.

But the series of purchases, executed just before the market closed, now threaten to bring down the boutique brokerage firm, Rochdale Securities.

The trader, David Miller, bought roughly $1 billion of Apple stock, a far larger position than Rochdale had ever handled. After the trader bought the shares, Apple — a notoriously volatile stock — dropped in value, costing Rochdale million of dollars.

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The losses at Rochdale have crippled the small brokerage firm. The firm has a capital cushion of only about $3.5 million supporting its operations. Theories are now circulating inside Rochdale about what went wrong.

Some potential investors in Rochdale were told that the errant purchases were the result of a “fat finger.” That is, the trader intended to buy 165,000 Apple shares but the order was executed at 1.65 million shares.

http://dealbook.nytimes.com/2012/11/...t-apple-trade/

Apple Is in a Multi-Year Decline, Shares to Fall 50-70% Says Schatz

Shares of Apple (AAPL) are trying to stage a comeback after a rough stretch took the stock into bear market territory last month. The downturn came as no surprise to Breakout regular Paul Schatz, president of Heritage Capital, who has been calling for an Apple sell-off since last April when he predicted a 30 — 50% drop was near.

Apple shares fell as low as $505 on an intraday basis in mid-November, off as much as 25% from the all-time high of $705 hit when the iPhone 5 launched on September 21st. The stock has since recovered from bear status, but sentiment remains damaged.

"If you're a trader, I think Apple has some upside left in it," says Schatz in the attached video. "But what we saw in that twenty-plus [percent] decline was just the first leg down of a multi-year decline, which I think ends up knocking 50 to 70-percent off the stock."

Schatz sees any pop as an opportunity to sell your position. And if you own a lot of AAPL, in his opinion, it's time to lighten up your holdings or use some options protection.

"If your thesis, like mine, is that long-term Apple is going to be sub-$500 or sub-$400 [a share], then you can't get too greedy on the upside, because the upside is going to be fleeting," Schatz says.

"Whatever resolution we get with the fiscal cliff, whether it's good or bad, it's going to lead to problems with the economy, and Apple's gonna take it on the chin."

http://finance.yahoo.com/blogs/break...131608918.html

Apple share holders did not have a good day today, with the company losing $35 billion in value today on fears that its margins are being squeezed, that it is losing tablet market share, and crucially that the company was edged out by Nokia in negotiations to have their smartphone released on China Mobile, the world’s largest carrier with 700 million subscribers.

Nokia today announced that they will be releasing their flagship, the Nokia Lumia 920T, on China Mobile’s network before the end of the year.

Meanwhile Apple will be selling their iPhone 5 on the much smaller China Unicom and China Telecom.

“Nokia announced that they are launching one of their Lumia phones with China Mobile, and there was some hope that Apple would launch their iPhone on that network,” Gus Papageorgiou, an analyst with Scotia Capital Inc. in Toronto, said in an interview.

While the iPhone has become Apple’s profit centre recently, more bad news has been that consumers are increasingly opting for cheaper models, such as the iPhone 4 and 4S instead of the 5, and the iPad Mini instead of the more profitable iPad. It seems Apple, who previously could do no wrong, is developing an increasing crisis of confidence in the market, with its share price more than 23% down from its September peak.

Nokia on the other hand is hitting a 6 month high, with its after hours price hovering around $3.90 at the time of writing. Good news include its China Mobile deal, and the release of the cheap mid-range Nokia Lumia 620, which should bring significant volume to Windows Phone 8.

Shares of Apple are down nearly 24 percent from their record high of $700 back in September, and the stock is now trading in the feared "death cross."

That's when the 50-day moving average drops below the 200-day moving average and is considered a strong bearish sign. Apple reached that point on Friday.

Apple's record after the "death cross" certainly isn't cause for optimism.

Since 2000, there have been six instances when Apple's passed through the "death cross." In five of those instances, the stock was down more than 5 percent one month after the crossing, with an average loss of 10 percent.

Apple shares rebounded on Monday after a weak open. Jefferies slashed its price target on the iPhone maker to $800 from $900.

The reversal of fortune has been jarring for a company which, just a few short months ago, had a high-flying stock that made it he world's most valuable company.

In 9 of the last 11 weeks, Apple closed in negative territory, losing over $150 billion in market cap value.

Apple's 'Death Cross' History
Date 1-Month
Sept. 2008 -27
Feb. 2008 14.4
Jun. 2006 -12
Jul. 2002 -17.7
Sept. 2001 -13
Jun. 2000 -5.7
Average -10.2