One of the indicators I tend to watch in indexes is how the volatility is moving with the index…
When we see the SPX and the VIX going up at the same time, that is not always bearish, but it is rarely bullish for the S&P 500.
I bring this up, because of what is going on in VXAPL: The VIX of AAPL
While AAPL stock is off to the races over the last two days, the index has done something funny….
It has rallied…
It is now higher than it was before AAPL even announce earnings.
Which is really unusual.
Part of the reason has to be the increase in movement. (its not like AAPL has been making small moves)
But part of it is probably the fact that AAPL in the last year has gone from a stock with a PE of 9 to a PE of 32.
I would guess that there is a lot of call buying by people who are ‘chasing’ the stock.
When calls start getting chased, that can be a sign that the top is near.
Who knows, maybe AAPL goes to 500 before it splits.
But, this stock is starting to feel like its setting up a bunch of people to get left holding the bag.
The VIX Light is Red
Your Only Option,