Polite reminder: Nothing really matters today except whether or not Apple can impress investors with its latest earnings, set to be released after the market close.
Remember September 28th?
That was when a mini flash-crash in Apple shares alone appeared to cause a mini flash-crash in the entire Nasdaq. Once rumours of Apple COO Tim Cook’s departure were quashed, Apple investors cheered and the Nasdaq recovered, as shown by the reproduced September 28th charts below.
As previously highlighted, many believe the outsized effects of Apple on the market are likely caused by the company’s near-20% 20.92% weighting in the Powershares QQQ Trust ETF (QQQQ).
Yet to make things a bit more complicated, Apple likely has to beat not just its stated guidance, which it frequently low-balls on purpose, but also its implied real earnings expectations (including the assumption that official guidance has been low-balled) which Dan Frommer has calculated here.
So really it’s probably this simple — If you’re not comfortable to hold AAPL shares ahead of this afternoon’s earnings, then you shouldn’t be comfortable trading the market into tomorrow. And vice versa.