On Wednesday, the news broke that two big-time hedge-fund managers dumped their Apple stock in the first quarter of 2013. Interestingly, an analysis of the tick data foretold the news a day earlier. Analyzing tick data with computer algorithms is akin to the manual tape reading of years past. With some practice, an investor manually observing tick trading data can come close to what computer algorithms accomplish.
According to an SEC filing, David Tepper, who manages $17.9 billion at Appaloosa, dumped 370,661 shares of Apple in the first quarter. At the end of the first quarter, he still owned 540,000 shares of Apple.
Another filing with the SEC for the same quarter shows that Julian Robertson, at Tiger, dumped his entire stake of 42,125 shares in Apple.
These filings were preceded with negative action in the Apple stock price Tuesday in a strong market tape. Analyzing Tuesday’s action I wrote before the news of the filings, “My algorithms that dissect tick trading data to decipher footprints left by different types of investors were detecting aggressive selling by the smart money from the get-go. The aggressive selling by the smart money continued through the morning, and finally the bids were swept, and the stock fell out of bed in the early afternoon as shown on the chart. The overall market continued its march upward, but Apple stock never recovered.”
The news from Wednesday illustrates the beauty of analyzing tick trading data. Now we know that the selling Tuesday was in anticipation of the SEC reports to be released Wednesday. It does not mean that somebody had inside information. Sharp traders would have simply guessed. SEC filings are required to be filed within 45 days of quarter’s end, and Wednesday was the forty-fifth day.
We knew the smart money was aggressively selling Tuesday morning simply by our algorithms analyzing the tick trading data….Read more at MarketWatch
