The normal routine in the stock market is that professional traders and hedge funds profit at the expense of mom and pop.
This time, in the case of Apple (AAPL) the tables have been turned. Professionals have been caught with their pants down to the benefit of mom and pop.
Traditionally, Apple stock has a pattern of running into a product announcement and under-performing for about 30 days after the product announcement. Professionals tend to prepare well in advance to profit from this pattern. They start building positions well in advance of a product announcement, sell on the news of product announcement, then go short and cover at lower prices in three or four weeks.
Retail investors tend to buy on the news of product announcement. Professionals who have been buying early are more than happy to unload their stock to mom and pop. In other words, professionals make money both on the upside and the downside.
In the case of Apple, since the stock keeps on going higher and higher, the foregoing pattern has not hurt retail investors, but that is not usually the case in most other stocks.
In a rare occurrence, on the news of the Apple iPhone 5 launch professionals have lost money and retail investors have made money in the very short-term.
Apple experienced an unusually strong ‘outside day’ prior to the iPhone 5 launch. Please see Ominous Chart Pattern Precedes iPhone 5 Launch.
While most mom and pop were oblivious to the outside day in Apple stock, professionals took it seriously….Read More at Forbes
