Saturday, December 15, 2012

A Chart Showing How Google Follows Apple's Stock Price

There is a very interesting correlation between Apple's stock price and Google's stock price. The trick is shifting Apple's stock price shifted 10 days ahead. Once you line it up with Google's chart, things become very interesting. First off, this correlation was not always there; I noticed the relationship between the two stocks increasing at the start of October 2012.

In the first chart, I have whited out the price prior to that date. What we see is, when Apple puts in important price bottom, or top 10 days later, Google mimics the same move. However, there are instances where Apple bottoms 10 days later Google puts in a top. This is called an inversion. And I am guessing we are seeing money shifting away from the two stocks, and the effects show up 10 days later (I have highlighted these inversions with red vertical lines), and not on the same day that many media outlets hypothesize. The right stock chart below, is an unannotated version for those interested in seeing the relationship in more detail. If you have a bearish bias, ( Google's daily chart looks like it may reverse downward) it looks like Google may follow Apple down the next two weeks, as opposed to inverting.