Apple is down almost $60, more than 10 percent,  after a disappointing earnings release.   The market just can’t handle the negative second derivative of earnings and revenue growth.

It’s stunning to think how fast Apple has gone from a great innovator growth stock, which, by the way, was never really was priced like one, to what is now perceived as the Coca-cola of technology.  That is, a company with a few good products.

The stock is in the midst of making that painful transition.  We have no idea where the it settles out and finds it footing after this shake out.  It’s a safe bet the market overshoots as it always does.

It also looks like the torch of innovation is being passed from Apple to Google.   There seems to be much less ambiguity is Apple’s future and therefore stock valuation  and ambiguity is good thing for momentum.  See our post,  The Ambiguity of Stock Value,  here.

The stock is now down almost 35 percent from its September 21 high of $705.07.  We were the biggest bulls on the way up thinking the stock was invulnerable and cheap even at the top.  Maybe the bubble was in the fundamentals — the consumer’s  insatiable appetite for Apple’s products at the time.  Or, maybe, it was an intellectual bubble thinking that appetite would never be satisfied.

Nevertheless, just goes to show flexibility and discipline always trump conviction.  Never marry a position.

(click here if charts are not observable)