Apple Stock Pulled in Different Directions

NEW YORK ( TheStreet) -- Part of me would have preferred that Apple ( AAPL) postpone its dividend announcement in order to preserve this window of positive uncertainty that has generated Apple's post-earnings move from $450 to $600.

The market despises negative uncertainty, thrives on positive uncertainty, and pays little attention to certainty.

Uncertainty is the common denominator that creates volatility. Certainty has an opposite effect. Microsoft ( MSFT) stock is a great example of what happens when certainty arrives on the scene.

Apple CEO Tim Cook

Now that the Apple dividend is a certainty it will remove itself from the volatility equation. Yes, there is more uncertainty to come with earnings reports, the new iPhone, the iTV and Chinese growth but in the short run, we are interested in how this stock will react now that the iPad 3 has been released and the dividend has been announced.

So far this week the stock sold off $10 on Tuesday morning before staging a $15 comeback into the close. On Wednesday the sellers tried to increase their clout by waiting until 15 minutes before the close to do their work.

Apple was up as high as $609 before dropping to $602 at the close. These two examples demonstrate legitimate attempts to end the rally and begin downside snowball momentum in this quiet period before the April earnings report. Will the sellers succeed or will the institutional demand from income funds prove to be too powerful? The proof is in the price action.

Since the post-earnings run from $450 to $600 began, Apple stock has risen by the following dollar amounts per week: $25, $14, $35, $3, $16, $24, $0, and $37.

After Monday morning's dividend announcement the stock is up $4 this week. We are monitoring the post-dividend price action carefully to make sure that the dividend didn't cause a shift in the current trend. So far, so good.

It's important to watch how the week ends. These quiet periods following big announcements have a history of surprising the bulls to the downside. Even though the stock resiliency is stronger this year, it's worth keeping an eye on the situation considering we are at all-time portfolio highs and protecting gains is most important.

Perhaps the bears will use the iPad heat issue as the next iteration of Antennagate. In the short run, anything can happen. Stay vigilant.

At the time of publication, Jason Schwarz was long Apple.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Jason Schwarz is an option strategist for Lone Peak Asset Management in Westlake Village, Calif. He is also the founder of the popular investment newsletter available at www.economictiming.com. Over the past few years, Schwarz has gained acclaim for his market calls on the price of oil, Bank of America, Apple, E*Trade, and his precision investing in S&P 500 option LEAPS. His book, The Alpha Hunter, is set to be released by McGraw Hill in December 2009.