Often wrong, never in doubt. – Bill Fleckenstein

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Q: Cryptocurrencies: It’s just Candy Crush
by Richard Berstein

Candy Crush Cryptocurrencies

Q: Hey Bill,

Regarding your AAPL position - how does the fact that the company has a potential $200bn back bid from buybacks on its stock impact your thinking and timing? How are you factoring in the company has said it will discuss its capital allocation and return of capital strategy soon (I think on their earnings call)?

Is your short targeting more of a quiet period type time frame or is it more of a fire and forget type position?

As always - thanks for sharing your opinions...

Q: Wiggle up, wiggle down, ad nauseam. We have completed yet another "wiggle up" and now, the profiles suggest yet another "wiggle down".

This process is entirely "normal" whether we are talking about the human herd abandoning bull market mentality in favor of "something else", on the way to embracing a bear market. OR, "teaching" the swarm of human-designed "robots", with their garbage-in/garbage-out designs, to "learn" how to sell. In either case, this up-down-up-down stalling process is performing as it should.

The primary focus remains the strong, "bullish" chart patterns for an assortment of short term YIELDS on US Treasury paper. There is chatter popping up about "flattening" of the yield curve. As long as that chatter remains, it should be impossible to "ignite" a resumption of bullish sentiment.

The old "animal spirits" that pushed such "notables" as TSLA, and now, a broken FB into frenzies, are gone. Momentum profiles for other former "leaders" such as GOOG and AAPL are pointed down. Even AMZN can't seem to make a new high and its momentum profile is shaky (but not a credible short).

Meanwhile real bombs are going off in all manner of stocks that have been in down trends, such as PM, IBM, and any number of bio tech frauds. The "invisible" bear trends in individual stocks are masked by relative "comfort" created by the major indices.

THIS is also classic, normal behavior. How long it lasts before the "visible" indices start to crack is guesswork at this point, but we are a lot closer than a few months ago. I think a couple more Fed rate hikes might do the trick. When Greenspan started to correct his misguided policy in 2004, it required numerous, timid quarter point hikes before cracks started to show in 2006-07. This time the "hangover" from Q/E nonsense complicates matters but the inevitable "backside" of the Q/E engineered ramp jobs will give us some new forms of "entertainment" as it unwinds to the downside.

I don't want to get any sort of political debate going but I think a major "drumbeat" of anti-Trump, anti-Republican nonsense will ramp up over the summer. All sorts of idiotic "polls" will show the Dems gaining up to 50 House seats, and gaining control of the Senate in much the same way as all the "Hillary Hype" showed her with a 97% chance of winning.

The orchestrated media push, with manipulated or outright fraudulent "polls", to convince voters that the Trump's days are over, could rattle the cages of "Trump Bulls" and add to the stock market's interest rate problems. It looks like that old, predictable "sell-in-May-and-walk-away" advice might be quite timely.

Q: Over the years, I've kept myself out of trouble in stocks by answering a simple question, "Are things getting better or worse."

When it comes to semis, we have moved from better to neutral. And on |AAPL, we've moved from neutral to worse. The LRCX news the other day showed us the weakness in memory which is the swing factor in semi equipment. The TSM news showed us that high end smartphones are now a declining market.

For all those service bulls out there on Apple, services are a second derivative to unit sales. We all remember the tales of Nokia and RIMM. It's all good until we see double digit unit declines.