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Why Apple (AAPL) Watch Will Be A Disaster

While Apple’s growth remains incredibly strong for the time being (iPhones, iPads, etc..), I have a few questions for Apple (AAPL) investors…..

  1. How long before investors realize that Apple Watch is a complete failure?
  2. Further, how much of a haircut will Apple stock get once investors realize that Apple’s innovative drive died with Steve Jobs?

Apple Watch….give me a break. Watch the video below. While intended as a promotional piece, it outlines every single reason as to why most people will not get it. Conversation starter….good at filtering……sure, and some guy from Nigeria just told me that my dead uncle left me $25 Million.

But you have got to give it to Apple’s PR machine. Apple Watch reviews don’t matter to early adopters and Apple says smartwatch demand to exceed supply at launch. Real world translation, outside of a few geeks, Apple diehards and hippies, very few people will get Apple Watch.

Finally, as soon as all of the above becomes evident, how much of a haircut will the Dow Jones (recently added Apple) get?

z33

Why Apple (AAPL) Watch Will Be A Disaster  Google

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Stockman and El-Erian: Delusional Or Smart?

z31As yours truly, David Stockman and Mohamed El-Erian continue to warn their followers that a big stock market decline and a severe recession are coming down the pipeline.

David Stockman: 

  • “The worldwide central bank money printing spree of the last two decades has generated massive excess capacity and mal-investment all around the planet.”
  • “What is coming, therefore, is not their father’s inflationary spiral, but an unprecedented and epochal global deflation.”
  • “So the central banks just keep printing, thereby inflating the asset bubbles worldwide. What ultimately stops today’s new style central bank credit cycle, therefore, is bursting financial bubbles. That has already happened twice this century. A third proof of the case looks to be just around the corner.”

Mohamed El-Erian: 

  • Financial markets have grown addicted to central bank easing, and that addiction could cause a heap of trouble when central banks tighten the credit spigot.
  • “It reminds me a little bit of 2007 and 2008,” when investors tried to discern when the turn would come away from easy credit conditions, El-Erian said. “I’m not so confident that I will see the turn coming, and turns tend to happen quite quickly.”

I couldn’t agree more. The only remaining question is…….are the US Equity markets currently going through a 9 month distribution or consolidation period? If distribution, the time to pay the piper may be soon at hand.

Z30

Stockman and El-Erian: Delusional Or Smart? Google

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Why The FED Will Be Powerless To Stop An Upcoming Bear Market

Daily Chart April 8 2015

4/8/2015- A positive day with the Dow Jones up 27 points (+0.15%) and the Nasdaq up 40 points (+0.83%). 

As far as I am concerned there is only one thing, and one thing only, that is holding this market together. The FED and investors blind faith in the fact that the FED will be able to stop any and all market corrections. Either through QE, interest rates or by simply making statements to the press. So much so that every single bottom over the last couple of months can be attributed to the FED talk.  El-Erian tends to agree. Danger, Danger — ‘Market Is in Love With Central Bank Trade’

Here are the 3 reasons as to why this “herd mentality trade” will blow up in investors faces.

  1. The Fed is a Reactionary Force: If we study the past, the FED has always been late to react to any and all market developments. For instance, Bernanke was talking about the accelerating US Economy as late as Q1 of 2008. They have no clue and there is no reason to believe that this time will be any different.
  2. The Market Will Decline Anyway: My mathematical and timing work makes it very clear. Over the short-term the market is independent of all fundamental inputs. That is to say, the market will top out on a certain date in 2015 and initiate its decline. No matter what the FED does or say. That day is approaching fast.
  3. Investors Will Lose Confidence In The FED: This is unavoidable. As soon as the FED is unable to backstop the next decline, most investors will lose confidence in a millisecond.  That in itself will accelerate the decline

The main take away from the points above is as follows. The FED trade will be in place until it is not.  The problems is, by the time most investors realize this fact, it will already be too late. By the time the analysis above becomes a reality, the stock market will already be down 10-25%.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years.  If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. April 8th, 2015  InvestWithAlex.com

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

Why The FED Will Be Powerless To Stop An Upcoming Bear Market Google

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Another Idiotic Advice From Jim Cramer

IBB2The chart of (IBB) is from March 20th. One can easily argue that Biotech is the most overpriced and highly speculative sector within the overall stock market structure today. That doesn’t bother Jim Cramer — If You’re Not in Biotech for the Long Haul, Hit the Road  I’ll give him one thing, Mr. Cramer has perfect timing for identifying the worst investments out there.

Here is what I said about Biotech on March 20th, the day it arguable topped out. Did Biotech (IBB) Top Out TODAY?

The Nasdaq hit an Intraday high of 5,132 on March 10th, 2000, then promptly turned around and proceeded to collapse 80%. Is it possible that the Biotech Index (IBB) did the same thing exactly 15 years later?

Not only is it possible, it is highly probable. Back in 2000 it was Pets.com and NortelNetworks. Today, it is hundreds of impressive sounding “Genome” Biotech names that have

  • A few Ph.D’s on their payroll.
  • An impressive idea.
  • A white paper on how their new generation drug will change the world and make Trillions….a  paper that maybe 10 people on this Earth can fully understand.
  • No way in hell of making a cent or getting their drug to the market.
  • A whole bunch of stupid investors that believe they will get rich.

Make no mistake, Biotech is an a giant bubble that will pop. And it’s not only Biotech. We are witnessing the same thing in the Silicon Valley’s “Mark Cuban” illiquidity bubble and even on the Nasdaq. Alibaba deal values Snapchat at $15 billion Do I really need to say anything when an app with no revenue is valued at $15 Billion by a company that is in its own spectacular overvaluation bubble? I hope note.

Anyway, why do I believe we might have hit the top in Biotech (IBB) today? Today’s blow off (gap) open and some of my other work within the sector.  That is to say, don’t be surprised if we get a massive sell-off in Biotech over the next few months.

Z31

Another Idiotic Advice From Jim Cramer  Google

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The Secret Behind This Hedge Fund Manager’s Market Collapse Prediction

crispin odey

I firmly believe that the only people investors should be listening to right about now are the people who got 2000 and 2007 meltdowns right. Everyone else is just blowing smoke. Crispin Odey, the founder of London-based Odey Asset Management, is one of those people. He does not hold back….

“I just think that you and I have got grandstand seats here [to an imminent market shock] and my point is having found myself in the second quarter of last year selling a lot of equities and starting to go short, I found out just how illiquid it all was. You never actually see it until people try and get out of these things.”

That’s quite a powerful statement and I wholeheartedly agree.  A lot of gold in this The Sydney Morning Herald article and it is definitely worth 5 minutes of your time.  He goes on to say…

“For me, what I find very interesting is given the risk of recession, how is it the West stock market can be hitting all-time highs? History tends to be not very generous in this regard. If you get a recession in a low inflation environment it tends to impact the ratings of stocks dramatically. It was akin to “watching the markets take drunken bow after drunken bow. It’s amazing that nobody else is on the same page.”

The upcoming recession and the approaching stock market meltdown are so easy to see, I am not sure why the 99% go on missing it. The attitude was exactly the same at 2000 and 2007 tops. Greed or stupidity? I am not sure, but it is amazing indeed.

Z30

The Secret Behind This Hedge Fund Manager’s Market Collapse Prediction  Google

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Will Lower Earnings Plunge The Market?

Daily Chart April 7 2015

4/7/2015 – A down day with the Dow Jones down 8 points (-0.04%) and the Nasdaq down 7 points (-0.14%).

The stock market continues to behave, more or less, as forecasted. If you would like to find out what happens next, please Click Here. 

How can I tell that we are in the stock market bubble?

This is rather simple. Just take a look at today’s P/E ratio (see the chart below). The chart displays Shiller Adjusted P/E Ratio of 27.12 (Current S&P 500 PE Ratio: 20.39). As you can see for yourself, we are once again pushing the limit. This ratio becomes even worse when we realize that most of the earnings over the last few years have been driven by QE, Zero Interest Rates and stock buybacks. Not fundamentals. Just as a reference points, bear markets end with a P/E of 5-10 (after earnings have collapsed).

In the meantime, the US Economy is rolling over the earnings are expected to decline……BANK OF AMERICA: We’re heading for an earnings recession

“In the last two periods of dollar strength (1978-85, 1995-02), which each included at least one recession, PE multiples expanded by 39% and 52% (3 and 8 multiple points), respectively,” BAML notes. “Similarly, in this cycle the S&P 500 PE multiples have continued to rise amid the years of significant dollar strength.”

I have to laugh at this. Bank Of America expects P/E expansion to continue while earnings collapse, the US economy rolls over and the FED possibly hikes rates?????

This insanity only makes sense in a financial bubble and that is precisely where we are today. In other words, the stock market is perfectly setup for a big decline here. The question is, are you ready for it?

PE Ratio

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years.  If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. April 7th, 2015  InvestWithAlex.com

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

Will Lower Earnings Plunge The Market? Google

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When The Russians Are More Rational Than The FED Clowns…….

bailout investwithalex

….it is time to worry. Make no mistake. Russia was on the receiving end of an all out economic attack last year. A deliberate act against Russia that will eventually come back to haunt the US/EU. Collapsing oil prices, western sanctions, currency and stock market declines. With that in mind, what are we supposed to think or do when Russians end up being a hell of a lot more fiscally responsible than the Americans?

Russia rules out joining the QE gang

I know what you are thinking. Russian economy is “complete crap” and the US economic/stock market recovery has been an outright miracle. At least the Western Media proclaims that to be the case. Perhaps.

At the same time, taking such a view is like driving 200 MPH while looking in a rear view mirror. Here is what we know. While the US Economic data is collapsing and the US stock market indices have been in distribution for over 9 months, the Russian Rubble and the Russian Stock Market (RSX) are surging. In fact, they have been some of the best performing financial instruments in the world thus far this year. As was theorized on this blog at the beginning of the year – due to their incredible undervaluation at that time.

Just FYI. 

z32

When Russians Are More Rational Than The FED Clowns…….Google