Fleckenstein – Silver May Be About To Scream Higher As People Lose Confidence In Idiot Central Bankers

With many people wondering what’s next for the markets, today Bill Fleckenstein warned silver may be about to scream higher as people lose confidence in idiot central bankers.
March 17, 2016

– Despite the Fed’s dovishness, overnight markets were mostly lower, though that did not seem to matter too much to the SPOOs or trading here, as the indices were not very far from unchanged through midday, with the Dow and the S&P slightly higher and the Nasdaq a touch lower. In the afternoon they all marched higher still. By day’s end the Dow/S&P gained about 0.75% (with the Nasdaq just up fractionally despite decent strength in lots of speculative names, especially chips)…

Bill Fleckenstein continues:

A Sour Note On the Apple Farm

However, there was one bit of stock-specific news, namely a massive lowering of guidance by Jabil Circuit, which counts Apple as one of its biggest customers, whose stock price fell more than 10%. Since Jabil claims it is not losing market share, this suggests that all is not well in the Apple food chain, which is a theme that I discussed last quarter.

I have not talked about it much recently because there has been no point in focusing on shorting stocks or buying puts. But on the back of that catalyst I added to my put positions in Cirrus Logic, NXP Semiconductor, Broadcom (Avago), and Skyworks. While these are mostly just small, token positions at this point, I am going to look for a juncture to get aggressively short these stocks as well, but I’d like to see a break in the current market fever, as well as some signs that a bit of sanity is returning. It will. The question is when, and with puts and shorts, timing is everything. (Today the opposite occurred, as Apple supplier bulls claimed Jabil was backward-looking and all would be well, especially for the iPhone 7.)

Away from stocks, green paper was really hammered today as the Fed fantasy of a self-reinforcing recovery that is able to withstand rate increases is slowly evaporating, and with it — one would hope — the extraordinary confidence people have had in idiot central bankers. Turning to oil, it rallied 4%, while fixed income was higher.

King World News – Fleckenstein – Silver May Be About To Scream Higher As People Lose Confidence In Idiot Central BankersSilver Looking to Take Gold
As for the metals, silver led the way with a gain of 2% compared to a 0.5% loss for gold. As I have been noting, one of these days silver is going to scream higher for no particular reason, and it feels like we might be on the verge of that now. The miners in general had a very strong day, as everyone who was waiting for a pullback is being forced to deal with the fact that it has already come and gone.

King World News – Bill Fleckenstein – The Longer A Mania Goes, The Worse Off Everyone Will Be When It Ends – The Aftermath Of This Is Going To Be Extremely Brutal, Plus A Bonus Q&A

Included below is one question and answers from the Q&A’s with Bill Fleckenstein.

Bonus Q&A

Question: Fleck, I think the most important thing you’ve said recently is telling people “to quit fighting the last war”. That really struck a chord with me. Seeing so many people question this move and doubting is very interesting dance in human psychology. When the fundamental outlook aligns with the technical…why would one now doubt…at such a key point…

Answer from Fleck: “It is just the nature of markets. They twist your head around.”

By Bill Fleckenstein President Of Fleckenstein Capital
March 17 (King World News)