There Isn’t A Sucker Born Every Minute

At least when it comes luxury electronics it appears that there isn’t a sucker born every minute, or perhaps we’re running out of them quicker than they are being produced. I’m sure my now you’ve all heard about the flash crash in the USD overnight which was triggered by a massive surge in the Yen.

A lot of that move has been reversed since but what exacerbates the situation is a revenue warning issued by AAPL alleging fading global demand for its handheld products and in particular throughout China. Gee, I really wonder why…

Could it have to do with the fact that there simply aren’t that many people on the planet willing, or capable, of plunking down well over $1,200 for an iPhone X when they can get a comparable one from Huawei for half that price?

Or could it perhaps be that Apple basically stopped innovating just about the time when Steve Jobs kicked off this mortal coil in late 2011 after which Tim Cook and his senior executives thought it would be a grand idea to to jack up their mobile phone prices by 20% every single year?

“Consumers are prepared to pay a premium for a mobile phone because it is arguably the most important product in their lives,” said Ben Wood, the chief research analyst at CCS Insight.

Found that little tidbit in an article posted just yesterday over at c|net titled ‘Why your iPhone and Android will cost more in 2019‘. Well that one didn’t age very well, did it now? 😉

Well, I’m no economist and neither do I play one on TV, but the chart above strongly suggests that some sort of bubble may indeed be in the process of bursting. And it’s not just in the luxury electronics market to be honest. When I left the U.S. in 2012 an expensive sneaker cost ~$75 and double hamburger ~$5.

Now people are happily paying for $200 ‘designer’ sneakers and stand in line to pay $15 for a patty of GM meat substitute, some lettuce and mayo, all wrapped in a bun of flabby wonderbread. It was great (for retailers) while it lasted but we’ve run out of easy cash and it ain’t coming back anytime soon.

I mentioned this the other day in the new year’s wishes I sent to all my readers: Stagnation is death. If you become complacent and stop innovating whilst asking more money for almost the same product or service, or attempting to hold them hostage in your own digital bubble, then don’t be surprised if your customers are starting to look for greener pastures.

And don’t get me started on Apple getting rid of standard USB and headphone ports. I’m still driving a top of the line 2012 MBP which has all of those including HDMI and a (drumrolls) SDXC card slot! And to be honest I’d rather pay $1000 getting it repaired than buying any of those naked new models.

In case you’re wondering: AAPL may be a BTFD opportunity here but I will need to see the tape after the opening bell first.

Here’s the USD/JPY on a 5-min panel with my brand spanking SQN indicator. Note how the buy back was as violent as the original sell off. Thus far it looks like the Dollar will continue to gain some of the lost territory back.

Same formation in the AUD/USD as well, which many consider a gauge of global risk appetite. Same momo pattern here by the way.

Not much of a response however on the E-Mini so don’t get caught up in all the doomsday predictions just yet. Now don’t get me wrong. We are in a pretty rough spot here and a six sigma move is omnipresent in the minds of most participants.

More below the fold for my intrepid subs:

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