• Thanks for reading my diary and enjoy the evening.

I am outta here early like Nicki Minaj was last night on "American Idol."

Thanks for reading my diary and enjoy the evening.

Tomorrow I will move my discussion away from Apple (AAPL) -- in fact, I promise not even to mention the company!

• Apple's decline, by the numbers.

At the stock's peak of $705, Apple (AAPL) had a market cap of $668 billion. Its enterprise value was $547 billion (less $121 billion cash/liquidity).

At $450, the stock's market cap is $426 billion. Its enterprise value is $289 billion (less $137 billion in cash/liquidity).

The stock has declined -36%. The enterprise value has declined -47%. (Hat tip Sir David.)

• I am reducing the recommended exposure of the long-only portfolio from 40% to 30%. 

I am reducing the recommended exposure of the long-only Kass model portfolio from 40% to 30% now.

• As promised, my appearance on 'Futures Now.'

Here is the video of my appearance on CNBC's "Futures Now" today.

Oldie but goodie.

This is an old video on Apple's (AAPL) innovation, but it bears watching.

This video helps to explain everything about Apple -- its rise and fall.

Does anyone still associate buying Apple with this advertisement?

• Specifically, the February $65s.

I am selling more ProShares UltraShort 20+ Year Treasury (TBT) February $65 puts now.

• I am 40% net short now.

• I sold out of CSX and Avon.

Having met my price targets, I am no longer in CSX Corporation (CSX) and Avon Products (AVP), as I continue to whittle away my longs.

• Apple's shares will likely range between $425 and $500 for as long as the eye can see.

I just appeared on CNBC's "Futures Now."

There is a tendency in the business media to be hyperbolic in forecast.

I was honest and said that Apple's (AAPL) shares will likely range between $425 and $500 for as long as the eye can see, though the next 20 to 30 points is a coin flip.

But, a more aggressive capital allocation program (a higher dividend and more meaningful share buyback) could certainly stabilize the shares.

I will post the video when available.

• Heads up: I will be talking Apple on CNBC's 'Futures Now' at 1:00 p.m. EST.

• I am adding to my short book.

Goldman Sachs (GS) down, market up.

I am adding to my short book now.

• The U.S. stock market's giddiness has ignored some not-so-great manufacturing data.

I have mentioned recently that the regional PMIs (New York, Philadelphia and Richmond) indicated a slowing in manufacturing activity in recent weeks.

Today the January Kansas City data were also negative ("fiscal policy uncertainty" cited), representing the fourth straight month below zero.

New orders fell for a fifth straight month and the six-month outlook was unchanged.

Coming up next week are the Dallas and Chicago regional PMIs.

The U.S. stock market's giddiness has ignored some of this not-so-great manufacturing data -- it sees inflows dominating direction for now and is emphasizing the better jobs data.

• Here's a whiff

As of 11:25 a.m. EST:

• S&P 500 -- 420 advancers to 74 decliners.
• NYSE -- 1,362 advancers to 466 decliners.
• Nasdaq -- 1,341 advancers to 728 decliners.
• Russell 2000 -- 1,315 advancers to 547 decliners.

Volume on the S&P 500 is 12% higher than the past 10-day average, 20% higher than the past 30-day average, and 6% higher than this time on Wednesday.

• With effective tax rates going higher in 2013, numerous additional headwinds are facing the consumer in the months ahead.

I want to repeat for emphasis a point I made on Apple (AAPL) several weeks ago.

The reach of Apple and its products are broad.

The emerging weakness in Apple's business may be a sign that the consumer is increasingly showing signs of being spent-up, not pent-up.

With effective tax rates going higher in 2013 (payroll tax increase, etc.), there are numerous additional headwinds facing the consumer in the months ahead.

Tiffany (TIF), Coach (COH) and now Apple -- let's connect the dots!

• It's Netflix.

Netflix (NFLX) is the new Apple (AAPL).

• I have added to my bond short today.

• What should investors learn from Apple's abrupt fall from grace over the past four months?

Since late September 2012, when I initially wrote "The Bear Case for Apple," Apple's (AAPL) shares have fallen in price from $700 a share to $470 a share.

What should investors learn from Apple's abrupt fall from grace over the past four months?

To me, Apple's fall speaks volumes regarding the risks of lemming-like behavior on Wall Street (especially at inflection points of popularity) as well as having more Apple-specific ramifications regarding the company's future profit growth rate.

The Lesson of the Markets

It is a given that the crowd usually outsmarts the remnants -- that the contrarian (regardless of the intensity and integrity of analysis) faces an uphill battle because inflection points in markets, economic cycles and of opinion are more infrequent than frequent, more atypical than typical. The contrarian's arguments are typically pushed back (and even ridiculed) by consensus players and the media, most of whom have a vested interest in up not down.

The most important takeaway is that unanimity of opinion often illuminates a dangerous path. When something seems too good to be true, it usually is. And, as I wrote yesterday, in "Everybody's Gettin' Fat 'Cept Papa Kass," this observation might very well apply to the current almost universal bullishness on the part of most investors in which the line of demarcation between progress and fantasy is blurred.

The Lesson of Apple

As to Apple, it remains my contention (as has been the case since late September) that the company's secular earnings growth rate continues to be overstated by Wall Street analysts and investors and that a confluence of factors led to a peak in optimistic sentiment regarding Apple's share price four months ago. That optimism led to an unprecedented flow of funds into Apple's shares, the establishment of unrealistic company share price targets and unattainable profit projections.

As recently as Tuesday, on CNBC's "Futures Now," I surmised that Apple's consensus earnings estimates would move from the high $40s to closer to $40 a share for fiscal 2013. Nothing in yesterday's first-quarter earnings report moves me off of that forecast.

How Now, Apple?

The market is a ticker

A slender piece of tape

Which notifies the public

Of its economic shape

Which if it wasn't legal

It would be statutory rape

Let's perpetrate it daily

From 10 to half past 3

A simple little business

It's A-B-C

A is for analysts

These are highly skilled professionals who spend their entire lives studying the market

-- Elmer Bernstein, Carolyn Leigh and Max Schulman, "A-B-C," How Now, Dow Jones

Apple faces its own new normal -- a changing and more difficult business landscape with escalating competition that will challenge profitability over the next few years. The company faces competition in both its mature and emerging markets. Revenue will be moving toward single-digit growth rates and, when coupled with limited upside to margins, will limit future EPS growth.

Rather than having a tight group of bold estimates for profits and sales, I expect Wall Street estimates for Apple to diverge. Below is a good illustration of this; check out the difference in Apple revenue forecasts (2013-2014) between Morgan Stanley's analyst (low and realistic) and Piper Jaffray's analyst (high and unrealistic).

I expect that the hockey stick earnings progression seen over the past three to five years (from $9 a share to over $40 a share) is a thing of the past.

Price targets and earnings estimates for the company remain far too optimistic, and expectations will begin to be reduced in the period ahead.

Reflecting slowing growth coupled with still strong free cash flow generation, Apple's investor base will continue to change from growth investors to a more value-based constituency. As such, an obvious maturing in its business cycle will produce a diminished valuation and continued share price volatility as the investor base evolves and changes.

Though investor sentiment has turned abruptly negative over the near term (and has begun to discount my concerns), there remains few positive short-term catalysts for Apple in the months ahead.

As I surmised in my "15 Surprises for 2013," Apple's shares will likely continue to be under pressure in the first half of this year.

Bottom line: Apple's stock remains a trading sardine not an investing or eating sardine. As such, there will likely be numerous trading opportunities, but it is still too early to be a long-term investor in the shares -- there are simply too many headwinds.

• While sentiment is never a good timing tool, it is a measure of growing unanimity of maket view.

Optimism reigns supreme.

After yesterday's very bullish Investors Intelligence data, today's AAII survey shows bulls increasing to 52.3 from 43.9 -- the most bullish in two years.

Bears fell to 24.3 from 27.4.

Another measure of optimism is that the ISI Hedge Fund Survey net exposure has increased from 49.1 to 51.0 -- that is the highest reading since June 2011.

While sentiment is never a good timing tool, it is a measure of growing unanimity of maket view (something I address in today's opener).  

Caveat emptor.