Bobs scenario (förra inlägget) ser ut att infrias och vi närmar oss både 1850 i S&P500 och 10 i VIX (13,8, ned från 16,8 kl 20 igår).
Jag tror att det här är slutrycket på den stora kroppsfinten som marknaden sysslar med (dvs innan den stora nedgången tar vid). Minns hur det slutade i Japan för ett decennium sedan, både med QE och tapering...
Nu faller allt på plats samtidigt; Hussmans Sornettebubbla som peakar i december eller januari, Bobs sista bullpeak innan det vänder ned någon gång Q4'13-Q1'14, slutet på 5-6 års haussemarknad som det brukar vara innan det vänder ned, total complacency (dvs alla är bull, ingen bear och nu blåser man faran över när reaktionen blev positiv på tapering. Om man ropar "vargen kommer" blir man utskrattad. Jag blir det.), ny ordförande för Fed snart på plats (minns när Greenspan tillträdde och när Bernanke tillträdde. Dags igen!)
Jag är mer bearish än någonsin och känner mig nöjd med nyligen ökat guldinnehav och enbart korta positioner i marknaden.
Håll i er, för 2014 gäller det. Antingen har jag lika fel som 2012 eller lika rätt som 2008. Fast är man rationell ska man nog bara vara neutral, inte gå kort som jag gör, men heller (absolut) inte gå lång som de flesta gör.
Visar inlägg med etikett Bob Janjuah. Visa alla inlägg
Visar inlägg med etikett Bob Janjuah. Visa alla inlägg
torsdag 19 december 2013
tisdag 5 november 2013
Sammanfattning av dagens Bob's World
1. Short term dip in November. Buy that dip
if it occurs. S&P could go as low as 1600.
2. Topping out process Q4’13-Q1’14. Go
seriously short when VIX hits 10 and thus signals complacency. Maybe an extreme
high in S&P will be 1850
3. Stock market drops 25-50% over the
course of 2014-2015, while the economy rebalances toward the 90% at the expense
of the top 10%
fredag 14 juni 2013
Bob köper på dips resten av året, men SEN kommer RASET
Det viktigaste ur Bob Janjuahs senaste marknadsbrev:
6 – So for me, ‘tapering’ is going to happen. It will be gentle, it will be well telegraphed, and the key will be to avoid a major shock to the real economy. But the Fed is NOT going to taper because the economy is too strong or because we have sustained core (wage) inflation, or because we have full employment - none of these conditions will be seen for some years to come. Rather, I feel that the Fed is going to taper because it is getting very fearful that it is creating a number of significant and dangerous leverage driven speculative bubbles that could threaten the financial stability of the US. [och därmed hotar även förtroendet för Fed självt och i längden Feds självständighet]
10 - Crucially I suspect that the Fed will be so conflicted/whip-sawed by, and suitably vague in its response to data that it ends up watering down its tapering message a little too often and a little too much, thus encouraging one or two more rounds of ‘buying the dip’.
As of today, my best guess is at least one major dip around Q2/Q3 (we may be in the middle of it now) as we seek more clarity around all of these drivers. My initial line in the sand for this dip is around S&P at 1530 and my major line is at S&P at 1450. A weekly close below 1450 S&P, in particular, would be extremely bearish. But I expect at least one more major buying of the dip come (late) Q3/Q4.I would not be surprised if we saw the S&P not just back up in the high 1600s, but perhaps even a 100 points higher (close to 1800!) before the next major bear market begins.
We are (I think) in a new volatility paradigm now. Cash will increasingly become King over the next year, even if I do still expect another round or two of dips that get bought during this period.
*************************
Bob's World: Repricing the world - Teppered out?
A – At best I give myself 5 out of 10 in terms of the accuracy of my main tactical call detailed in the above note. The S&P rallied to 1597 in early April, and then sold off 63 points (4%) to 1534 in Q2 before recovering. I was looking for a 5% to 10% sell-off from 1575 to around 1450/1475.
B – I score myself more highly for the 2nd key call I made back in March, which was that once we cleared a consecutive weekly close above 1575 in the S&P, we’d see new nominal all-time highs with the S&P trading in the high 1600s. I had thought we’d get there in Q3, but as it happens we have seen a (to date) Q2 high print of 1687 (22nd May). So maybe that deserves 7 out of 10? My sense that positioning and sentiment was set-up to get to extremes and chase/buy any dip seems to have played out pretty well.
C – The 3rd and last main call I made was that – based on (poor) fundamentals, (in my view) dangerously loose global central bank policy settings, increasing complacency towards risk and blind faith in central bank ‘puts’ amongst investors, and the sense that positioning and sentiment can and needs to be at (even more) absolute extremes as a pre-condition to any major market move – it would not be until late 2013 or early 2014 before we see the onset of the next major (-25% to -50%) bear market. Time will reveal all on this call, but for now I continue to hold this view.
D – To clarify further, I feel that the current dip that began with the S&P at 1687 in late-May, sparked by moves in rates and rates volatility in Japan and by the Fed ‘taper’ talk, is not the big one. Risk became way overbought from late 2012 and through the first 5 months of 2013, so a 5% to 10% correction (see A above) in, for example, the S&P (from 1687) should and will, I think, be considered normal and healthy – and will be a dip that is also bought (into C above)
Of course things change all the time and I would have to be an (even bigger than usual) idiot to ignore all the Fed ‘taper’ and Japan talk. Here is what I think matters:
1 – There can be no doubt in my view that the global growth, earnings, incomes and fundamental story remains very subdued. But at the same time financial markets, hooked on central bank ‘heroin’, have created an enormous and – in the long run – untenable gap between themselves and the real economy’s fundamentals. This gap is getting to dangerous levels, with positioning, sentiment, speculation, margin and leverage running at levels unseen since 2006/2007.
2 – The Fed knows all this. The Fed also knows that it was held at least partially responsible for creating and blowing up the bubble that burst spectacularly upon us all in 2007/2008. But very importantly, the Fed now has explicit and pretty much full responsibility for regulation of the banking and financial sector.
3 – As such, and as discussed by Jeremy Stein in February (remember, Mr. Stein is a Member of the Board of Governors of the Fed), the Fed now de facto has a new duel mandate based on (the trade-off between) what I’d call Nominal GDP (or macro-economic stability), and Financial Sector Stability (or what I’d simply label as system-wide ‘leverage’ levels).
4 – This means first and foremost that while growth, inflation and unemployment all matter a great deal, the Fed cannot now either allow, or be perceived to allow, the creation of any kind of excessive leverage driven speculative (asset) bubbles which, if they collapse, go on to threaten the financial stability of the US. Imagine if this Fed were to allow a major asset bubble to blow up and then burst anytime soon (say within the next two or three years). This time round Congress and the people of the US would be able to place the entire blame on the Fed – probably with some justification – and, if the fallout approached anything like that seen in 2008, then it would mean, in my view, the end of the Fed as we currently know it.
5 – Turkey’s do not vote for Christmas, nor is Chairman Bernanke or any other member of the Fed willing, in my view, to take such a risk. Back in Greenspan’s day he could always blame asset bubbles on someone else – even though leverage either in and/or facilitated by the banking/finance sector is always at the heart of every asset bubble. But this get-out has now explicitly been removed from the list of options open to the Fed going forward.
6 – So for me, ‘tapering’ is going to happen. It will be gentle, it will be well telegraphed, and the key will be to avoid a major shock to the real economy. But the Fed is NOT going to taper because the economy is too strong or because we have sustained core (wage) inflation, or because we have full employment - none of these conditions will be seen for some years to come. Rather, I feel that the Fed is going to taper because it is getting very fearful that it is creating a number of significant and dangerous leverage driven speculative bubbles that could threaten the financial stability of the US. In central bank speak, the Fed has likely come to the point where it feels the costs now outweigh the benefits of more policy.
7 - As part of this, the lack of sustainable growth in the US (much above the weak trend growth of 1% to 2% pa in real GDP which has been the case for some years now) is very telling. And, while I can’t be 100% certain, at least some members of the Fed and other central bankers must be looking with concern at recent developments in Japan whereby the BoJ’s independence has, for all practical purposes, been consigned to history, and which has a two decade head start with respect to QE. At least some members of the Fed may be worrying about the future of the Fed and the US if they persist with treating emergency and highly experimental policy settings as the new normal.
8 – The Fed will hope that markets heed its message and that we gradually, through the normalization of yields (in the belly of the curve) and rates volatility (higher!), move aggressively over optimistic financial market asset valuations somewhat closer to what is justified by rational and sustainable real economic fundamental metrics. Rather than being based on some circular and self-serving ‘risk premium’ delusion, which is almost completely predicated on the bogus time-inconsistent assumption of a continuous and never to be removed Fed/central bank put on yields and rates volatility.
9 – The sad likelihood is that markets – which are suffering from an acute form of Stockholm Syndrome - will listen and react too little too late. This could give us the large 25% to 50% bear market I expect to see beginning in late 2013 or early 2014, rather than a more gradual correction. In part, this is because markets will not believe – until it is too late – that the Fed is actually taking away its goodies. Further, it’s because positioning and sentiment among investors just always seems to go to extremes, way beyond most rational expectations, before they correct in spectacular style. Think Chuck Prince and his dancing shoes.
10 - Crucially I suspect that the Fed will be so conflicted/whip-sawed by, and suitably vague in its response to data that it ends up watering down its tapering message a little too often and a little too much, thus encouraging one or two more rounds of ‘buying the dip’. This would reflect the new dual FED mandate and because we are living through an enormous and never seen before global policy ‘experiment’. Furthermore, we are probably going to see Bernanke be replaced come January 2014. I don’t actually think it matters who will replace him – anyone different is a risk and a new uncertainty for the market. In the unlikely event that Bernanke signs up for another term, I don't think that the coming shifts and changes will be reversed, but I tend to feel that the transition phase would be a little less fraught with risk and volatility, as Chairman Bernanke has credibility and the confidence of the market.
11 – So, going back to C & D above, we can certainly see a dip or two between now and the final top/the final turn. But it may take until 2014 (Q1?) before we get the true onset of a major -25% to -50% bear market in stocks. We also need to be cognizant of the Abe/BoJ developments. Along with the Fed, ‘Japan’ is one of the two major global risk reward drivers. The ECB response to (core) deflation and the German elections, and weakening Chinese & EM growth and the indebtedness of China & EM, will also matter a great deal.
As of today, my best guess is at least one major dip around Q2/Q3 (we may be in the middle of it now) as we seek more clarity around all of these drivers. My initial line in the sand for this dip is around S&P at 1530 and my major line is at S&P at 1450. A weekly close below 1450 S&P, in particular, would be extremely bearish. But I expect at least one more major buying of the dip come (late) Q3/Q4.I would not be surprised if we saw the S&P not just back up in the high 1600s, but perhaps even a 100 points higher (close to 1800!) before the next major bear market begins. It depends on who says what, and on the levels of extreme speculation and leverage. In other words, did we collectively learn our lesson from the events leading up to and including the global 07/08 crash? My 25+ years in financial markets lead me to believe, sadly, that the answer is almost certainly NO.
What I do know is that the longer we wait and the longer we put our faith in a set of time-inconsistent policies the greater the fallout will be from the forced unwind of the resulting speculative leverage extreme. This would come once the cost and availability of capital (i.e., rates volatility) ‘normalizes’. It would follow current policies that seek to force a mis-allocation of capital by mis-pricing the cost and availability of capital. I am confident that view is a correct read of the current state of affairs . And I think the Fed is telling us that they know this too. Ignoring this seemingly transparent signal from the Fed – by, for example, believing that the Fed will not have the courage to taper, or that the BoJ and/or ECB can replace or even out do the Fed over the next year or so - could prove to be extremely dangerous for investors.
We are (I think) in a new volatility paradigm now. Cash will increasingly become King over the next year, even if I do still expect another round or two of dips that get bought during this period. Not getting too sucked in and/or too long illiquidity and/or overly invested in high-beta risks should all be avoided. Nimble tactical trading of risk should be the rule. An increasing focus on de-risking core balance sheet/portfolio should, over the next 12/18 months, hopefully set one up to take advantage of what I think will be another savage bear market in global risk assets over most of 2014.
If cash is too safe, then safety should be sought in the strongest balance sheets, whether one is investing in bonds, in credit, in currencies and/or in stocks. And, as a rule of thumb, (and excluding real house prices in the US) those things that have ‘gone up the most’ over the past few years are likely to be the things that ‘go down’ the most – so as well as equities, EM investors also need to be very careful.
6 – So for me, ‘tapering’ is going to happen. It will be gentle, it will be well telegraphed, and the key will be to avoid a major shock to the real economy. But the Fed is NOT going to taper because the economy is too strong or because we have sustained core (wage) inflation, or because we have full employment - none of these conditions will be seen for some years to come. Rather, I feel that the Fed is going to taper because it is getting very fearful that it is creating a number of significant and dangerous leverage driven speculative bubbles that could threaten the financial stability of the US. [och därmed hotar även förtroendet för Fed självt och i längden Feds självständighet]
10 - Crucially I suspect that the Fed will be so conflicted/whip-sawed by, and suitably vague in its response to data that it ends up watering down its tapering message a little too often and a little too much, thus encouraging one or two more rounds of ‘buying the dip’.
As of today, my best guess is at least one major dip around Q2/Q3 (we may be in the middle of it now) as we seek more clarity around all of these drivers. My initial line in the sand for this dip is around S&P at 1530 and my major line is at S&P at 1450. A weekly close below 1450 S&P, in particular, would be extremely bearish. But I expect at least one more major buying of the dip come (late) Q3/Q4.I would not be surprised if we saw the S&P not just back up in the high 1600s, but perhaps even a 100 points higher (close to 1800!) before the next major bear market begins.
We are (I think) in a new volatility paradigm now. Cash will increasingly become King over the next year, even if I do still expect another round or two of dips that get bought during this period.
*************************
Bob's World: Repricing the world - Teppered out?
A – At best I give myself 5 out of 10 in terms of the accuracy of my main tactical call detailed in the above note. The S&P rallied to 1597 in early April, and then sold off 63 points (4%) to 1534 in Q2 before recovering. I was looking for a 5% to 10% sell-off from 1575 to around 1450/1475.
B – I score myself more highly for the 2nd key call I made back in March, which was that once we cleared a consecutive weekly close above 1575 in the S&P, we’d see new nominal all-time highs with the S&P trading in the high 1600s. I had thought we’d get there in Q3, but as it happens we have seen a (to date) Q2 high print of 1687 (22nd May). So maybe that deserves 7 out of 10? My sense that positioning and sentiment was set-up to get to extremes and chase/buy any dip seems to have played out pretty well.
C – The 3rd and last main call I made was that – based on (poor) fundamentals, (in my view) dangerously loose global central bank policy settings, increasing complacency towards risk and blind faith in central bank ‘puts’ amongst investors, and the sense that positioning and sentiment can and needs to be at (even more) absolute extremes as a pre-condition to any major market move – it would not be until late 2013 or early 2014 before we see the onset of the next major (-25% to -50%) bear market. Time will reveal all on this call, but for now I continue to hold this view.
D – To clarify further, I feel that the current dip that began with the S&P at 1687 in late-May, sparked by moves in rates and rates volatility in Japan and by the Fed ‘taper’ talk, is not the big one. Risk became way overbought from late 2012 and through the first 5 months of 2013, so a 5% to 10% correction (see A above) in, for example, the S&P (from 1687) should and will, I think, be considered normal and healthy – and will be a dip that is also bought (into C above)
Of course things change all the time and I would have to be an (even bigger than usual) idiot to ignore all the Fed ‘taper’ and Japan talk. Here is what I think matters:
1 – There can be no doubt in my view that the global growth, earnings, incomes and fundamental story remains very subdued. But at the same time financial markets, hooked on central bank ‘heroin’, have created an enormous and – in the long run – untenable gap between themselves and the real economy’s fundamentals. This gap is getting to dangerous levels, with positioning, sentiment, speculation, margin and leverage running at levels unseen since 2006/2007.
2 – The Fed knows all this. The Fed also knows that it was held at least partially responsible for creating and blowing up the bubble that burst spectacularly upon us all in 2007/2008. But very importantly, the Fed now has explicit and pretty much full responsibility for regulation of the banking and financial sector.
3 – As such, and as discussed by Jeremy Stein in February (remember, Mr. Stein is a Member of the Board of Governors of the Fed), the Fed now de facto has a new duel mandate based on (the trade-off between) what I’d call Nominal GDP (or macro-economic stability), and Financial Sector Stability (or what I’d simply label as system-wide ‘leverage’ levels).
4 – This means first and foremost that while growth, inflation and unemployment all matter a great deal, the Fed cannot now either allow, or be perceived to allow, the creation of any kind of excessive leverage driven speculative (asset) bubbles which, if they collapse, go on to threaten the financial stability of the US. Imagine if this Fed were to allow a major asset bubble to blow up and then burst anytime soon (say within the next two or three years). This time round Congress and the people of the US would be able to place the entire blame on the Fed – probably with some justification – and, if the fallout approached anything like that seen in 2008, then it would mean, in my view, the end of the Fed as we currently know it.
5 – Turkey’s do not vote for Christmas, nor is Chairman Bernanke or any other member of the Fed willing, in my view, to take such a risk. Back in Greenspan’s day he could always blame asset bubbles on someone else – even though leverage either in and/or facilitated by the banking/finance sector is always at the heart of every asset bubble. But this get-out has now explicitly been removed from the list of options open to the Fed going forward.
6 – So for me, ‘tapering’ is going to happen. It will be gentle, it will be well telegraphed, and the key will be to avoid a major shock to the real economy. But the Fed is NOT going to taper because the economy is too strong or because we have sustained core (wage) inflation, or because we have full employment - none of these conditions will be seen for some years to come. Rather, I feel that the Fed is going to taper because it is getting very fearful that it is creating a number of significant and dangerous leverage driven speculative bubbles that could threaten the financial stability of the US. In central bank speak, the Fed has likely come to the point where it feels the costs now outweigh the benefits of more policy.
7 - As part of this, the lack of sustainable growth in the US (much above the weak trend growth of 1% to 2% pa in real GDP which has been the case for some years now) is very telling. And, while I can’t be 100% certain, at least some members of the Fed and other central bankers must be looking with concern at recent developments in Japan whereby the BoJ’s independence has, for all practical purposes, been consigned to history, and which has a two decade head start with respect to QE. At least some members of the Fed may be worrying about the future of the Fed and the US if they persist with treating emergency and highly experimental policy settings as the new normal.
8 – The Fed will hope that markets heed its message and that we gradually, through the normalization of yields (in the belly of the curve) and rates volatility (higher!), move aggressively over optimistic financial market asset valuations somewhat closer to what is justified by rational and sustainable real economic fundamental metrics. Rather than being based on some circular and self-serving ‘risk premium’ delusion, which is almost completely predicated on the bogus time-inconsistent assumption of a continuous and never to be removed Fed/central bank put on yields and rates volatility.
9 – The sad likelihood is that markets – which are suffering from an acute form of Stockholm Syndrome - will listen and react too little too late. This could give us the large 25% to 50% bear market I expect to see beginning in late 2013 or early 2014, rather than a more gradual correction. In part, this is because markets will not believe – until it is too late – that the Fed is actually taking away its goodies. Further, it’s because positioning and sentiment among investors just always seems to go to extremes, way beyond most rational expectations, before they correct in spectacular style. Think Chuck Prince and his dancing shoes.
10 - Crucially I suspect that the Fed will be so conflicted/whip-sawed by, and suitably vague in its response to data that it ends up watering down its tapering message a little too often and a little too much, thus encouraging one or two more rounds of ‘buying the dip’. This would reflect the new dual FED mandate and because we are living through an enormous and never seen before global policy ‘experiment’. Furthermore, we are probably going to see Bernanke be replaced come January 2014. I don’t actually think it matters who will replace him – anyone different is a risk and a new uncertainty for the market. In the unlikely event that Bernanke signs up for another term, I don't think that the coming shifts and changes will be reversed, but I tend to feel that the transition phase would be a little less fraught with risk and volatility, as Chairman Bernanke has credibility and the confidence of the market.
11 – So, going back to C & D above, we can certainly see a dip or two between now and the final top/the final turn. But it may take until 2014 (Q1?) before we get the true onset of a major -25% to -50% bear market in stocks. We also need to be cognizant of the Abe/BoJ developments. Along with the Fed, ‘Japan’ is one of the two major global risk reward drivers. The ECB response to (core) deflation and the German elections, and weakening Chinese & EM growth and the indebtedness of China & EM, will also matter a great deal.
As of today, my best guess is at least one major dip around Q2/Q3 (we may be in the middle of it now) as we seek more clarity around all of these drivers. My initial line in the sand for this dip is around S&P at 1530 and my major line is at S&P at 1450. A weekly close below 1450 S&P, in particular, would be extremely bearish. But I expect at least one more major buying of the dip come (late) Q3/Q4.I would not be surprised if we saw the S&P not just back up in the high 1600s, but perhaps even a 100 points higher (close to 1800!) before the next major bear market begins. It depends on who says what, and on the levels of extreme speculation and leverage. In other words, did we collectively learn our lesson from the events leading up to and including the global 07/08 crash? My 25+ years in financial markets lead me to believe, sadly, that the answer is almost certainly NO.
What I do know is that the longer we wait and the longer we put our faith in a set of time-inconsistent policies the greater the fallout will be from the forced unwind of the resulting speculative leverage extreme. This would come once the cost and availability of capital (i.e., rates volatility) ‘normalizes’. It would follow current policies that seek to force a mis-allocation of capital by mis-pricing the cost and availability of capital. I am confident that view is a correct read of the current state of affairs . And I think the Fed is telling us that they know this too. Ignoring this seemingly transparent signal from the Fed – by, for example, believing that the Fed will not have the courage to taper, or that the BoJ and/or ECB can replace or even out do the Fed over the next year or so - could prove to be extremely dangerous for investors.
We are (I think) in a new volatility paradigm now. Cash will increasingly become King over the next year, even if I do still expect another round or two of dips that get bought during this period. Not getting too sucked in and/or too long illiquidity and/or overly invested in high-beta risks should all be avoided. Nimble tactical trading of risk should be the rule. An increasing focus on de-risking core balance sheet/portfolio should, over the next 12/18 months, hopefully set one up to take advantage of what I think will be another savage bear market in global risk assets over most of 2014.
If cash is too safe, then safety should be sought in the strongest balance sheets, whether one is investing in bonds, in credit, in currencies and/or in stocks. And, as a rule of thumb, (and excluding real house prices in the US) those things that have ‘gone up the most’ over the past few years are likely to be the things that ‘go down’ the most – so as well as equities, EM investors also need to be very careful.
tisdag 26 mars 2013
Bob Janjuah är lite bearish på kort sikt, sedan bull, sedan jättebear
Bobs scenario: Ned 5-10% nu, sedan upp rejält till nya highs under Q3 och därefter börjar det riktiga raset i slutet av 2013 och under 2014.
1 - The 5% February sell-off I was looking for materialised in part. The expected dip in the S&P from 1515 to 1440ish ended up instead being a 3% dip from 1530 to 1485. Markets have, as I expected, subsequently bounced – the dip was ‘bought’ – taking the S&P well above my minimum 1515 target.
2 – As per my February note I think we are now beginning or very soon about to begin the next (slightly bigger) dip lower, of 5% to 10% over Q2, taking the S&P from the 1575/1550s down to the 1450/1475 zone that I have discussed at length in my last few notes. The shambolic policy responses to Cyprus, the weakness of the ‘post-Cyprus’ bounce, and the ‘cat’ that Dutch Finance Minister Dijsselbloem has ‘let out of the bag’ all add to my conviction, as does the poor global (esp. EM) growth data.
3 – Again, however, I remain convinced that, in terms of positioning and sentiment, we are ‘not there yet.’ Which means that I think this coming dip will also be bought and celebrated – another reason for positioning, sentiment and leverage to get to even more extremes. Also per my last note, I am fully expecting new all-time nominal highs in, for example, the S&P, into the 1600s, once it has its first weekly close above 1575. I think this should occur in Q3.
4 – Lastly, as per my last note, I remain as convinced as ever that the bullishness that will likely prevail at that time will come under extreme scrutiny and pressure over late 2013 and 2014. Global (esp. EM) growth will likely continue to disappoint, as we are faced with a possible (probable, in my view) transition from Ben Bernanke to someone else at the helm of the Fed, as the Japan story develops, and as the eurozone crisis continues to play out.
More on that in future notes. For now, on a tactical basis, I recommend getting short ‘risk’ at a (proxy) S&P level of 1550/1575, looking for a move down to 1450/1475, over late March and Q2. A consecutive weekly close above 1575 on the S&P is my stop loss.
1 - The 5% February sell-off I was looking for materialised in part. The expected dip in the S&P from 1515 to 1440ish ended up instead being a 3% dip from 1530 to 1485. Markets have, as I expected, subsequently bounced – the dip was ‘bought’ – taking the S&P well above my minimum 1515 target.
2 – As per my February note I think we are now beginning or very soon about to begin the next (slightly bigger) dip lower, of 5% to 10% over Q2, taking the S&P from the 1575/1550s down to the 1450/1475 zone that I have discussed at length in my last few notes. The shambolic policy responses to Cyprus, the weakness of the ‘post-Cyprus’ bounce, and the ‘cat’ that Dutch Finance Minister Dijsselbloem has ‘let out of the bag’ all add to my conviction, as does the poor global (esp. EM) growth data.
3 – Again, however, I remain convinced that, in terms of positioning and sentiment, we are ‘not there yet.’ Which means that I think this coming dip will also be bought and celebrated – another reason for positioning, sentiment and leverage to get to even more extremes. Also per my last note, I am fully expecting new all-time nominal highs in, for example, the S&P, into the 1600s, once it has its first weekly close above 1575. I think this should occur in Q3.
4 – Lastly, as per my last note, I remain as convinced as ever that the bullishness that will likely prevail at that time will come under extreme scrutiny and pressure over late 2013 and 2014. Global (esp. EM) growth will likely continue to disappoint, as we are faced with a possible (probable, in my view) transition from Ben Bernanke to someone else at the helm of the Fed, as the Japan story develops, and as the eurozone crisis continues to play out.
More on that in future notes. For now, on a tactical basis, I recommend getting short ‘risk’ at a (proxy) S&P level of 1550/1575, looking for a move down to 1450/1475, over late March and Q2. A consecutive weekly close above 1575 on the S&P is my stop loss.
tisdag 5 februari 2013
Janjuah lyssnar på tapen
Nomuras Bob Janjuah tror att centralbankernas experiment kommer sluta i tårar och en marknadsnedgång med 25-50%.
Tills vidare lyssnar han emellertid på tapen, dvs han flyter med marknaden uppåt eller sidledes tills dess att vi få en veckostängning under 1450 på S&P 500 (nu ca 1500). Han tror mer specifikt att det kommer 1-2 mindre korrektioner på 5-10% vardera under första halvåret, men att börsen efter dessa studsar till nya highs och kanske t.o.m. en ny all time high (över 1576) innan spiken uppåt förbyts i kollaps resten av 2013 och 2014.
Jag hör honom... och tapen. Privat ligger jag maxkort, eftersom jag inte behöver svara inför någon när jag förlorar pengar varje månad, men i fonden ligger jag mer neutral till t.o.m. marginellt nettolångoch gör alltså ungefär som Bob.
Tills vidare lyssnar han emellertid på tapen, dvs han flyter med marknaden uppåt eller sidledes tills dess att vi få en veckostängning under 1450 på S&P 500 (nu ca 1500). Han tror mer specifikt att det kommer 1-2 mindre korrektioner på 5-10% vardera under första halvåret, men att börsen efter dessa studsar till nya highs och kanske t.o.m. en ny all time high (över 1576) innan spiken uppåt förbyts i kollaps resten av 2013 och 2014.
Jag hör honom... och tapen. Privat ligger jag maxkort, eftersom jag inte behöver svara inför någon när jag förlorar pengar varje månad, men i fonden ligger jag mer neutral till t.o.m. marginellt nettolångoch gör alltså ungefär som Bob.
tisdag 13 november 2012
Janjuah siktar på 1300, 1500 och 800 i S&P 500
Den här meningen sammanfattar Bobs syn att en sista policyspike kan lyfta index rejält innan kraschen, fast först tror han att det faller till 1300 (nu 1370):
A combo of ECB QE and fiscal/debt ceiling fudges in the US – perhaps also complimented by a short-lived centrally planned but debt fuelled and ultimately wasteful China uptick – could even cause a parabolic spike powerful enough to take S&P – briefly – into the 1500s, before resuming the longer-term march over the rest of 2013 and 2014 to the 800s
[...] but, for now, we will continue to focus on 1300 as an initial major target
Annars är han tydlig med att penningtryckande endast skadar ekonomin:
the private sector continues to ignore Bernanke [...] by instead doing the exact opposite, which means holding onto/building cash and savings, delaying spending/investment/hiring and thus hurting growth.
A combo of ECB QE and fiscal/debt ceiling fudges in the US – perhaps also complimented by a short-lived centrally planned but debt fuelled and ultimately wasteful China uptick – could even cause a parabolic spike powerful enough to take S&P – briefly – into the 1500s, before resuming the longer-term march over the rest of 2013 and 2014 to the 800s
[...] but, for now, we will continue to focus on 1300 as an initial major target
Annars är han tydlig med att penningtryckande endast skadar ekonomin:
the private sector continues to ignore Bernanke [...] by instead doing the exact opposite, which means holding onto/building cash and savings, delaying spending/investment/hiring and thus hurting growth.
tisdag 23 oktober 2012
Bob Janjuah är tillbaka
För några veckor sedan stoppade BJ på Nomura ut sig då SPX stängde en fredag över 1450. Nu verkar han vara tillbaka och redo att ta risk på nedsidan igen. Från Zerohedge:
Dow Jones down 250, and a new bearish letter from Bob Janjuah? Lucky coincidence? Or conspiracy? You decide. From Bob: "How to play it? The SPX is the obvious pure risk short because of how rich it is against other equity markets. Outright is fine, so are options. Take a look at January 1350 puts for example currently trading at 20. If doing outright we would recommend a stop just above the recent highs at 1475. We also like the USD and Treasuries because the market has seen time and time again US problems do not lead to selling of (safe) US assets and it can and we think will be the same again."
Dow Jones down 250, and a new bearish letter from Bob Janjuah? Lucky coincidence? Or conspiracy? You decide. From Bob: "How to play it? The SPX is the obvious pure risk short because of how rich it is against other equity markets. Outright is fine, so are options. Take a look at January 1350 puts for example currently trading at 20. If doing outright we would recommend a stop just above the recent highs at 1475. We also like the USD and Treasuries because the market has seen time and time again US problems do not lead to selling of (safe) US assets and it can and we think will be the same again."
måndag 24 september 2012
BJ tog sin stop loss, ligger neutral tills vidare
S&P 500 stängde veckan på 1460,15, tio punkter över Bobs stop loss-nivå. Han stoppar därför ut sig och ligger neutral tills index stänger en vecka under 1450 igen. "Det kan ske på ett ögonblick. Det kan ske inom två veckor, men index kan också blåsas upp 10% till av QE under några månader."
Från Bob Janjuah, Nomura:
Readers need to be open to the idea that this bubble could extend for maybe a few months and by up to 10%, and to the idea that we could see global equity markets 10/15% lower in virtually a ‘heartbeat’. Also of course we could well see both outcomes, where we end up with the market in a (wide) trading range with numerous mini risk-on/risk-off phases that result in no overall directional move.
fredag 21 september 2012
Stor risk att Bob Janjuah tvingas ge upp
Han har sagt att om S&P stänger över 1450 idag kl 22 så stänger han sin säljrekommendation.
Just nu handlar index i 1465,6 så det behövs en snabb procent på nedsidan för att "rädda" honom kvar en stund till.
På annat håll i Nomura så minskar banken personalen med 30% (!)
På ytterligare annat håll är CNBCs bevakning av iPhone5-debuten nästan sinnessjuk. "Yeah! Right here, baby" skriker exalterade nyblivna innehavare av telefonen när de kommer ut ur Apples butik vid sydöstra hörnet av Central Park i New York.
Just nu handlar index i 1465,6 så det behövs en snabb procent på nedsidan för att "rädda" honom kvar en stund till.
På annat håll i Nomura så minskar banken personalen med 30% (!)
På ytterligare annat håll är CNBCs bevakning av iPhone5-debuten nästan sinnessjuk. "Yeah! Right here, baby" skriker exalterade nyblivna innehavare av telefonen när de kommer ut ur Apples butik vid sydöstra hörnet av Central Park i New York.
tisdag 18 september 2012
Stop loss Bob
Bob Janjuah är nära att ta sin stop loss trots att han faktiskt blivit mer övertygad om att S&P 500 kommer nå hans target på 800 (nu 1461).
Draghi och Bernanke har avslöjat sig som politiska. I Bens fall kan det leda till att republikanerna kör chicken race mot fiscal cliff och rätt över stupet.
Bob understryker att QE, LTRO och OMT varken har eller kommer bidra uthålligt positivt till tillväxt. Tvärtom visar de senaste 4 åren att utfallet kan bli uthålligt sämre tillväxt då konsumenter tvingas till mer sparande än annars.
Centralbankerna har spenderat i stort sett allt sitt förtroendekapital och om det inte funkar i vinter med nuvarande oändliga QE så är det absolut sista förtroendet också bortblåst. DET vore ett "major problem".
Demografin är negativ i Kina, Europa och USA. Åldrande befolkningar sparar mer och spenderar mindre och ger sig knappast hän åt lånefinansierad överkonsumtion.
Trots detta kommer Bob ta sin stop loss på fredag om S&P håller öer 1450. Han tror att det finns max 10% galet riskfylld uppsida då, men tvingas vara disciplinerad. I slutänden är han mer övertygad om sitt target på 800 (dvs -45%).
Kanske septemberlösen i derivat på fredag eller window dressing och flöden inför kvartalsskiftet kan ge nya highs innan det vänder. [min kommentar]
Draghi och Bernanke har avslöjat sig som politiska. I Bens fall kan det leda till att republikanerna kör chicken race mot fiscal cliff och rätt över stupet.
Bob understryker att QE, LTRO och OMT varken har eller kommer bidra uthålligt positivt till tillväxt. Tvärtom visar de senaste 4 åren att utfallet kan bli uthålligt sämre tillväxt då konsumenter tvingas till mer sparande än annars.
Centralbankerna har spenderat i stort sett allt sitt förtroendekapital och om det inte funkar i vinter med nuvarande oändliga QE så är det absolut sista förtroendet också bortblåst. DET vore ett "major problem".
Demografin är negativ i Kina, Europa och USA. Åldrande befolkningar sparar mer och spenderar mindre och ger sig knappast hän åt lånefinansierad överkonsumtion.
Trots detta kommer Bob ta sin stop loss på fredag om S&P håller öer 1450. Han tror att det finns max 10% galet riskfylld uppsida då, men tvingas vara disciplinerad. I slutänden är han mer övertygad om sitt target på 800 (dvs -45%).
Kanske septemberlösen i derivat på fredag eller window dressing och flöden inför kvartalsskiftet kan ge nya highs innan det vänder. [min kommentar]
tisdag 21 augusti 2012
Bob's world
Bob Janjuah på Nomura har idag uppdaterat sin marknadssyn från knappt en månad sedan. Han börjar med att kommentera hur rätt han haft (vilket är lite en försköning, men i stora drag ändå korrekt). Huvudbudskapet är att efter risk on som gällt i några månader nu så är det från och med idag dags för risk off. Han siktar på 20-25% nedgång i S&P [vilket betyder minst 30% ras i Eurostoxx 50, min kommentar] fram till årsskiftet då nya monetära stimulanser kan ge en ny uppgångsfas.
This is a very brief update of my most recent note published on July 25th. Referencing back to this July note the key takeaways were:
Firstly: ‘In terms of markets, the route map I set out in early April and which I affirmed in early June continues to play out extremely well. After correctly calling the late March/early April 1420 high in the S&P500, and also the early June (1270) low, we have also now fully captured the risk-on rally in stocks and credit that began in early June…’
Secondly: ‘Tactically, we have not yet hit my targets for the risk-on phase I called in early June – my S&P500 target was set at 1400/1450 by late July/early August, and my iTraxx Crossover target was set at 600bp. And as I also said in June, this risk-on phase was likely to be a struggle due to headline risk and volatility, market illiquidity, and the general lack of strong investor views/willingness to take big risks. Nevertheless, stock and credit markets have indeed climbed the wall of worry. Over the extreme short term, over the next two to four weeks, I would not be surprised to see my targets ultimately hit.’
And lastly: ‘However…I now think the correct thing to do – as I also said in April and June – is to prepare for a serious risk-off phase between August and November…over the August to November period I am looking for the S&P500 to trade off down from around 1400…by 20% to 25%...to trade at or below the lows of 2011... For iTraxx crossover, this equates to a spread wide for 2012 of – in my view – 800/1000bp (from 550/600bps)… investment grade cash corporate (non-financial) bonds remain a core (relative!) safe-haven. This coming major risk-off phase will, in my view, also be very USD bullish (my expectation of Fed USD1trn QE in December should eventually alter the bullish USD trend of course) and bullish core government bonds (USTs, Gilts, Bunds) – perhaps we could see 10yr Bunds at 50bp all-in yields, with USTs and Gilts at/close to 1%. By late 2012, based on my Fed December QE view, my tactical call will likely turn bullish/risk-on – let us see about that closer to the time.’
My July note thus held out the prospect of further Risk On over late July and August, where 1400/1450 has been my long-standing target ‘high’ for Q3 2012, but it also warned that in August we were likely to see the beginning of the next risk off phase, which would likely be the ‘biggest’ move of 2012. Whilst in the extreme short term – days – more risk on is possible, we now feel comfortable in flipping from risk on to risk off and positioning for this major risk off phase.
Just in case something genuinely new and unusual is happening – we note that the risk on phase has, time wise, extended for a few more days than we had originally forecast - and in the interests of prudence, my stop loss on the risk off call effective immediately is a consecutive weekly close on the S&P500 at or above 1450. As the Global Macro Strategy team is looking for Mr Bernanke to disappoint markets at Jackson Hole next week, and also because we are confident that markets will soon discover that neither the ECB nor Eurozone politicians will actually be able to deliver on their ‘promises’, we are hopeful that our stop losses will not be triggered. For now we are happy to risk 30 S&P points against us, in order to potentially pick up 300 S&P points in our favour.
This is a very brief update of my most recent note published on July 25th. Referencing back to this July note the key takeaways were:
Firstly: ‘In terms of markets, the route map I set out in early April and which I affirmed in early June continues to play out extremely well. After correctly calling the late March/early April 1420 high in the S&P500, and also the early June (1270) low, we have also now fully captured the risk-on rally in stocks and credit that began in early June…’
Secondly: ‘Tactically, we have not yet hit my targets for the risk-on phase I called in early June – my S&P500 target was set at 1400/1450 by late July/early August, and my iTraxx Crossover target was set at 600bp. And as I also said in June, this risk-on phase was likely to be a struggle due to headline risk and volatility, market illiquidity, and the general lack of strong investor views/willingness to take big risks. Nevertheless, stock and credit markets have indeed climbed the wall of worry. Over the extreme short term, over the next two to four weeks, I would not be surprised to see my targets ultimately hit.’
And lastly: ‘However…I now think the correct thing to do – as I also said in April and June – is to prepare for a serious risk-off phase between August and November…over the August to November period I am looking for the S&P500 to trade off down from around 1400…by 20% to 25%...to trade at or below the lows of 2011... For iTraxx crossover, this equates to a spread wide for 2012 of – in my view – 800/1000bp (from 550/600bps)… investment grade cash corporate (non-financial) bonds remain a core (relative!) safe-haven. This coming major risk-off phase will, in my view, also be very USD bullish (my expectation of Fed USD1trn QE in December should eventually alter the bullish USD trend of course) and bullish core government bonds (USTs, Gilts, Bunds) – perhaps we could see 10yr Bunds at 50bp all-in yields, with USTs and Gilts at/close to 1%. By late 2012, based on my Fed December QE view, my tactical call will likely turn bullish/risk-on – let us see about that closer to the time.’
My July note thus held out the prospect of further Risk On over late July and August, where 1400/1450 has been my long-standing target ‘high’ for Q3 2012, but it also warned that in August we were likely to see the beginning of the next risk off phase, which would likely be the ‘biggest’ move of 2012. Whilst in the extreme short term – days – more risk on is possible, we now feel comfortable in flipping from risk on to risk off and positioning for this major risk off phase.
Just in case something genuinely new and unusual is happening – we note that the risk on phase has, time wise, extended for a few more days than we had originally forecast - and in the interests of prudence, my stop loss on the risk off call effective immediately is a consecutive weekly close on the S&P500 at or above 1450. As the Global Macro Strategy team is looking for Mr Bernanke to disappoint markets at Jackson Hole next week, and also because we are confident that markets will soon discover that neither the ECB nor Eurozone politicians will actually be able to deliver on their ‘promises’, we are hopeful that our stop losses will not be triggered. For now we are happy to risk 30 S&P points against us, in order to potentially pick up 300 S&P points in our favour.
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