Wednesday, February 6, 2013

Bob Janjuah 2013 report triple top


In the medium term (2 quarters +/- 1 quarter), and as per the route map in my previous notes, I think risk can rally further. I continue to believe that the S&P500 can trade up towards the 1575/1550 area, where we have, so far, a grand double top.

This month, however, a correction is due, he said. He expects it to take the S&P500 down by 5 percent or so (from 1,515 to 1,440ish) over the first few weeks of February. But by the end of February and into March, the rally will resume, he said.

After the post correction rally Janjuah says, "I would not be surprised to see the S&P trade marginally through the 2007 all-time nominal high."

A weekly close at a new all-time high would I think lead to the final parabolic spike up which creates the kind of positioning extreme and leverage extreme needed to create the conditions for a 25% to 50% collapse in equities over the rest of 2013 and 2014, driven by real economy reality hitting home, and by policymaker failure/loss of faith in ‘their system’

Enjoy the dips, good luck for 2013 and beyond.