Thursday, February 7, 2013

Common sense ignored during market tops

I always like to remind clients that, in the run up to the 2000 and 2007 highs, before the significant collapses that followed in the subsequent 18/24 months, markets seemed infatuated in Greenspan and his famous ‘Put’ the same way today’s teenagers seem infatuated with Justin Bieber, investor complacency was off the charts, volatility was at record lows, belief in ‘the system’ was sky high, and positioning was at extremes.

The flashing common sense warning signs were being ignored, if not mocked.

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.


Tuesday, February 5, 2013

Expect a short term correction


Bob Janjuah expects a correction that could 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.

"Tactically, over the next quarter or two, I expect to see one or two (at least) 5 percent to 10 percent dips or corrections ((there are after all many banana skins ahead in terms of politics, policy, and economic fundamentals), but which I think will be short lived,"

In a note to clients, Janjuah warns however that investors must not ignore the"flashing warning signs".

Monday, February 4, 2013

S&P500 could trade at 800 in 2014

Janjuah warns over the longer term, he is "very bearish", and forecast the S&P500 will slump throughout 2013, bottoming out in 2014 at around 800 points.