Thursday, January 23, 2014

Bob Janjuah forecast was on target

The Q4 2013/Q1 2014 forecast was for risk-on, but also I felt we would see one or two bouts of higher volatility and mild selling at the back end of Q4 2013 that I felt would be good entry points for tactical risk-on positioning. I had an S&P target by end-Q1 2014 of 1850 (from 1750), and a VIX target of 10 (from just under 14). It has been very pleasing to capture 100 S&P upside points since this call, and to note that so far the peak in S&P has been (to the point) 1850. 

The VIX rally has also played out directionally but, so far, 12 has been the low point. It is also pleasing to note that we did see some mild weakness in December in the risk-on trade, creating the risk buying opportunities I was looking for, whereby VIX peaked at just over 16 in December before rallying to 12.