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Bob Janjuah Tactical Short But "We Are Not There Yet" For The Big One

Tyler Durden's picture





 

Following Nomura's Bob Janjuah's 'wine into water... are we there yet?' note in February, the market has followed his script almost perfectly with a continued push to new highs and a small sell-off that was bought excitedly. While he remains convinced that "in terms of positioning and sentiment, we are 'not there yet'," for his 50% S&P 500 plunge; he does believe Q2 will see a 5-10% dip to 1450 as the shambolic policy responses to Cyprus and the 'cat' that #DieselBoom 'let out the bag' add to increasingly weak global growth data. While this dip will also likely be bought, the bearded bear expects the market's comeuppance to arrive late 2013.

 

Via Bob Janjuah, Nomura,

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.

 


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Tue, 03/26/2013 - 15:34 | Link to Comment fonzannoon
fonzannoon's picture

whatever.

Tue, 03/26/2013 - 16:21 | Link to Comment sunaJ
sunaJ's picture

The last thing that TPTB would want is to have zero hour occur in the middle of the Summer (people being much more restless, willing and able).  This dynasty would fight tooth and nail to prevent that.  If they can control it (a big IF), this winter looks like the perfect time to explode this fraud bubble, an all-out attempt to seize as much power and money as possible.  At that point, if Juanjah is correct, the "exuberance" and muppet belief (or compulsion to be in the markets) should be nearly vertical.

Economically, it seems like this makes a lot of sense, though I am not as studied in economics as I am in defense/security (of course they will be correlated).  In this realm, I also see a good confluence of indicators for this winter.

Tue, 03/26/2013 - 18:06 | Link to Comment Manthong
Manthong's picture

Tactical short?  Some folks prefer tactical long ..

.338 

Wed, 03/27/2013 - 04:24 | Link to Comment rayban
rayban's picture

You mean long .308 Winchester, I presume.

Wed, 03/27/2013 - 05:13 | Link to Comment AmCockerSpaniel
AmCockerSpaniel's picture

No; Not 308, but .338-378 Weatherby Mag. Check it out for long long range shooting.

Tue, 03/26/2013 - 18:44 | Link to Comment RockyRacoon
RockyRacoon's picture

You are speculating about how and where the deck chairs will be shuffled.   I own no stocks so I see the "markets" as a thermometer with a match being held at the bulb.  Pretty soon the thing will burst.  I hope to be far enough away not to be spattered with the feces that rises and falls to mark the "sentiment" of the massaged equities.

Tue, 03/26/2013 - 15:37 | Link to Comment ihedgemyhedges
ihedgemyhedges's picture

One thing I've started seeing is mutual funds that are risk tolerance based i.e. Growth, Balanced, Moderate etc are nearing the max on their equity/bonds range.  One I looked at in particular (Balanced) was 55/45 at end of 2012.  It's now back up to 70/30.  New mutual fund flows aren't necessary yet to keep driving this sucker higher.  Throw in "International" mutual funds that may be selling off European cos and adding US cos and you got a bubble that keeps on growing...

Tue, 03/26/2013 - 15:37 | Link to Comment francis_sawyer
francis_sawyer's picture

Way to leave yourself an "out" Bob

~~~

Huge brass cojones there...

Tue, 03/26/2013 - 15:37 | Link to Comment q99x2
q99x2's picture

Dow 26,000 as Bernanke trys to thwart the revolution. Well it won't work. The citizens are already having victorious battles. We're coming for you banksters Gonna have your asses hauled off to jail. 

Tue, 03/26/2013 - 15:38 | Link to Comment Dr. Engali
Dr. Engali's picture

Buy gold Bob..you won't be sorry.

Tue, 03/26/2013 - 15:39 | Link to Comment buzzsaw99
buzzsaw99's picture

Clueless. It only goes up forever.

Tue, 03/26/2013 - 15:46 | Link to Comment francis_sawyer
francis_sawyer's picture

Translation:

~~~

"If joo bankers keep counterfeitting joobux out of thin air in a timely way to forestall the absolute breakdown of trust when the "100th monkey" threshhold is reached [which means a worldwide bank run]... We're cool... If not, the 'market', according to out panel of EXPERTS, is at risk of doing a fibonacci retracement...

I'll keep you informed along the way as long as you keep your funds safe with me...

Tue, 03/26/2013 - 15:59 | Link to Comment css1971
css1971's picture

yawn...

Tue, 03/26/2013 - 16:24 | Link to Comment francis_sawyer
francis_sawyer's picture

Is that a fucking 'ball & chain' avatar there [or what TF is that]?... If it is ~ it would completely explain your fatigue...

Tue, 03/26/2013 - 17:08 | Link to Comment anarchonomics
anarchonomics's picture

yawn .................. 'out panel of experts' ............... you have a panel of gay experts, or you just spell like the blockhead you appear to be.

Tue, 03/26/2013 - 15:39 | Link to Comment morning_glory
morning_glory's picture

Ass this is KY Jelly. KY Jelly meet Mr. Ass

Tue, 03/26/2013 - 16:08 | Link to Comment BobPaulson
BobPaulson's picture

You forgot Mr. Penis in that holy trilogy.

Tue, 03/26/2013 - 17:21 | Link to Comment Beam Me Up Scotty
Beam Me Up Scotty's picture

Oh when it's all said and done you will wish it was just Mr. Penis. It will probably more then likely be the fist if not the whole damn forearm.

Tue, 03/26/2013 - 21:05 | Link to Comment Rusty Trombone
Rusty Trombone's picture

Ever see Caligula and his  "gift for the groom"...

Tue, 03/26/2013 - 15:40 | Link to Comment Hongcha
Hongcha's picture

Keep pushing out those dates.

Tue, 03/26/2013 - 15:42 | Link to Comment gdiamond22
gdiamond22's picture

What does SELL mean?

Sat, 03/30/2013 - 16:48 | Link to Comment AbbeBrel
AbbeBrel's picture

SELL are "Shit Eating Luck Losers" who BUY BUY BUY all the way down.   At somepoint, EVERYBODY is going to sell to SOMEBODY.    Should get interesting.   SHEEPLESHEARING is inevitable - the timing (being based on human psychology) is the hard thing to call.   Who can predict the actions of several billion deranged "investors"?

Tue, 03/26/2013 - 15:42 | Link to Comment Yen Cross
Yen Cross's picture

      Hey Bob does that consecutive weekly close above 1575 s/l have a number on it?

Oh, how silly of me. It's a reverse buy order @1601 right?

Tue, 03/26/2013 - 15:45 | Link to Comment mdtrader
mdtrader's picture

We are almost 9% above the 200 DMA, which is just ridiculous. That's never been a time buy.

Tue, 03/26/2013 - 15:48 | Link to Comment Lendo
Lendo's picture

Long foodstamps 

Tue, 03/26/2013 - 15:51 | Link to Comment bobnoxy
bobnoxy's picture

How many times does this guy get to swing and miss?

Tue, 03/26/2013 - 16:33 | Link to Comment peterUK
peterUK's picture

LOL. The same question should be asked of ZH, of course. It's been remorselessly, relentlessy wrong about the markets for as long as my dick. Which is long indeed. 

Tue, 03/26/2013 - 17:11 | Link to Comment kurnaz
kurnaz's picture

Use it wisely then. Humour requires intelligence mate.

Tue, 03/26/2013 - 17:11 | Link to Comment kurnaz
kurnaz's picture

Use it wisely then. Humour requires intelligence mate.

Tue, 03/26/2013 - 18:20 | Link to Comment nmewn
nmewn's picture

I say ole bean, have you gotten all of your money back from the 08-09 crash? ;-)

Tue, 03/26/2013 - 18:32 | Link to Comment silverserfer
silverserfer's picture

hmm, put $ into price suppresed PM's or into price inflated equities... Tough one there

Tue, 03/26/2013 - 21:49 | Link to Comment tempo
tempo's picture

According to his commentary, he has been right all the time. What a joke.

Tue, 03/26/2013 - 15:57 | Link to Comment SillySalesmanQu...
SillySalesmanQuestion's picture

Long peas, lead and gold.

Tue, 03/26/2013 - 15:57 | Link to Comment Tsar Pointless
Tsar Pointless's picture

So it's settled, then. S&P 1750 here we come!

Tue, 03/26/2013 - 16:13 | Link to Comment RichardENixon
RichardENixon's picture

Yes. Unless I jump in. Which I won't. So, yes.

Tue, 03/26/2013 - 17:16 | Link to Comment Remington IV
Remington IV's picture

How's the bombshelter coming along ?????

CHIMP

Tue, 03/26/2013 - 17:19 | Link to Comment chasman
chasman's picture

I predict the market will at some point in time go down some and then go back up. Then at some point go sideways.

But timing is everything, remember that. I like to buy when the market is down and sell when the market is at its peak.

During sideways movements I go on vacation from my winings. I have this market stuff all figured out.

Did I get the just of the article about right?

/sarc off

 

Tue, 03/26/2013 - 17:28 | Link to Comment The Invisible Foot
The Invisible Foot's picture

Europe will be the catalyst of failure.

Tue, 03/26/2013 - 21:27 | Link to Comment sumo
sumo's picture

Kyle Bass says Japan is the likely catalyst, and he's smarter (and richer) than the average bear.

Tue, 03/26/2013 - 17:38 | Link to Comment Freaking Heck
Freaking Heck's picture

I'll confuse you sufficiently with my "sophisticated" speak, while attempting to show authority with throwing in some numbers. I'll make it short enough not to lose your attention and ensure that you are left thoroughly confused and in awe of how figured out I must have it.....the unsaid is that you will need to send me your money to show you the path to enlightenment.

Oh and after you've been sending me money for some time and are confused that you're been losing I'll be able to blame you for not "understanding" by pointing out my numerous retractments of anything I've ever said. I simply am never wrong and can prove it...either way.

Tue, 03/26/2013 - 18:04 | Link to Comment mind_imminst
mind_imminst's picture

I am not a professional investor, but I am very wary of shorting anything in a central-banker led inflationary period. Any "paper" financial instrument is going to be pushed nominally higher by central bankers. Seems like a good way to lose a whole lot of fiat.

Tue, 03/26/2013 - 18:05 | Link to Comment mind_imminst
mind_imminst's picture

I am not a professional investor, but I am very wary of shorting anything in a central-banker led inflationary period. Any "paper" financial instrument is going to be pushed nominally higher by central bankers. Shorting seems like a good way to lose a whole lot of fiat.

Tue, 03/26/2013 - 18:10 | Link to Comment Registered Inve...
Registered Investment Advisor's picture

The bubble has not started yet, look for the signs.  A true equity bubble will have emerging markets leading the way, so far EM has underperformed domestic markets.  In fact, EM are negativve for the year which means that true RISK ON has not developed yet.  Remember during 06-07 EM was up between 200-600% in some cases!

Tue, 03/26/2013 - 18:27 | Link to Comment chump666
chump666's picture

The crash will come out of Asia, more so China.  Like 1987, HK blew up first and then so on...

Also, looking at a war, major 3-6mths from here.  That being China/Japan, or Argentina/UK, followed by the middle east. EM markets are getting slaughtered by the oil price, should set the world on fire very soon.

Tue, 03/26/2013 - 18:38 | Link to Comment Registered Inve...
Registered Investment Advisor's picture

Yes, the crash will start in Asia when earnings and growth flatline or go negative.  We are still a long way away from that, we still need a huge Asia equity bubble.  The propery bubble does not count because asians have 87% equity in these properties, a true property bubble starts with 110% financing.  The Chinese only borrow 17-18% on average per home!

Tue, 03/26/2013 - 18:54 | Link to Comment chump666
chump666's picture

No you don't.  You need a commodity crash, which looks likely, equities are already indicating that out of Asia.  If EM markets slowdown hard or crash, they get stripped of their creditor status (Asian bonds collapse).  Will blow Western markets apart.  Also you have inflation issues from oil/energy inflation.  Another negative is the loan/USD black markets, they collapse should flatten a lot of Asian/South American businesses. 

Now, as we stand in these interconnected and manipulated markets.  There will be no where to hide.

We all have it coming.

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