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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 | 3378462 fonzannoon
fonzannoon's picture

whatever.

Tue, 03/26/2013 - 16:21 | 3378655 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 | 3379116 Manthong
Manthong's picture

Tactical short?  Some folks prefer tactical long ..

.338 

Wed, 03/27/2013 - 04:24 | 3380361 rayban
rayban's picture

You mean long .308 Winchester, I presume.

Wed, 03/27/2013 - 05:13 | 3380389 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 | 3379255 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 | 3378477 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 | 3378481 francis_sawyer
francis_sawyer's picture

Way to leave yourself an "out" Bob

~~~

Huge brass cojones there...

Tue, 03/26/2013 - 15:37 | 3378484 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 | 3378496 Dr. Engali
Dr. Engali's picture

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

Tue, 03/26/2013 - 15:39 | 3378497 buzzsaw99
buzzsaw99's picture

Clueless. It only goes up forever.

Tue, 03/26/2013 - 15:46 | 3378536 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 | 3378615 css1971
css1971's picture

yawn...

Tue, 03/26/2013 - 16:24 | 3378742 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 | 3378942 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 | 3378503 morning_glory
morning_glory's picture

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

Tue, 03/26/2013 - 16:08 | 3378668 BobPaulson
BobPaulson's picture

You forgot Mr. Penis in that holy trilogy.

Tue, 03/26/2013 - 17:21 | 3378992 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 | 3379752 Rusty Trombone
Rusty Trombone's picture

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

Tue, 03/26/2013 - 15:40 | 3378511 Hongcha
Hongcha's picture

Keep pushing out those dates.

Tue, 03/26/2013 - 15:42 | 3378524 gdiamond22
gdiamond22's picture

What does SELL mean?

Sat, 03/30/2013 - 16:48 | 3392163 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 | 3378526 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 | 3378545 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 | 3378557 Lendo
Lendo's picture

Long foodstamps 

Tue, 03/26/2013 - 15:51 | 3378567 bobnoxy
bobnoxy's picture

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

Tue, 03/26/2013 - 16:33 | 3378785 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 | 3378959 kurnaz
kurnaz's picture

Use it wisely then. Humour requires intelligence mate.

Tue, 03/26/2013 - 17:11 | 3378960 kurnaz
kurnaz's picture

Use it wisely then. Humour requires intelligence mate.

Tue, 03/26/2013 - 18:20 | 3379160 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 | 3379205 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 | 3379911 tempo
tempo's picture

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

Tue, 03/26/2013 - 15:57 | 3378593 SillySalesmanQu...
SillySalesmanQuestion's picture

Long peas, lead and gold.

Tue, 03/26/2013 - 15:57 | 3378598 Tsar Pointless
Tsar Pointless's picture

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

Tue, 03/26/2013 - 16:13 | 3378689 RichardENixon
RichardENixon's picture

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

Tue, 03/26/2013 - 17:16 | 3378979 Remington IV
Remington IV's picture

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

CHIMP

Tue, 03/26/2013 - 17:19 | 3378986 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 | 3379010 The Invisible Foot
The Invisible Foot's picture

Europe will be the catalyst of failure.

Tue, 03/26/2013 - 21:27 | 3379838 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 | 3379045 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 | 3379119 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 | 3379120 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 | 3379134 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 | 3379195 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 | 3379231 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 | 3379307 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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