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One Bank Has Had Enough: FBN Says "Time To Turn The Boat Around" Switching To Bearish Outlook, 1870 Target
Via FBN Securities' Chief Market Strategist Jeremy Klein,
As someone who steadfastly held onto a bullish outlook, I desperately hoped that volatility would remain contained as the various sentiment metrics that I track, such as TICK readings and open interest in the futures, pushed deeper into overbought territory. Trading ranges crept higher last week and have failed to narrow. Although the amount of skittishness is not excessive, it has moved to dangerous grounds to push many of those investors who have feasted on dips over the past five years to the sidelines. Consequently, I am officially switching to an intermediate term bearish outlook this morning.
I assess the fundamental environment as neutral. While extremely transparent monetary policy and estimated robust earnings growth are unambiguously favorable, the forward multiple on the S&P 500 still resides within spitting distance of its upper bound since 1990 save the era of the Dot Com Bubble. Hence, stocks bumped into a ceiling once the blue chip index began flirting with 2,000 as companies have little room for error when announcing their results.
Some macro data points have exhibited definitive signs that the economy has accelerated. However, weakness overseas and a disappointing miss of consensus by the Jobs Report throws into question the optimistic assumptions about the global recovery. Moreover, a relentless rally in the Dollar will crimp profits for multinational corporations. The strength in the Greenback is starting to garner attention from traders. With the Fed ambling toward a path of restrictive measures, this trend in the F/X markets is secular in nature. Nevertheless, the FOMC will almost assuredly delay any decision to pare its balance sheet passively via a cessation of the reinvestment of the proceeds of maturing assets until mid-2015 at the earliest such that any retracement that does arise will be cyclical in nature to offer a fortuitous buying opportunity at its terminus.
Although the calendar remains largely quiet in the coming days, I envision that the wide price swings will persist. The magnitude of the drop in the wake of the anticipated launch of the “Apple Watch” should have concerned portfolio managers. While the news out of Cupertino only pertained to the tech giant and a handful of other companies related to the product suite, the broader indices were dragged around like a rag doll.
This sensitivity to headlines reflects an attempt by many firms to salvage performance for 2014 by augmenting their exposure aggressively over the past several weeks. Similar to the countless number of jockeys who have failed in the grueling 1.5 mile Belmont Stakes by asking for their horse to start its kick too far in front of the finish line, these funds moved too soon as year-end still sits far off on the horizon. This incremental positioning grossly inflated the average monthly NYSE closing TICK which extended to +338 on Monday. Thus, the muscle for a protracted selloff is intact.
The pullbacks from January and May 2013 mark the most recent instances of an expansion of volatility concurrent with this critical technical statistic stretching to such lofty heights. I therefore forecast a 7% decline in the S&P 500 from its intraday top printed on September 4 to yield a target of 1870. Since security prices are negatively skewed in that they fall much faster than they rise, the descent will occur rapidly. I project that a bottom will arrive sometime in October but will adjust this thesis if the broader indices refresh their peaks and session ranges again collapse to more palatable levels. While few names will avoid the downward pressure, small capitalization shares and high beta tickers will suffer the most damage.
S&P 500 Cash Key Technical Levels
Support: 1984.75, 1977.50, 1974.25, 1969.00, 1965.00, 1955.00, 1941.50, 1938.00
Resistance: 2000.50, 2007.00, 2011.25, 2025.00, 2050.00
Fair Basis to ESU4 (source: Bloomberg): -0.92
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...and his track record on calls is.....?
Heretic.
( a dissenter from established religious dogma)
Stop singing it and start bringing it!
How does he feel about nailguns?
short-term, I guess I could possibly see a slight pull back in these manipulated markets...but only as a false "head fake" by the Fed. But no matter what there's absolutely nothing else the Fed can do but to stay the course in the long run or risk a total collapse. Of course, doing what they've been doing is also what will cause the collapse. But kicking the can down the road and lying about everything has become their only play and it's all they can continue to do.
Maybe this guy sees a short term pull back because the Fed is scheduled to end QE in October while the ECB will pick up and start it's own QE. Once this causes enough of a pull back on our side then the Fed probably plans to start QE again maybe in Jan. 2015?
So they'll take 4Q off from QE'ing and let the insiders take their profits and let off some steam from the markets in order to continue the scam and illusion of a fake short-term "correction" (albeit a completely manufactured correction) from this current insane high spot. Then come 2015 they'll start the next fake climb by starting up more QE and driving the markets to the next step higher?
I dunno...just speculating here. I don't really give a rat's turd anymore what they do. As long as phyzz continues to be on sale and available at these insanely low fiat values then I'm gonna keep stackin'.
Stay outta these so-called "markets" or you'll get fleeced for sure. And get out of the bankster system as much as you possibly can now while you still have the chance. It just ain't worth the risk anymore. Let these fuckers play their games and destroy their fiat. In the long run, stackers will prevail.
The recent drum beats and flames of war have distracted many people from focusing on the economy. The markets are extended beyond beyond. This all comes at a time when the IMF is calling for more QE. This might be a good time to review the reasons this is economically unsound and a bad idea at a time markets are setting new record highs while economies continue to struggle.
The policies of the last six years have yet to produce the desired and expected results promised. As a consolation many economist, bankers, and those who have benefited greatly tell us we would be in far worse shape if we had not taken this course. Now it seems Central Banks and the IMF are clueless on how to proceed and a policy going forward. More on the lack of a clear path in the article below.
http://brucewilds.blogspot.com/2014/09/central-banks-and-imf-clueless-on...
the economy is kicking the king dollar is alive and well, jobs are humming, Isis will be destroyed and the bear has been put to sloop. that's what the MSM is saying so all must be rite? what's up with the negative article surely it pushes the markets higher and my PM lower rite.
SHIT
...to yield a target of 1870 [1]. Since security prices are negatively skewed in that they fall much faster than they rise, the descent will occur rapidly [2].
1) there is no difference between S&P 1999 and 1870. imo both are grossly overvalued.
2) bollocks. prices fell in japan for 20 years and bounced off the lows (in nominal terms) only recently after much debauchery.
anyone check with Rutherford B. Hayes on this?
Grover Fucking Cleveland?
Fuck...dig up that bulbous nosed J.P. Morgoon his-self for mentoring.
1870?
LOL.....nigga please!
indeud. the nikkei went up for 7 years then down for 13.
http://www.youtube.com/watch?v=MYpnINrZM_M
I had to laugh when I read this yesterday; market will never go down!
http://money.msn.com/top-stocks/post--why-this-market-will-never-go-down
hyperbole aside that was a poorly written piece full of inaccuracies
JPM. trees always grow to the sky, I ride unicorns everyday!
Don't let the world-renowned (chuckle) analysis of FBN scare you, just BTFD. Fundies, metrics, this, that... nothing matters anymore.
A whole whopping 7%. The sky is falling, the sky is falling. Ain't gonna be no appreciable pullback until President Choom's exit in 2016. His cronies will milk this mutha till the teat whistles dead air.
The best place to be in this market is somewhere else... unless you are an insider with a direct conduit to the exchange...
btw... any bets on tomorrow... false flag? or have they ridden that pony into the ground? And if in fact we get such an event, how big a bump is that worth to the market? Proportional to the number of dead?
We live in an age that is declarative proof that there is no limit to man's depravity...
I forgot tmr is the ominous 9/11. My money says nothing will happen, just like every other 9/11. If a false flag happens, I expect it would happen when nobody is expecting it.
It won't be long until Wall Street wakes up to the fact that it can make more money dropping the market 20% then bouncing it back up -- rather than whipping it for a few more percent to the upside.
The opposite of rally is not plunge.
The opposite of rally is... sideways.
It's starting to get REAL QUIET.
Quite? We just restart the reactor the other day, it was down for 3 months, now that's quite.
Gains are only realized after you sell.
Same as it ever was.
Wow, an "1870 target" is uber-bearish, as the S&P 500 wasn't started until 1923. Still, I think it could make it there . . .
robust earnings growth? With no revenue growth? and Buybacks maybe peaking?
they have to keep the buybacks growing to grow eps and have to keep non gaap earnings adj growing to grow earnings.
WTF is FBN?
fox business news or jerkoff sellouts
Wow. 7%. This dude gets paid how much to make such insignificant calls?
A 7% correction would be a gift to load up for 2200-2300. Next article.
Yes, that too... pretty fucking weak. Why are these asshats compensated so well?
If you are not in the circle jerk, you will not be able to understand it.
Unless he's talking DOW, not S&P; Meh.
What BS.
He puts SP 2050 as resistance when the market has never traded there; probably some extrapolated analytical Fibonacci number or some other analytical sophistry nonsense.
2066 is the FIb numbr i have.
All reading from the same handout, little difference here.
Zzzzzzzzzz ..... next?! Is ZH becoming CN=BS? I expect better than mainstream trash here.
At least he hit on the idea that a stronger dollar will hurt multi nationals profits.
It doesn't matter what a bank or a hedge fund manager thinks. Even if 99.9999% of people and algos think the market is set to crash, it will still go up because the fed is there to buy every stock sold.
Janet gelds the Bull
Barack baits the Bear
The Circus leaves a Will
First out gets all the beer .