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Bears Beware, JPM's Head Quant Just Flipped To Bullish: "The Technical Buying Begins"
In late August, and early September, a previously unknown name, JPM's head quant Marko Kolanovic, emerged from relative obscurity, after he successfully called imminent market moves with uncanny precision, to wit:
- August 21, just before the Black Monday flash crash: "Why The Market Is Crashing Into The Close: JPM Explains"
- August 27: "JPM Head Quant Warns Second Market Crash May Be Imminent: Violent Selling Could Return On Thursday"
- September 3, before the next leg lower in stocks: "Home JPM Head Quant Is Back With New Warning: "Only Half The Selling Is Done; Expect More Downside""
So after punishing the bulls like clockwork, many were wondering when will Kolanovic flip bullish and dole out some overdue pain for the bears.
The answer: moments ago, when in a note providing an "Update on Technical Buying/Selling" he concludes that the technical selling is now officially over and the same technical sellers, among which the much maligned risk parity funds that pushed stocks in late August and early September, are now "expected to buy Equities."
Incidentally, the market started rallying the note was sent out just after 1:40pm Eastern.
The key excerpt from his note:
Update On Technical Selling
We wanted to provide updated scenario analysis of potential technical flows due to Volatility Targeting, CTAs and Risk Parity funds. We have estimated selling flows from these strategies in our previous research. Many investors are asking us under which conditions and when these strategies would start re-levering (i.e. buying equities). We have analyzed these scenarios based on the hypothetical models and assumptions discussed in our previous research.
The most likely candidate for near term buying of equities is Volatility Targeting strategies (Figure 7). Given that they follow short term volatility signals, and the fact that the 8/21 and 8/24 return observations are falling out of 1-month averages, these strategies are expected to buy Equities. Under various realized volatility assumptions (shown in the figure below) they are likely to buy ~$10bn over the next few days. CTA strategy flows are highly dependent on the future market returns (Figure 8). If the market stays at or below current levels, according to our models CTAs are not likely to buy or sell equities. Should equities increase by ~2-3%, CTAs may start buying in the coming days. There is also a large upside convexity in CTA signals that could result in significant buying should the market increase by 3-5% from current levels.
Risk Parity strategies represented the smallest part of technical selling in August (less than derivatives hedging, Volatility Targeting and CTAs). They often follow slower signals and hence would be slower to re-lever. Figure 9 shows estimated Risk Parity equity holdings, and simulated holdings under various assumptions of realized equity volatility going forward. Under reasonable forward volatility assumptions, we would expect limited flows from RP portfolios in coming weeks. Please note that our definition of RP assets includes in-house managed pension assets, as well as non-US Risk Parity assets.
In summary, technical selling pressure from VT, CTAs, and RP strategies sould be largely completed, and in the coming days/weeks flows may be skewed towards buying.
Finally, we wanted to address the much-talked about quarterly pension fund rebalances. Various analyses that we came across assume that pension funds rebalance at quarter-end according to a fixed weight asset allocation. This would imply buying assets that underperformed and selling assets that outperformed. Our view is that less and less assets are rebalanced according to this methodology (quarter end, fixed weights). Increasingly, funds are rebalancing based on risk-based prescriptions and rebalances are staggered/spread over various time intervals. This is also confirmed by various analyses showing a weakening of the quarter-end (reversion) effect.
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I couldn't give a shit, I haven't owned a single stock in over a decade.
Technicals my a$$.... ever wonder why they always focus on teh daily or 2min charts? Long way to teh bottom from here....
JPM Quant = JPM Cunt ;-)
Looney
IT'S A TRAP!!!
- Admiral Akbar
They are really trying with the 330 ramp, started a little early, now I know why. S&P is almost in the green now. What a clownshow.
are now "expected to buy Equities."
Some lil birdie whisper 'QE4' in your ear?
It will not matter. Pushing on a string.
Market rigging for fun and profit with JPM in the middle, getting their cut no matter what......
JPM is part of the Synagogue. The Synagoge do not need Technicals they rule the game! http://www.synagoguerising.com/
So they allways winning, does not matter how are these technicals.....
Whatever happened to fundamentals?
Now might be a great time to get back in.
Didnt down vote you but I think Mr. JPM fag toy is using his recent call of the market crash to show you can trust him. This is a branch of the squid afterall so I would expect these clowns are selling the rip. Remember they have to get in or out in small chunks of orders over time.
Good point.
To my knowledge, Obama also hasn't said anything about now being a good time to buy, so I should probably temper my enthusiasm.
I just junked him.
You never participate in a FRAUD.
This chart demonstrates that JP Morgan is acting as Plunge Protection and are using its coffers to elevate the prices.
This analyst was instructing his minions, his agents, to buy.
They are using YOUR DOLLARS, YOUR DEPOSITS, because when this little move FAILS, then they will expect that the Government will bail them out...again...or that their depositors will be Bailed In to bail them out.
The entire Market is rigged and fake. There is NO INVESTMENT. This is just outright fleecing of the plebs by this corrupt and fraudulent organization.
Anyone who encourages that one participates so that they can get fleeced is nothing more than a Dim Witted, Willing Dupe or a Corporate Shill.
So I just junked his post....and rightfully so.
Tom
Do you currently pay any tax like sales,fed,state?
Have you ever paid any tax like sales,fed,state?
Are you accepting their dollars for payment of services rendered?
Have you ever accepted their dollars for services rendered?
Have you ever collected social security,military pay,income tax check, or any other form of government assistance courtesy of the dumb plebs?
If you answer yes to any of the above then you have participated in the fraud UNITED STATES CORP.
If you answer yes to any of the above, does this make you a Dim Witted, Willing Dupe or a Corporate Shill who participated in fraud?
The whole point is participation of fraud is on Wall street to the farmer. Another example, you take a loan and accept usury. That is a form of fraud and to some who may be religious is a sin from the WORD of God.
If we are going to call out mother fuckers then lets call it out for all to see and understand.
My comment is not all directed towards you. I believe we need to call it how it is. Every single person in this country participates one way or another because the system is fraud and people unwillingly participate. The whole system is bullshit would be my comment after 4 beers. It starts with the squid which I agree 100% with you. We just need to show people it is everywhere and thats why we need a reset or divine intervention.
Then you are an idiot. This is the easiest money you'll ever make in your life.
And thats what its all about, right? *Easy money*... like taking candy from babies. Damn, I never get tried of watching this shit. Its like someone took a bunch of methamphetamine crazed monkees and put them in a round room...
The market started rallying soon after this note was released. Too bad if you were not on the Kolanovic mailing list.
Correlation does not equal causation.
So true... http://tylervigen.com/spurious-correlations
one correction; margarine is often used as a lubricant for sex in Maine, so there may be an actual connnection to that divorce rate.
I am not sure if I should ask the question because I am afraid of the answer.
Actually, on on the index charts I'm watching (IWM, QQQ,SPY etc.) it started at 11:15, saw initial profit-taking at all the stops up near the open near 1:00, then the second leg up began with his note. In fact, I believe the catalyst was the Daily Keltner channel bottom being hit simultaneously in all 4 major indices at once at 11:00, like a rare configuration of planets, mean reverters just couldn't resist.
Another idiot who can't see the forest through the trees. He's wrong and will be sent back to obscurity in 3...2...1... Take your 5 minute charts quant boy and crawl back under the rock from which you came from a month ago. Adults are playing here.
Pardon me if I don't "buy" into that.
ES 1920 cannot be broken. It cannot. Poor Gartman with his ES short at 1915
That can only mean one thing and that is they have told Yellen what to say and it will undoubtedly involve more QE.
Same stampede, different Mecca
Yeah, except these fools about to get separated from their money are rushing towards satan, and not that other Guy. Damn...who needs watchable TV shows when you have this instead...
transitory
Can you say, "Signal," as in "signal the market?"
Wonder who appointed this guy.
so its settled... fundamentals aren't important... algos rule
Fucking market is more of a joke today than normal.
What news got leaked at 2? Hints of QE4 in Janets talk today? NIRP? WTF?
Seriously, I was having a fabulous day till that fucking ramp up. Fuck you Yellenke!
anand here i thought technial analysis was a discredited science
Just in time for Q3 window dressing.
Oops, there goes Gold.
You were right, and it never even got to $1160.
The farce continues...
PPT Wing-man,apparently
daytrader alert
daytrader alert
Come on DBank.... sort this market out...
I am not a financial services professional but neither am I stupid nor live under a rock. I failed to understand most of that.
Its just the BOJ again.
JPM saying you should buy....that means they've got some shit to sell.
So that's the algo's taken care of. All we need now is a Gartman sell note and new highs are assured.
Has he just turned bearish again?
This is nice and all, but what is Gartman doing?
There is no "market" and the bandits on the inside at the controls love the fact that people still believe and use the term.
It's not even a casino, it is a venue for robbery in plain sight.
Of course P.T. Barnum was right back then and still right today!
Thats right, and at least at a Casino I might get free drinks, comped room, and even laid...OR I could get ass raped by some lying homoGeek Euro Trash.... hmmm... LV here I come.
Wrong. Remember - it's advertised, and biggies need to get the fuck out.
And once again confusion ensues!
Technicals do look like they are poised to move higher. Todays huge tail looks like tomorrow will be a big up day.
Its a day-to-day thing. Keep dry powder...for your next move (long or short).
Oh, this rally looks so tempting.
I want to buy into a market that represents an economy that the FED said just days ago: "Sucks so bad that were not raising interest rates for the 55 consecutive time".
Tempting. Let me sleep on it. Maybe they can send some microwave signals out tonight.
because fun da mentals...don't matter. ...decreased revenues...don't matter...just 'technicals'...
Half of the clients get this 'note' - the other half get the opposite if this 'note'. Hedging baby.
Again you do the opposite of what these banker scum preach...go short.
And who could have IMAGINED, the market is only down 60 points from being down 200+ earlier.
I'm shocked! Shocked I tell ya!
I had something very odd happen to me recently. My company opened up a brokerage account for us through our New York Life 401(k) plan w/ TD Ameritrade, with the only caveat that we couldn't buy stocks, only funds and ETF's. For years I've been putting money into PSLV, then suddenly I couldn't because as I found out PSLV was now classified as a stock, not an ETF. Anybody have any idea why that is? Same holds for PHYS. These are the Sprott Physical Silver and Gold Trusts, respectively.
-Argenta
Simple answer? Banks are lying. Good luck.
Same thing happened to my brother. the short answer is that you are being rail-roaded. All paper promises wil be worthless, period.
So what is one to do? Be sure to have the following;
1) physical
2) contracts for work
3) real assets that generate income
4) a dependable tribe to help manage and defend all of the above.
That is all..
Well, yes I agree paper will be worthless, but until then I tend to think the reason this happened is that there is a concerted effort to keep people out of metals, yet I can still buy SLV. It's a little odd to me. Could it be also that they're Canadian held entities?
I'm at Schwab with 401K and they allow everything (except short options and short futures, and no leverage).
Schwab 401K allows all stocks (PSLV, PHYS), and shorting style ETFs (e.g. SRTY) too.
You might be able to complain, or get others at your company to get a better setup at TDA, or get your company to switch to Schwab 401K management.
Hold still, this won't hurt a bit. Won't hurt US a bit, of course. That is the banksters sham!
Why do folks still listen to these continuing criminal enterprises, aka, banksters? Have you not read their non-prosecution agreements and their numerous Consent Orders? Does ANYONE remember Enron and which bank/broker was pushing it right up to the day it died?
Accounting is dead. Lies are king. People are the serfs.
Plutocracy/Oligarchy 2016 2+2=5 War is Peace
"are now expected to buy Equities"... huh... guess that means I have to. What if they gave a *butt-rapin* and no one showed up....
This has become a disguting fraud on the public.
Stocks are in a managed decline by 50-70% just like crude oil was
QE4
Dollar 0
That guy's got a big jawbone.
So JPM quant imitates the Mona Lisa smile and the world gets ignited into a bull run?
Bitcoin $236 and climbing.
This guy has got to be fucking joking... Yeah, buy the shitty stock because your model says so, but the company's earnings are in the shitter, and it's trading near ATH.
This 10% correction whoopla is a buch of shit. These markets have a long way down to go still. It's going to be a slow agonizing trip to the bottom.
nothing has changed with the fed buying stocks except the numbers (if you believe them)..15 billion in september dropping to 10 billion in october
http://www.newyorkfed.org/markets/tot_operation_schedule.html
If "nothing else changes" maybe the markets will get fix-ated on the "new normal".
Just wait for commodities to drop out or Germany or China...then BAM ! next leg down.
Timing, but keep an eye on Oil, and copper futures, seems like they go down first before the market re-sets down.
Insider Trading.
When we get rallies, which we will, just short the vix. UVXY, VXX, TVIX or go long XIV.
in the real world...another store closed in town