Bob Janjuah on The S&P Trek From 1,400 To 1,000 To 800

Tyler Durden's picture

Between 'Twist+', his belief that Germany will 'blink' leaving any eurozone breakup/exit unlikely this year, and confidence that the US (Fed) and China (fiscal and monetary) will attempt once again to pump things up, Bob Janjuah (of Nomura) expect to see a risk-on phase that lifts the S&P - possibly climbing the wall of worry back up to the 1400s by late July or early August. His stop-loss (which would be very bearish in his view) is a weekly close under 1267 for the S&P. And then? He would look to position for an extremely bearish risk-off phase over late August through to November or December. The drivers of this extremely bearish expected phase are not new: overly bullish positioning and sentiment; weak global growth, not just in the eurozone but also in the US and the BRICs; the next leg of crisis in the ongoing eurozone debacle in my view; and of course the looming US fiscal crisis, which in Bob's view is not even ‘slightly’ priced into markets, but where he feels the probability of a crisis is close to 75%.

From Bob's latest missive:

Hopefully by year-end US sell-siders will realise that blaming the eurozone crisis for everything that is going wrong in the US has been a serious error, which has resulted in them being blind-sided to the other real ‘gorilla’s in the room’ – namely the US debt/fiscal weakness, and the hard landings now beginning in the BRICs.


My forecast for this extremely bearish risk-off phase over late Q3 and Q4 is that the S&P500 trades below the low of last year, perhaps as low as 1000 +/- 20. The iTraxx Crossover index should over that period widen from around 550/600bp (my end July/early August risk-on target) out all the way to certainly 800bp, and more likely closer to 1000bp. And we should see core bond yields rally hard – I expect 10yr UST yields to rally from my 2.35%/2.45% end July or early August target, all the way down to 1.5%, maybe even lower.

Into 2013-14, I am still concerned that my long-standing 800 S&P500 target will be hit, but it will not be a straight line. In December or early 2013, I expect Bernanke to give us a substantial dose of QE3, in response to the growth and fiscal crisis that I expect the US to be suffering from at that time. This QE3 will provide a short but sharp risk-on relief to markets. But as I forecast, once its ‘benefits’ subside (in weeks) it will be the failure of this QE3 to ‘fix’ things that, I fear, will open the door to 800 S&P. I will write more on this issue later this year.


For now, I recommend using the next 4-8 weeks of risk-on to trade tactically, to put in place long volatility trades and other portfolio hedges, and to lighten up on risk.


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LawsofPhysics's picture

I agree.  selling paper commodities I bought cheap.  People looking for exits before the election.  Time to have more dry powder on hand ahead of central planning stupidity.

slaughterer's picture

What if Q2 earnings suck?  

Short Memories's picture

Don't forget the dead cat bounce at the end though

Randall Cabot's picture

Where was this guy yesterday at about 3pm?

LawsofPhysics's picture

Sorry, clarification- I am selling into this "rally", earnings will be spun as "muddling through" but will be bad.  Sorry for the confusion.  I agree in so much as the "markets" get crushed into August and the election.

El Oregonian's picture

In light of yesterday's Supreme Court ruling we're going to have to pay a "TAX" on that thought...

Hey assbite who just junked me. Screw you schmuck!

slaughterer's picture

We see a pop rally of SPX to 1367 maximum (EUR/USD 1.2750 maximum) and then the decline sets in.  

Models anticipate a surprisingly disappointing earnings season ahead, esp. in cons. discr./retail and industrial.

We anticipate even AAPL will disappoint or have to resort to channel stuffing to fudge or some new product rumor.

We will be shorting freely before earnings reports this season.  

midgetrannyporn's picture

expect to see a risk-on phase that lifts the S&P - possibly climbing the wall of worry back up to the 1400s by late July or early August...

Back up to the 1400s before lunch today is my guess. The rest is spot on imo.

DeadFred's picture

This phase of the rally is already getting stretched to the top of the Bollinger bands. From here to the top will be the 'normal' QE-like ramp band of BTFD small drops and ratchet ups on MSM good news and futures pops. Ther won't be enough real money for an honest rally but between the short squeeze and the algos they will be able to take it at least to the old highs. The drop to 800 wil need an outside force to remove the Bernanke put psyche from the market. Ironically this rally will help with that, how will we get LSAPs in August if the S&P hits new highs in July?

Itch's picture

A terrible lot of people are immediately coming out of the woodwork here and calling for the focus to fall on the US. This is the fourth person i have heard mention it today, give it a week at this rate and the tables will be turned in no time.

Ghordius's picture

"Hopefully by year-end US sell-siders will realise that blaming the eurozone crisis for everything that is going wrong in the US has been a serious error, which has resulted in them being blind-sided to the other real ‘gorilla’s in the room’ – namely the US debt/fiscal weakness, and the hard landings now beginning in the BRICs."

This can't be. This is insane. Don't read it, don't take any notes, the eurozone crisis is the reason why milk spoils in the fridge

GeneMarchbanks's picture


Then the Europeons can poke fun at the Ryan Plan ;)

Ghordius's picture

a battle of austerity plans? we are already rolling out Austerity 2.0, the previous version was somewhat buggy...

falak pema's picture

the crux of the matter is at the heart of the ponzi land; I only have one claim to rational thinking and its going back to root causes.

This is too big a deal to hide under the carpet; as its civilization tipping point. Rome is where its all about. 

Ghordius's picture

falak, the problem with "ponzi" is that a lot of technology - including in finance - behaves like a "ponzi". A bloody bridge is a "ponzi", where you walk over air instead of solid ground, "cheating" the laws of nature. You only know if it was a ponzi the day it collapses, particularly if you miss the upkeep

example: when Midas launched gold as money, the Spartans cried ponzi and kept meteoritic iron as money. the Spartans were wrong, Midas was right, the silver-loving Athenians were half right and half wrong

finance, by bridging the future to the present, behaves like a "ponzi", always. and it holds, until it doesn't. which can be tomorrow or in 40 years.

the keystones are, as JPM (the man) said: confidence and character. lately, confidence is wobbly and character is lacking

falak pema's picture

lol, a nice trip down history lane. But, our current ponzi is "bubbleonomics gone viral". And there is no end to it as its been programmed by the Oligarchs since thirty years. You cannot dissociate money creation from real economy, introduce huge structural imbalances like never before between culturally disparate continents on different agendas, conduct a rampant militarist and industrial fueled model to limits beyond recognition divorced totally from its ground based value systems, and not expect to pay the consequences one day. 

Its more than just a financial game, its civilization at impossible crossroads. 

ThisTimeIsDifferent's picture

"Its more than just a financial game, its civilization at impossible crossroads. "

Yep, there is socialism in your future.

When you are an oligarch, capitalism is a risky system because it invites and rewards your challengers. Thats why investment bankers since the early 1900s have "gone political" - prefering a good government regulated monopoly to free enterprise.

"Dear Mr. President:

I am in sympathy with the Soviet form of government as that best suited for the Russian people..."

Letter to President Woodrow Wilson (October 17, 1918) from William Lawrence Saunders, chairman, Ingersoll-Rand Corp.; and chairman Federal Reserve Bank of New York. 

(Antony Sutton, Wall Street and the Bolshevik Revolution, 1974).

Communism was only temporarily suspended in 1989 -  it is time for "reculer pour mieux sauter" (retract and jump better next time).

vast-dom's picture

for fuck's sake this SP at 800 has been churned through too many times with no actual plunge. my narrative remains SP 800 hell highwater alien invasion etc.

CPL's picture

Seconded.  TPTB are going to print with or without the governments of the world now.

vast-dom's picture

yeah can read my comment in that post ;)...........time to make the back when the extra extra fake headfake 3-4pm bullshit commences.....

LawsofPhysics's picture

We have a winner.  How much is left in that inflation buffer is also still debatable.  The only thing that is not in question is the very real inflation Americans will experience post election.

vast-dom's picture

i'm gonna set that chart as my desktop image lest i dither on that will shall pass. 

DeadFred's picture

It looks like he's been hacking my crystal ball. 1460 at the top and a little flatter at the peak I think.

tocointhephrase's picture

Bob, your a dude! Oh and it was nice to see you drop the old 'fiat currency' line with Sedgwick the other day. BINGO!

GeneMarchbanks's picture

Hopefully by year-end US sell-siders will realise that blaming the eurozone crisis for everything that is going wrong in the US has been a serious error, which has resulted in them being blind-sided to the other real ‘gorilla’s in the room’ – namely the US debt/fiscal weakness, and the hard landings now beginning in the BRICs

No chance of that. The US has no fiscal gorilla.

Hubbs's picture

Ho hum, another useless predicition. Everyone has them. Then they have to qualify their predictions with more what if's. Heaping inference upon inference, uncertainty upon uncertainty.

When TSRHTF (when the shit really hits the fan) things are likely to happen a lot differently than anyone is predicting.

Right now, all I am hearing is a bunch of farting in the bathtub. Yeah, the bathroom stinks, but right now I am not having to clean up any splatter.

Xibalba's picture

With gas at >$5 at the pump....? RomneyObamacare on the horizon? A shitty earnings season?  How is that bearish?  #thinklikethefed  

HaroldWang's picture

"Risk off" starts in about 5 minutes. Seriously, Bob, we're gonna get some ugly earnings reports and more dismal data. No way we go to 1400 and will soon be testing the 200 dma once again.

midgetrannyporn's picture

1:33 p.m. eastern today will mark the top for the rest of the year. /stupid prediction

Cursive's picture

If Brian Sack can stop it at 800 for a "generational bottom" then good luck to him.  We will test SPX 666 and lower before the end of 2014.

kaa1016's picture

What the fuck ever. I'm sick of people using rational logic to justify the market (including me by the way). This market, today being exhibit A, does not move on logical rational thinking. It's a fucking casino where you should be using nothing but weekly options to control your absolute risk. Whenever the market looks like it's about to plunge, take the other side, especially if it's month/quarter end/options expiration.

MillionDollarBogus_'s picture


Corzine is walking the streets along with countless other finance hacks who helped get us to this place.

Nothing makes sense anymore.  There is very little accountability. 

The game is rigged, but beyond the stock markets, where else should an investor look for a short term profit..??

midgetrannyporn's picture

the corzine example is hardly bullish.

DUNTHAT's picture

You can't use logic on institutional manipulation unless you know their plan.

If you must trade, do so in markets where they don't play.

To me, the only safe thing are some of the futures markets.

fonzannoon's picture

he did not mention qe4 yet in july 2013. or qe5 in sept 2013.

Spastica Rex's picture


1) Delay civil unrest for as long as possible.

2) Funnel "money" to those at the top while doing so (they wouldn't be at the top if they didn't earn it).

Nobody knows how long this can go on.

centerline's picture

They are going to keep propping everything up by whatever means possible, no matter how ugly or stupid, until at some point the system just outright collapses.

tocointhephrase's picture

That calls for a SILVER BITCHEZ!

Peter K's picture

Next bailout rumor denied by......... Slovenia. Can Austria be far behind?



Jake88's picture

All the euphoria over the eurozone which by the way is entering a depression is kind of comical as fundamentals at home are sliding back into the crapper.

Hype Alert's picture

This is like the 19th rally on a fix postponement.

nomorebuyins's picture

Sack is signing into his ramp system as we speak. We should see some crazy shit this afternoon when this risk-on rally fades.

michigan independant's picture


Made the year last ramp. No reason to be negligent since they already are. Margin will be hard when bones are showing. Russel componets already ramped down will be sold to maintain the chosen ones for ebit and are in the process.

Rick Masters's picture

I've been reading this site for over three years now, found it in June 2009, and have been hearing the end is near repeated over and over...yet it never comes. I know, I know: the markets can stay irrational longer than I can stay solvent. But there comes a time where a man has to ask himself if what he believes in is simply not true. I believe(d) we are (were?) in a fiscal mess and soon the house of cards would fall. But it seems someone put that house of cards up with some super glue. In short, I don't think I can believe in this site, its vision for the future and its gloom and doom predictions anymore. I've seen some of the brightest posters get kicked off this site one by one by some of the mouth breathers on here: notably, Cheeky Bastard. God, I miss him. But I also miss Trav777. He wasn't as stock savvy as Cheeky, but he had something to say. Just because some people disagreed was no reason for the groupthink, slimeball attacks that forced him out. In fact, all the best all gone. I was never one of the best, I just got the chance to see some great financial minds in action, and I'm thankful for that and for all I've learned. I'm thankful to almost all of you and especially Tyler. I'm not thankful and despise some of the mouth breathing demos and rethugs (ALL OF THEM, FROM BOTH PARTIES)  that came here to spread their stupid propaganda as if any republican or democrat can fix this mess, oh and I'm not thankful for the bigoted Joo-hating nazis ( I hate them). They have partly ruined this great site. Part, most of all, I just can't take all this doom and gloom anymore. I'm worn out from waiting. I drink too much. I can't take it. I'm only 30. I have my whole life ahead of me. And though I'll always be a believer, right now I think I might have to stop coming here (yeah I'm sure you'll miss me, not!). It's just too gloomy and i look out the window and I see sunlight and I see how beautiful the world is and how it is worth fighting for. But right now, I just want more sex. These kind of thoughts and beliefs don't exactly make the ladies wet with anticipation. Maybe this hiatus is for just right now but I have to live and I can't if I constantly think the end is near. So, I may go stick my head in the sand, or stick my little head somewhere else. cause I need too. And this doomer attytude I've caught needs to go so I can have what I need: more sex and one day a family. In short, it was nice but I have to stop being a doomer and believe in nothing or something else that is more positive. To others my age here: do the same, we didn't cause this so we should just live til the end comes which is hopefully never. Rick Masters, out. BTW, my name comes from To Live and Die in LA from Willem DeFoe who is a master counterfeiter being pursued by the like of Tim Geithner and the Treasury. Get IT! IDK, maybe I'll change my mind but I can't take it anymore. No more doom and gloom please.

Commander Cody's picture


Don't know, but you'll probably be back.  ZeroHedge is an addiction.  Its also a medium for communication and a conduit for discourse outside normal propaganda channels (at least I hope it is, but heh, I'm not paranoid although someone is out to get me).  Filter the bullshit and ignore the hatemongers and the information here can help you through and be prepared.  Only you can decide what to do with the inputs.

slewie the pi-rat's picture

thanks for bein you, rickMasters!

i got into a similar dissonance a few months ago and re-examined what i saw economically and found:

the FED has a new job description!

that helped me understand why the gloom and doom wasn't precipitating correctly as in the beaker in the lab:  the FED stopped trying to "fix" everything and just got defensive and stability-minded and may finance the treasury pretty well from here; it appears the system is functiong at least minimally ok for now

the spending still needs to be addressed but the wheels are not gonna come off in the near future imo

i would still advise the required survival insurance for all:  easily-recognized US-minted PM coinage, plenty of grub and supplies, CASH, and as little c-party risk as is possible

last year we saw how the incremental $1 of QE LSAP was causing less than $1 of GDP and that means: stop!  and the FED stopped!

tyler has had it slightly wrong for 11 months, QE-wise and he still sees macro indications of a shit-storm a-plenty;  he has pretty good eyesight and thinking or we wouldn't be here, would we?

you?  you went with the group-think and the "we" party and now you're ready to stop? 

i fight the political operatives all the time here;  and thank you for addressing this today;  tyler wants to see what people think here, especially after the most recent re-designs of the site tended to open the joint up to political money and gang-banging operatives, but you and i don't hafta pay the bills here every month, do we?  and their money is just as good as yours or mine

tyler took a stand for rPaul and now he may be selling access.  it's his business, not mine or yours, and he and sac and others hafta eat, too

and your life is the only one you got

i thought the wheels were coming off in '71, but they didn't completely, and my life is kinda special to me in many ways, too, rick

you paid yer dues here and whatever you decide from here is gonna be fine;  it looks to me like the checks are gonna be in the mail for the foreseeable too, rick

don't despair about the numbers or the experts' calls;  bobJ doesn't make 10% of the sense you do, here today;  just live it!

epwpixieq-1's picture

After 10 years, you will be thankful that you had exposure to these type of ideas at the time when you were 30, they may save your well being in your later years. Of course with the assumption that you understand the fundamental moving forces in the economy, as this is not about gloom and doom, and have some luck making your investment decisions.

ZeroAvatar's picture

Aaaahhhh, apathy, very low on the vibrational level.  Don't give up.  You have to remain diligent.  If you capitulate, you've lost.


Oh, and if it's more sex you want, try telling them you're growing corn.  They can't wait to shed their skirts! /sarc

janus's picture

a rumbling growl is beginning to percolate from deep within the bilge of bile this bull-shit ceaslessly swells.  to put it another way, i'm feelin a tad indignant.

maybe i should just ignore it and wait for credit to rub its eyes and take a long and languid day-break-like leak all over this empire of fraud.  such is inevitable; and the piss-fest will soon ensue...but, in the mean-time, janus has some shit to say.

i agree with the pervasive sentiment i'm seein: that being a comprehensive recognition that this secular decline is not limited to any economic zone, nation nor asset class.  it's all gonna fall; with a crushing and all-encompassing blow.  but, for now, the fix is in...they're gonna drag as many common folk down with them as they possibly can.  retail is being bent over for the grand gang-rape; something these clumsy cooks have baked in the crap-cake a la 2012.

this entire rally is based on nothing...NOTHING...but the churlish smirks of a bunch of goddam euro apparachiks.  feeble fraus and fettucini-spined glib-masters are out en force, preening proudly while mindlessly proclaimin, 'salvation at last.'  but, and again, for the 20th time...nothing of any substance whatsoever.  well, except for the fact that yet another core nation has scrubbed its hands clean -- that'd be denmark.  but what should alarm any keen observer is the fact that denmark was not asked to commit to a thing...nothing.  they can see the signs; they want to sell at the top-tick of this lunacy -- and good for them.

in a world where the only meaningful barometer of economic health is the existential pulse of equties markets, such fluff -- no matter how flacid -- must be perpetually re-fluffed in the laughably desperate struggle for real-stuff to recouple with the centrally-mandated evah-upward float of all things...forever and ever, amen.  granted, this has been going on for a while; but all goings on must come to a sometimes most sour end.  and so it is.

the end is nigh.

know how i know?  well, i have latched onto a barometer of my own: faceberg.

i keep hearing how over-sold are american equities; how there's value-a-plenty bristling from endless rows of profits yet unreaped.  how PEs are at benchmark lows.  how -- and it seems everyone should know -- that the S&P is nature's way of reminding reason that rigor, disipline and industry don't matter at all...just take two SSRIs, load up on facebook, buy your silos on zynga, and just let us worry about your portfolio.  you know, the guys who've done such a bang-up job thus far.  they do, after all, program the algos that shuffle fraud across endless expanses of ocean at the blink of an eye.  it is they who, at 330 yesterday, sent markets streakin as preface to the putrifaction that was to be the 20th summit of somnambulists-sycophants.  

well, dunder-fucks, janus has but one message for ya:  get an eye-full of my giant cock and open wide thy mouth.  

let's get back to facebook.  this heap of steamin dreck is an evanescant flicker of uber-foolishness.  a fad...this and nothing more.  it is the myspace of our time and place; something so frail and tenuous that counts all its chickens in a coop of coolness, which, in this modern age, hops from hen to hen -- always with an eye for the next en.  what i mean to say is, it's days are numbered -- and the number is so small that i reckon any imbecile at any investment house could, if they applied themselves, count so high.  it is clear enough to anyone who's ever had commerce in that nest of inanity...i mean, really, facebook has become nothing more than a place where weary ole grandmas post their grocery lists and begonia pics.  how fuckin cool is that?  if you ask JPM, it's the future and present and never shall anything interrupt its march to total incorporation into every aspect of our lives.

but, methinks me sees some crumblin a comin...nevermind that for now -- let's peel back the onion a bit.

i'm not exagerating when i say that this stock has a fair market value (if, that is, the current PE stasis reflects accurate near-term valuations) of about 2 to 3 dollars per share.  but, then again, that number is based on FUTURE earnings estimates for 2014!?  are you fucking kidding?  sadly, no.  let's also consider the fact that silly things like 'the law of diminshing returns' have been tossed out with other slop intrinsic of fundamental analysis -- yes, facebook will continue to add users at the fixed rate forever (never-you-mind about the limits of population); and we're just to take their word for how many of these users are 'active'.  basically the ratings banks have said, 'it's worth this much cause we say so...okay!  if you have any questions, please implement our advice regarding the SSRIs, etc.  thank you...that is all.' 

but, beyond the fact that one of the saviest advertisers around (GM) pulled out entirely; i think it a bit odd that faceberg would put its ads up for auction...don't you?  well, if you knew anything about advertising this would raise some crimson-soaked flags in your mind.  oh, then there's that little issue about forcibly converting all users email address to their newly minted and most-desperate attempt at cordoning more eyes to facebook ad space.  

facebook and the incessant cheerleading regarding has become, at least for janus, emblematic of all that is wrong with our money-markets today.  i hope you enjoy your lil euro-crack rally, bitchez!  the bears are hungry; and they are clawing at your gate.  oh, there will be blood.  mark it well.

weak wittle ones on wall-street; you over-coddled cunts; you prancin fancy-boys; you have aroused the ire of men...the fun is ovah.  

we will break you and we will beat you...oh, and we will take everything of real value that you have.


did you think your superstition and song and dance would save you?

viddie well, little bruthas...viddy well.

the 3rd revelation,

janus (not finished yet)