Photo: Bloomberg TV
Bob Janjuah, the bearish contributing strategist at Nomura, just provided an update to his September 18 note.In a nutshell, Janjuah has pulled the plug on his bearish tactical call that stocks would fall 20% to 25% this year.
From his note today:
“As discussed in that note, based on weekly closing levels at the end of last week, my stop loss on my risk-off “short S&P500‟ trade, initiated last month on 21 August at an S&P500 level of 1425, has been triggered.”
Nevertheless, Janjuah remains extremely negative on stocks, but he cautions investors about going short right now.
“From here, I would currently be flat or neutrally positioned. On a multi-month timeframe – and before the next major multi-quarter bear market phase starts and which I still expect to result in an 800 S&P – the upside in global equities is in my view pretty modest, around 10 %, based on underlying growth, debt and policymaker credibility concerns. However, until and unless the S&P index demonstrates a weekly close below 1450, I believe it is premature to go aggressively short risk – tactically at least – at this precise moment. That opportunity is unlikely to be more than a few months away, and could even present itself in the next fortnight or so. Data, news flow, price action/volumes/market leadership and abrupt changes in market sentiment and belief in policy/policymakers will be the drivers.”
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