I have no idea. Only your owners know for sure. It all depends upon who they want as the next President. If they want Romney, it would make sense to tank the market in October. If they want Obama then they would keep programming the supercomputers to keep buying through November. Based on political contributions, you would think they are favoring Romney. That would argue for them tanking the market in the next 9 weeks. What do you think?
WARNING, A HUGE SELL-OFF COULD BEGIN IN DAYS
One of the more bearish strategists out there has been Nomura’s Bob Janjuah.
In his July note, he reminded us that his call was unfolding. And he does so again in his note today:
“In terms of markets, the route map I set out in early April and which I affirmed in early June continues to play out extremely well. After correctly calling the late March/early April 1420 high in the S&P500, and also the early June (1270) low, we have also now fully captured the risk-on rally in stocks and credit that began in early June…”
So, what’s next?
Well, this is when things start to get ugly.
“I now think the correct thing to do – as I also said in April and June – is to prepare for a serious risk-off phase between August and November,” he reiterated. “Over the August to November period I am looking for the S&P500 to trade off down from around 1400…by 20% to 25%…to trade at or below the lows of 2011.”
He argues that the key drivers of this sell-off will be disappointment at next week’s Federal Reserve Jackson Hole speech and realization that the ECB won’t be be able to deliver on their promises.
In his note — titled Time For Action, Warning Over — Janjuah writes that the beginning of the big sell-off is imminent: “While in the extreme short term – days – we think more risk on is possible, we now feel comfortable in flipping from risk on to risk off and positioning for this major risk-off phase.”
However, he does hedge himself a bit:
“Just in case something genuinely new and unusual is happening – we note that the risk-on phase has extended for a few more days than we had originally forecast – and in the interests of prudence, my stop loss on the risk-off call effective immediately is a consecutive weekly close on the S&P500 at or above 1450.”