Uber Bear Sees S&P at 800, Just Not Yet

Bob Janjuah, the bearish contributing strategist at Nomura in London, has long predicted the S&P 500 index will head towards 800, a level not seen since the aftermath of the collapse of Lehman Brothers. With the S&P 500 closing on Monday at 1,456, Janjuah has been forced to review his timing.
"My stop loss on my risk-off 'short S&P 500' trade, initiated on 21 August at an S&P 500 level of 1425, has been triggered," said Janjuah in a research note in which he outlined why he is still a long-term bear.
"It was extremely informative to see that post the QE-infinity announcement, which drove the S&P above 1,450 on the day of the Fed action on 13 September, and after an opening high of 1,475 on 14 September, the S&P sold off and got down to a 1,450 low last week! And then - confirming that 1,450 was an important level, and is now a critical pivot point for the S&P - mutedly bullish price action on last Friday activated the stop loss," he wrote.
Given underlying concerns over growth, debt and policymakers' phlegmatic reaction to the debt crisis, Janjuah believes any upside from here will be limited to a 10 percent gain. He stands by his 800 call.
"Until and unless the S&P 500 index (^GSPC) demonstrates a weekly close below 1,450, I believe it is premature to go aggressively short risk - tactically at least - at this precise moment," said Janjuah, who believes that could happen with months, or even weeks.
"The important message now is to accept that, in my view, risk assets are in a bubble, which of course can extend, but which can reverse sharply and suddenly. Up here, 'valuation metrics' are not going to help much." Janjuah believes 10 percent to 15 percent losses for equities could come in a "heartbeat."

U.S. money managers fear fiscal cliff over weak global growth

FROM USA TODAY:  NEW YORK -- Japan's main stock market hit a four-month high Wednesday after the country's central bank eased monetary policy to shore up fragile economic growth, but the positive momentum ground to a halt in Europe.

The Bank of Japan said it was increasing its asset purchasing fund to 55 trillion yen ($700 billion) from 45 trillion yen to counter the strength of the Japanese currency. A strong yen makes it more difficult for Japanese companies to compete in international markets.

The Bank of Japan's move comes just days after the Federal Reserve revealed it will purchase an average of $40 billion a month in mortgage-backed securities until the U.S. economy shows significant improvement. The Fed's goal is to lower long-term interest rates and encourage more borrowing and spending. The Fed also said it plans to keep its benchmark short-term interest rate near zero until mid-2015.

Stock markets, which tend to respond favorably to actions targeting economic growth, rallied sharply last week following the Fed's announcement. However, Wednesday, outside of Asia, where Japan's Nikkei 225 stock index rose 1.2% to 9,232.21, its highest close in more than four months, the response to the BoJ move has been far more modest.

"Perhaps we are seeing investors suffering from a bout of central bank fatigue, or perhaps it is a dawning realization that, even with policymakers dispensing cash left, right and center, there is still a slowing global economy to deal with," said Chris Beauchamp, market analyst at IG Index.

And it's not the biggest worry, according to the September Bank of America Merrill Lynch's Fund Manager Survey. For the first time in 18 months, not even Europe's debt crisis is the No. 1 "tail risk" that worry global money managers. (A tail risk is a rare event that could cause stocks to suffer a disproportionate drop.)

The new megarisk is the looming fiscal cliff in the U.S., according to the survey. The realignment in the pecking order of Wall Street anxieties serves as a warning to Main Street investors wondering what could trip up their investment portfolios at a time when stocks are as high as they've been in almost five years.

The fiscal cliff is a potential growth-crimping one-two punch of rising taxes and government spending cuts set to kick in Jan. 1 unless Congress acts to avoid it. The Congressional Budget Office says the U.S. economy will suffer a recession in 2013 if lawmakers fail to act.

In the September poll, 33% of money managers, who invest $681 billion for clients, said the eurozone's debt crisis is their top fear, down from 48% in August. Eclipsing Europe and ascending to the No. 1 global fear was the fiscal cliff, which got a 35% vote.

Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research, says, "The upcoming election is putting these fears into sharper focus."

In the short term, investors likely will focus on government and private data that shows whether the economy is gaining strength. On Wednesday, the main piece of economic data out of the U.S. are reports on new starts for residential housing and existing home sales figures.

Ray Dalio- Cautious words

FED launches QE3!!!!!!!!!!!!!!

Information received since the Federal Open Market Committee met in August suggests that economic activity has continued to expand at a moderate pace in recent months. Growth in employment has been slow, and the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment appears to have slowed. The housing sector has shown some further signs of improvement, albeit from a depressed level. Inflation has been subdued, although the prices of some key commodities have increased recently. Longer-term inflation expectations have remained stable. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective. To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative. The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases. To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who opposed additional asset purchases and preferred to omit the description of the time period over which exceptionally low levels for the federal funds rate are likely to be warranted.

FED-

FED looks like they pumping up stuff- QE3!!!! WoW- We are doomed without the FED

ATHN

This looks like it wants to tag $100. With the FED decision @ 12:30 I doubt we move much till then.

IPHONE!!!!!!

Been so busy over the last week I missed the hype on the release announcement of the new Iphone which is happening today. Everyone knows I am a APPLE Guy but that is one device I have never known from them. A matter of fact I am a HUGE android fan and I just got the new Galaxy S3 and think it is way better than my previous HTC Thunderbolt. I am interested to see what the new IPhone has but whatever it has or don't I can predict it will oversell its previous editions just on the basis that it will now be 4G LTE compatible with VERIZON.