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JG Savoldi

JG Savoldi
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  • RBS: Get Ready for the 'Cliff Edge' [View article]
    It's natural for people to not want to hear this type of commentary but that doesn't change the facts. None of us (not anyone at our company at least) want to see people out of work or a tough economy but the monetary and policy mistakes of the past are coming back to haunt us now. Our model has been predicting a global collapse since 2007 and we're setting up for the crash portion here during July and August. The biggest surprise--if we have this right--will be that the collapse will have already taken place prior to the more well publicized period of "danger" during October.
    Jun 30, 2010. 12:47 PM | 3 Likes Like |Link to Comment
  • 16 ETFs With Significant Eurozone Exposure [View article]
    Anyone interested in free access to our subscriber dashboard can follow us through the end of May. Is the stock market crashing already? What about tomorrow. Log-in to see what our model is telling us.
    May 20, 2010. 10:53 AM | Likes Like |Link to Comment
  • 16 ETFs With Significant Eurozone Exposure [View article]
    Our EDZ model is showing targets as high as 106 into the first week of June. The derivatives premium expansion should be incredible and that should create unexpectedly large moves to the upside for all of the 200/300% Ultra-short ETF's
    May 20, 2010. 10:44 AM | Likes Like |Link to Comment
  • Why Apple Will Accelerate [View article]
    Our model has a 45 dollar target on AAPL during the coming two years but a portion of this can be attributed to the coming crash in the major averages. We're also sticking with our GMCR target down at the 10 dollar level. The Nasdaq triggered a "capitulation sell signal" in our work at the April TOP and that implies too much speculative (leveraged) ownership in the Nasdaq in general. Short-term we continue to expect a crash into options expiration tomorrow w/ another wave down into the second week of June.
    May 20, 2010. 08:47 AM | 1 Like Like |Link to Comment
  • Threat of Hyperinflation: Real or Not? [View article]
    Our model is firmly in the deflation camp for the remainder of this year and into Q11 2011 and the stock indexes should soon reflect that if we have it right here. As the SPX drops into the air-pocket under the 1066 level (BAM Magnet) the plunge to the 944 (magnet) as well as the 842 (magnet) should be very rapid. Interestingly, the PUT/CALL ratio has a tendency to remain low during options expiration weeks and this would also be a very bearish dynamic this week as the market will be allowed to continue the crash with the majority remaining reluctant to dump CALLS and purchase PUTS.
    May 16, 2010. 09:48 AM | 1 Like Like |Link to Comment
  • Sentiment Overview: 'Flash Crash' Slows the Bulls [View article]
    The CBOE PUT/CALL Volume Ratio didn't exhibit the type of fear we would expect during the 1000 pt. plunge on May 6th and that confirms what our model is telling us. As we drop into the air-pocket under SPX 1066 (BAM Magnet) the plunge to the 944 (magnet) as well as the 842 (magnet) should be very rapid. Interestingly, the PUT/CALL ratio has a tendency to remain low during options expiration weeks and this would also be a very bearish dynamic this week as the market will be allowed to continue the crash with the majority remaining reluctant to dump CALLS and purchase PUTS.
    May 16, 2010. 09:39 AM | Likes Like |Link to Comment
  • What Caused Yesterday's Crash? [View article]
    Fear should rule the day for the remainder of this year according to our model and, unfortunately, most funds appear to have trapped themselves on the long-side during this multi-month low volume rise. The door is very small when the elephants try to exit simultaneously and that was pretty obvious during Thursday's 700pt 15 minute plunge. Our model has been calling for a crash and we believe it has started. Watch DOW 10232 as that level is the key battleground that opens the trap door according to the BAM-VI (our proprietary velocity indicator) The target remains SPX 529 during 2010.
    May 8, 2010. 02:29 PM | Likes Like |Link to Comment
  • BofA: 'Overweight Equities, Underweight Bonds' [View article]
    Bells ringing everywhere...
    Jan 15, 2010. 11:47 AM | Likes Like |Link to Comment
  • Bankruptcy gets nearer for Japan Airlines, in the form of a government-led turnaround plan (similar to Chapter 11) involving a ¥600B bridge loan, slashed services and a wipeout of existing shareholders. Lenders who favored a different workout are now expected to go with the government plan, which could be approved Tuesday.  [View news story]
    Amazing that Japan has been trying the same old governmental bailout strategies for two decades now. Also amazing that the USA seems to be following Japan's losing strategy.

    Those who fail to learn from history...
    Jan 8, 2010. 03:00 PM | 1 Like Like |Link to Comment
  • What Are the Best Hedge Funds Buying Now? [View article]
    Our model is suggesting the importance of focusing more on the macro as opposed to stock-specific approach as we move into year-end and, assuming the mkts follow our model, we're facing a quant-driven debacle as the USD Carry Trade unwinds violently and sends the US Dollar spiking higher with stocks, crude oil, gold etc. plunging lower. (We're sticking with our JPM target of 17 dollars as well)

    Our VIX model is confirming this view with relentless strength unfolding starting today and extending into March 2010. Our market crash call remains in place and we expect to see the SPX trade down to our 529 target into March 2010.
    Nov 20, 2009. 08:27 AM | 3 Likes Like |Link to Comment
  • Inflation and the Hierarchy of Needs [View article]
    Interesting that you'd write--"Finally, I am waiting for the Fed to explain in behavioral terms how businesses and consumers changed with each decrease in the fed funds rate. Was the change from 1% to 0% as effective as the change from 5% to 4%?"

    Behavioral analysis is what led to our belief that bubbles occur due to leverage not interest rate levels. Leverage is what creates monster bubbles in the first place because it is in essence the fuel that drives the wildfire of speculation. People have the ability to survive investment mistakes of all varieties so long as they have the "staying power" to stick with the position. It's only when outrageous leverage is employed--such as zero down interest only mortgages--that small decreases in the value of an asset can lead to a snow-ball effect and subsequent avalanche of defaults.

    It amazing me that we continue to talk about interest rate levels creating bubbles when leverage is the only "rope" investors have ever used to hang themselves.

    We first wrote about this dynamic in our 2006 report titled "How to Identify a Speculative Bubble." If you're interested in reading more about this idea you can get a free copy at our website.
    Oct 19, 2009. 07:57 AM | 6 Likes Like |Link to Comment
  • Reflation Supported by Stocks, Commodities and Oil [View article]
    Our model obviously disagrees with the idea of reflation.

    This is an epic deflationary spiral and the idea that global governments can turn it on a dime seems absurd. Even if we didn't have our model's message to guide us, we'd be bearish here based on simple common-sense.

    We've been wrong--didn't expect the latest higher-high in the stock averages, but we've been here before at extremes and we believe the BAM Model will, once again, guide us to the safe harbor while others are swept into the rocks.

    Only time will tell but if we're going to be correct on our call for a 22% October crash, the wheels will fall off immediately.

    Well thought out article though. Thanks for the perspective.
    Oct 16, 2009. 09:30 AM | 1 Like Like |Link to Comment
  • Clues from the Options Market [View article]
    Well done but possibly a bit complex for the average investor.

    We'd offer a more simple approach that might be worth thinking about.

    If the US stock market is going to continue tracking the BAM Model into the end of 2009/Q1 2010, (50% crash to SPX 529) the idea of selling covered calls would be a winning strategy.

    The US stock market is more extended and more dangerous in our work than it was when we triggered sell signals into the 2007 TOP.

    Possibly the biggest 'tell' here is in hearing acquaintances rationalize hanging onto stocks here even though they swore back in March to dump everything if the "market" could just bounce back to 10,000...
    Oct 16, 2009. 08:20 AM | 1 Like Like |Link to Comment
  • Market Outlook: Climbing Walls of Worry [View article]
    The reason we feel confident in our call for a 50% stock market crash over the coming 2-5 months is that all of our volatility models are telling us volatility is about to go vertical.

    The fundamentals seem to always be "just fine" right before the wheels come off, don't they?

    This set up reminds us of the summer of 2007 when the quant funds blew up for about a week--you remember don't you?--the bank stocks went straight up and the tech stocks went straight down.

    Our models see another Carry Trade dislocation coming. Too many bets against the US dollar Index. We're prepared for an unwinding.

    Another confirming signal is the incredibly bearish forecast we have for $JPM--a 17.70 target...
    Oct 5, 2009. 12:37 AM | 1 Like Like |Link to Comment
  • Paolo Pellegrini and the Conviction to Benefit from Market Dislocation [View article]
    I hate to bet against someone with a track record like Mr. Pellegrini but we have a strict discipline of following our model and it happens to be very bullish the US Dollar Index currently.

    Remember, fundamentals need not make sense at turning points--especially in a mkt as one-sided as the dollar. (not many bulls at this point)

    I remember clients mailing us back in the summer of 2007 when our model was very, very bullish the YEN as it was trading into it's lows.

    They all told me the fundamentals of the YEN were terrible and that although it might bounce, there was no reason for it to "spike higher" in a multi-month, multi-year rally" as we were forecasting.

    We all know how that story ended.

    We're long the US Dollar and expecting a sharp spike as it moves up into the 80-82 area during October/November.

    This also fits our call for a stock market crash.
    Oct 5, 2009. 12:22 AM | Likes Like |Link to Comment