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.
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. baminvestor.com/gold/
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
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.
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.
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.
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.
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.
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.
We're not long EURSEK as you say here. We NEVER called that w/ Twitter or elsewhere. We bought the USDSEK (big difference) very near the actual low and it did very, very well for us.
As for the lack of new calls on Twitter--the Twitter Campaign was a well publicized limited campaign and since we have paying subscribers, it's not fair to extend that campaign. Granted, stocks continued to make very marginal new highs after the 5% sell off following our crash call, but the model's unlikely bull call in wheat near the lows has worked out so well that it dwarfs the other calls that haven't flipped our way yet.
We've been through difficult periods before but we stick with the model and stay the course 100% of the time and, so far, that has proven very profitable with respect to big-picture forecasts.
It's interesting that when markets move against a fundamental call, the person making the ccall based on fundamentals is usually considered early by the heard but when the market moves against a call based on behavioral analysis, many outsiders consider us immediately "wrong."
My view is straight-forward. If we're making money for clients next week and next month based on this series of calls (short stocks, long bonds, long the USD, short crude oil, and long wheat), I'll consider the model's forecast a success.
I do agree however, that our timing has been less than stellar with respect to stocks, but we're guessing that once the crash kicks-off people will understand why we've been so incredibly bearish.
This is going to be an unmitigated disaster for the remainder of 2009 according to our stock model. I guess we'll know soon enough.
On Oct 14 03:07 AM jeremiah74 wrote:
> JG SAvoldi > > I've been following you on twitter for the last few days, just before > it went 'off the air'. I dont disagree with your conclusions. On > the methods I cant comment. > > I also think that just because you were wrong on these short term > calls doesnt mean your model cant work. I personally would only bury > it after following it for a longer time frame. Which I cant anymore > because its been discontinued > > We are at a turning point in the markets, I believe (may be wrong) > in times like these it becomes very difficult to forecast anything > because each buyer/seller's motivation start to diverge and what > the eventual vector of all the transactions will be is more unpredictable > than usual. > > I give you the benefit of the doubt, because if you have indeed > invested as much energy into your model as you claim, there ought > to be some results. > > Nevertheless, I would have been more impressed if a higher percentage > of your calls had worked recently. You sure caught the wheat move, > and its not just a mirror of the usual dollar selling + gold melt > up. Wheat moved more. But EURSEK is really pretty much at the lows, > maybe 1.5% off the lows. Thos dont make up for the missed call > you had on the dollar and equities. But again.. time will tell.
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. baminvestor.com
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.
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...
While BOHICA creates encyclopedic details of our so far incorrect S&P 500 "crash call" serious investors have made 7x returns on our forecast for a melt-up in the wheat market.
Let's get to the facts here.
Stocks broke sharply after our crash forecast and then SOME indexes made slightly higher highs this week. Bottom-line is that stocks have gone basically nowhere while our LONG wheat and the USDSEK positions have catapulted to the upside.
Our job--and we take it very seriously-- is to make/save money for paying clients and ourselves and we've been doing that.
Let's all check back on the BAM crash call once the month moves forward and lets also see if the SPX is trading at 529 later this year early next as our model is suggesting.
Put the shovel away...it's too early to bury our crash call.
RBS: Get Ready for the 'Cliff Edge' [View article]
16 ETFs With Significant Eurozone Exposure [View article]
16 ETFs With Significant Eurozone Exposure [View article]
Why Apple Will Accelerate [View article]
Threat of Hyperinflation: Real or Not? [View article]
Sentiment Overview: 'Flash Crash' Slows the Bulls [View article]
What Caused Yesterday's Crash? [View article]
BofA: 'Overweight Equities, Underweight Bonds' [View article]
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]
Those who fail to learn from history...
What Are the Best Hedge Funds Buying Now? [View article]
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.
"Stretching the Tape" [View instapost]
As for the lack of new calls on Twitter--the Twitter Campaign was a well publicized limited campaign and since we have paying subscribers, it's not fair to extend that campaign. Granted, stocks continued to make very marginal new highs after the 5% sell off following our crash call, but the model's unlikely bull call in wheat near the lows has worked out so well that it dwarfs the other calls that haven't flipped our way yet.
We've been through difficult periods before but we stick with the model and stay the course 100% of the time and, so far, that has proven very profitable with respect to big-picture forecasts.
It's interesting that when markets move against a fundamental call, the person making the ccall based on fundamentals is usually considered early by the heard but when the market moves against a call based on behavioral analysis, many outsiders consider us immediately "wrong."
My view is straight-forward. If we're making money for clients next week and next month based on this series of calls (short stocks, long bonds, long the USD, short crude oil, and long wheat), I'll consider the model's forecast a success.
I do agree however, that our timing has been less than stellar with respect to stocks, but we're guessing that once the crash kicks-off people will understand why we've been so incredibly bearish.
This is going to be an unmitigated disaster for the remainder of 2009 according to our stock model. I guess we'll know soon enough.
On Oct 14 03:07 AM jeremiah74 wrote:
> JG SAvoldi
>
> I've been following you on twitter for the last few days, just before
> it went 'off the air'. I dont disagree with your conclusions. On
> the methods I cant comment.
>
> I also think that just because you were wrong on these short term
> calls doesnt mean your model cant work. I personally would only bury
> it after following it for a longer time frame. Which I cant anymore
> because its been discontinued
>
> We are at a turning point in the markets, I believe (may be wrong)
> in times like these it becomes very difficult to forecast anything
> because each buyer/seller's motivation start to diverge and what
> the eventual vector of all the transactions will be is more unpredictable
> than usual.
>
> I give you the benefit of the doubt, because if you have indeed
> invested as much energy into your model as you claim, there ought
> to be some results.
>
> Nevertheless, I would have been more impressed if a higher percentage
> of your calls had worked recently. You sure caught the wheat move,
> and its not just a mirror of the usual dollar selling + gold melt
> up. Wheat moved more. But EURSEK is really pretty much at the lows,
> maybe 1.5% off the lows. Thos dont make up for the missed call
> you had on the dollar and equities. But again.. time will tell.
Inflation and the Hierarchy of Needs [View article]
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. baminvestor.com
Reflation Supported by Stocks, Commodities and Oil [View article]
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.
Clues from the Options Market [View article]
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...
"Stretching the Tape" [View instapost]
Let's get to the facts here.
Stocks broke sharply after our crash forecast and then SOME indexes made slightly higher highs this week. Bottom-line is that stocks have gone basically nowhere while our LONG wheat and the USDSEK positions have catapulted to the upside.
Our job--and we take it very seriously-- is to make/save money for paying clients and ourselves and we've been doing that.
Let's all check back on the BAM crash call once the month moves forward and lets also see if the SPX is trading at 529 later this year early next as our model is suggesting.
Put the shovel away...it's too early to bury our crash call.
JG Savoldi