Correction to text... sorry

Of course…..and important…

 

The section…. I firmly believe Asia leads DM markets… should say further down..

 

Is EXACTLY what we should NOT do…. I my mistake left out NOT.. but I think meaning is clear anyhow..

 

From: Steen Jakobsen (SJN)
Sent: 24. februar 2016 11:01
Subject: Macro forewarning, forearming is half the Victory - Why March could get nasty for risk on

 

I have a number of timing and cyclical indicators pointing to a nasty March and it looks like we are still on plan to see low end of March/April:

 

 

Fed remains relative hawkish vis-à-vis the slow-down in US growth potential, international monetary conditions and US$ & energy impact on earnings – latest example being Vice-chairman Stanley Fischer speech last night: LINK

 

The US$ seems unable to weaken from here despite clear momentum turn (Euro looks offered now…) – The Brexit focus combined with refugees and renewed Club Med trouble (Greece needs new money by May, Portugal turning into political farce w. rising rates) is carrying EUR lower. John Hardy, our brilliant FX Strategist see Euro losing momentum (and hence US$ gaining) – Make no mistake: Stronger US$ will translate to RISK-OFF in EVERY single asset class through killing commodity stability, lowering investment and reducing US earnings….

 

 

 

 

Two leading FX pairs : GBP$ and USDJPY…..have sold of dramatically. The Canary in the coal mine? I think so….JPY is go to RISK-OFF currency, particularly because of Bank of Japan evidently failing model of low and negative interest rates. Banking stocks is down +20% since negative yield introduced – TWENTY PERCENT…. This is what is coming to European banks (& later US banks)      GBP is offered and for good reason as I wrote in: What Brexit really means  - Uncertainty is the markets worst enemy and there is plenty to come from the UK – again the bigger casualty could be EUR and EU……  Now we have fully two tiered Europe…..

 

Topix Japan Banking Index-  DOWN 46% since peak post Abenomics!!!  (Remember all crisis comes from banking – and most crisis' starts in Japan in last 40 years!)

 

Comment: We have lost most if not all of the "gain" from Abe-nomics!                           

 

 

I have been allowed to forward my friend Rick Atkinson time-series analysis of the USDJPY which I asked him to do… it's not for the fainthearted by the way: Rick sees USDJPY in sub 50 region (and he has been excellent in timing other markets…..) – I will provide full detailed in Steen's Chronicle Special tomorrow called:  Japan leads world into trouble

 

 

GBP is under severe pressure… lowest since… 2008/2009……..

 

 

 

 

One the market best timers: Tom McClellan has an interesting chart for you:

 

Source: McClellan Financial Publications: McClellan Market Report

 

 

The "only" solution or neutralizer could be the G-20 in Shanghai but as it seems even the participants is pessimistic on achieving anything in the world of World Bank President Kim: "There is a lot of uncertainty; there is a lot of instability and fluctuations in global markets," he said. "But I don't think we're at a point where you are going to see some sort of concerted, focused action in one sector or another." (Source: Bloomberg LLP – link above)

 

 

I firmly believe Asia leads DM markets – China through growth and demand, and Japan by having the "model not follow" – in other words Japan is leading us down the wrong path and the "solutions in Japan" is obvious for everyone now is not working….. demographics, lack of productivity and most important an insistence on non-immigration and female participation in work force is EXCATLY what we should do, but what ECB is doing on monetary policy and what Cameron and EU is doing on immigration. We are simply NOT addressing the mal-investment and insist on being non-productive with an incentive structure which increasingly is penalizing the saver, the investor, and anyone how is trying to do their best.

 

March could be a critical month in monetary policy – I have declared the CENTRAL BANK planning dead last few weeks, evidence and now price actions support this.

 

Strategy:

 

My model – price based – is short GBPUSD, DAX, S&P, USDJPY, GBPJPY, and AUDJPY…… bought Bunds yesterday and very close to triggering short commodities – all a reflection of my old theme: The US$ is everything…… and with Fed insisting on being hawkish, slightly rising wage costs and EU is two-tiers I don't really see a lot of good things for the next 40 days, but then again I have been wrong many times before, but consider yourselves "forewarned"…. Forewarned, forearmed; to be prepared is half the victory – Miguel de Cervantes

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