No crystal ball but a 2014 roadmap

Kids, we learned a lot in 2013, what about 2014?

It once again gives me great pleasure to put pen to paper (more for my benefit than anything else) for 2014 predictions, with a suitable amount of tongue-in-cheek.

2013 predictions weren’t bad at all. Europe, US, buying panic to sell complacency, Yellen, IPO comebacks, Housing, demise of correlation trading, Arsenal even spent money on players (black swan event)! All attached….

Now for some 2014….

*2014 bull market continues
*Bernstein stock target prices for next 12 months (within coverage) points to SPX 1900. Remember we don’t value growth particularly well!
*Blue-sky trading of breakouts the most rewarding vs the mean to reversion value strategy.
*ZeroHedge articles via email continue to be buy signal of choice
*Taper happens causing bonds to re-price and the mkt discounts taper to ZERO quickly
*Interest rate plays dominate, CME, SCHW
*Consecutive down days in combination with panic tick levels remain terrific long entry points: Nick rule #1
*Dollar strength continues
*China growth not an issue of at least 7%. Lets face it, who can argue with the sitting Government?
*Growth over value
*House price increases in the suburbs
*Stocks that do not show leadership and disappoint on earnings, do not reward capital: *Underperformance from Funds in a bull market continues, but the gap gets plugged with an IPO market on fire
*SPX +15%
*IWM outperforms SPY by 8%
*Utilities still the ugly step-child of equities:
*US GDP accelerates to 4%
*Navigating Yellen commentary and actions is the banana-skin
*Fund flows become a very important marker for underlying bid for equities regardless of “valuation”
*Action over price continues to win

SPX looks like this for 2014!!!! With the giant swings caused by FED moves and talk….

Off the reservation calls:
*Arsenal win the league
*Obama cover of Time magazine with Headline “The Loved one I lost”
*Argentina win World Cup

*England retain the Ashes
*Wall Street confidence climbs again
*Philanthropy thrives
*US tax code goes 20% flat tax
*US Government signs off on $2trillion infrastructure spending bill
*Nobody sells their Bitcoins in the assumption it prices at $100,000, making it the currency for the privelaged
*TSLA gets a LOI from Toyota
*Jeter retires with guard of honour
Just for some context here were the 2013 predictions:US.....
*Another bull market move higher in SPX, 1560 acheivable with a following wind
*M&A pick-up, at some point the use of cash is better deployed than just
dividends, however it might be muted from the "special divi" craze of late.
*FED...well that's just boring now with QE infinity *Single stock moves do
better than SPX, correlations continue to decline.
*Buying panic and then selling into complacency works wonders for performance
*Value names continue to be value traps *Housing works.
*Wall Street makes a resounding comeback as Washington focus on growth
allowing funds to invest appropriately and the IPO market to regain a footing.
*3/4/5 Consecutive down days for SPX in conjunction with TICK index continues
to work as a buying of panic opportunity.
*Short squeezes become normal practice
*US BONDS give ground all year, without showing a danger of a yield spike.
*We seriously start to talk about inflation expectations again.
*Correlation trading continues to be a disastrous strategy, single stocks win
Some Macro....
*EURO/Dollar reverts to stronger dollar and weaker Euro, but this time is
deemed a POSITIVE for the markets as resolutions take hold!
*Europe slowly sees signs of strength as the weaker EUR benefits *Silver/Gold
ratio hints at going back to 20 given SILVER STRENGTH *China reverts to better
growth *Commodities remain well bid and defy the inevitable "topping out"
predictions.
*Japan. The stimulus vs monetisation debate continues to thrive with no
outcome.
General.....
*Obama getes "Man of the Year" award, for doing not very much at all!
*Geithner replaced by Corzine after evading all Court processes from MF Global
*Bernanke calls it a day. Yellen in line to the thrown, gets blown off course
by a Petraeus email scandal.
*BOE employs a NON-Brit as BOE Governor....oops, that's happened!
*The average Hedge Fund complains about liquidity when chasing stocks +5% on
the day!
*Arsenal spend some money on players
*Mets fall at first hurdle, whichever hurdle you deem is the first!
*Yankees sell A-Rod, win World Series with Jeter retiring in Game 7

Queen takes Pawn