Weekly Technical Comments – 17th July14

This week we have a cut down tech view as the swiss team are traveling and they will be updating next Tuesday.

I’m also traveling today so I have to update this later today or tomorrow morning with third party content.

Some proprietary comments, technically the weakness of breadth and sentiment of put call ratios, leverage levels as well as internal sector balance is continuing to set the stage for, at the very least a mild correction here in equities.

Here a couple of breadth charts on the nas100 and the sp600 (smaller cap) index, both from the US.

Yesterday’s new higher high on the nadaq100 produced very disappointing breadth with the index. Part of this can be explained by Apple’s over weight inside the index but the pressure is certainly building week by week. The risks to this index are very clear should any of the larger cap stocks disappoint in some way.

And here the sp600 which may have already started her correction process.

Inside the commodities oil has traded place with the metals for now in terms of leading the commodities higher. Oil breaking through 100 us$ in a generally strong seasonal period is surprising but oil is a very volatile instrument which often displays stop hunting behavior. Unless the other correlating instruments & commodities join the breakdown im assuming its a corrective move following the successful move above the 104 level.

Here MS on the fx side..

ms-fxwkly-july15-14

Update – im afraid ive been really struggling on the tech/power/wifi side to update properly.

The point across instruments are that many are looking to make a new trend here. Decision point, which is often the case as the summer heat rises setting up for the sept direction.

Here CS with a macro fx report:

cs-macrofx-16-7-14

and here on a couple of specific pairs that are trend ready. My own book is short the euro vs the usd and long the aud vs the usd and i see no contradiction in this pair of positions though usually the pair are correlated.

cs-eurusd-17-7-14

cs-audusd-17-7-14

And here Nomura on the same trade.

numura-eurusd-17july14

And here on the usdjpy..

nom-usdjpy-17-7-14

Here ML on the earnings situation across US corporates with the focus on the majors.

ml-preearnings-16-7-14

ml-earnings-17-7-14

and here on allocations levels..

ml-allocations-17-7-14

Here AG with the regular, from last week.. Another due tomorrow..