Guys, i’m traveling at present but here in any case the latest reports.
Comments in the next few days.
Here the Swiss Team:
And here GS
And here Fitzpatrick:
And here CS:
And here RBC tech:
And here MS on fx:
And here RBC macro
We are very close to a major market turn.
All the best
Rich
Guys the latest report below.
Im in sync with the Swiss guys comments here below. I’m not aggressively short yet on any indexes although i do strongly suspect euro indexes have already seen their high water marks for the year. Sp500 im not so sure but the failure is extremely like to come on this next bounce would be my take.
I’d like to make one comment on volatility. There are two types of volatility in my book. There is a low volume algo generated volatility which tends to be whippy and knock directional players for 6. And then there is the high volume volatility that is super directional and often comes as a part of a multi month or year directional trend change. For my mind we are likely still in the former than the latter. Therefore be careful if you are playing this.
Here the Swiss team’s latest:
And here GS
And here RBC tech
And here JP on the macro:
And here :
And here SC fx
And here RBC on the macro:
And here OBC overnight inc china.
Rich
Last week the Swiss team took a well deserved holiday. Many market report teams are holiday so please keep this in mind.
First up here the latest from the guys.
The level of bearishness in the market is at such an elevated level its hard to go short using technical history as a guide, even though we are so close to record price highs.
Here Fitzpatrick making his macro case for rate rises.
This is an extremely US centric view here of economic micro data. The data is taken at face value, imo. Nonetheless should the Fed raise rates? Yes I absolutely agree with that call but the consequences on asset markets and therefore the consumption economy might be dramatic. Recall in 1977 when rates started rising GDP growth was also non existent. We live in extraordinary times.
And here GS, maintaining two equity short calls conviction 3.
And here an RBC seasonal chart pack. A timely reminder for us.
Lest we forget here a bullion tech update from Commerz, wiith some longer term charts also. 50% retracement of the bull trend taking her inline with the 1970s sell off in terms of retracement of that secular bull.
& here scotia with some levels and comment:
Watching this very closely here. Lets see how this last wave up fades. So many cheer leading stocks are falling through supports, eg Apple amongst others. For stock pickers its truly been a battering market over the last year. Index players have scored much better. Its also worth noting the churn inside the indexes has been dramatic. It just doesn’t pay to be a stock picker in this environment. Earnings have recently been not far short of disastrous. Even the success story of the German Autos has lost their shine with BMW sales and net down due to Asia consumer demand rolling over. China with a pmi at 50 now. A whisker from contraction (officially). The reality doubtless much worse.
We are close guys to a deep correction in US markets. Many world indexes started their correction a while ago.
Some useful correlation charts here care of Yardeni. Seeing the wood for the trees.
The question will soon become what do you buy? Cyclicals or defensives. Income, assuming interest rates stay lower for longer or growth? The new normal or the great reflation theme? This will soon be the next consideration once this bear commences.
All the best
Rich
p.s. as an allocator to the sreits im watching the sector carefully here as the 10yr sgs yield rises.
I like c61u or cct at around these levels.
Guys Ive just received this and I realize many here are market timing these asset markets on the short term. I post this up in a timely manner here so as to not delay participants getting this perspective. Asset markets are getting interesting here is my immediate comment. I have a great deal of reports to post up here so please come back same time tomorrow and a catch up update will be posted here.
In the mean time here the Swiss team’s latest:
And here a Fitzpatrick catchup:
& again:
& finally this week here:
And here GS.. Posting the first equity short high conviction rating for a long while, short Nik225, for now :
& this week here:
And here SG with a useful tech report:
And here RBC with their tech report:
And here their macro reports:
All the best
Rich
This post will be updated tomorrow. I believe the guys are spot on that this there are clear technical signals that this is building into a decent technical correction later in the summer. There fore that this price “bounce” is the perfect long portfolio selling opportunity.
Here the Swiss team’s latest report:
More tomorrow..
All the best
Rich
Volatility rising and widening across asset classes internationally now.
Its all part of the normal historic trend of rising volatility pre a trend change, imo. I wouldn’t go aggressively short yet but it was correct to move to a high cash level as of a month or so ago.
Here a few updates:
Firstly GS:
Few high conviction trades but interestingly with a seasonal play (long) on the Soybeans. How long will it be before we see the first high conviction short trades on equities from GS?
Secondly Yardeni. Here a large update of the various Yardeni briefings:
& again as an update:
Here on equities:
And here on Corp profits:
And here on bullbear ratios:
And here on Gold:
And here the latest CFTC.
The dollar looks cheap to me technically and macro wise around these levels given price and positioning. Parity with the euro seems very reasonable to me in the near term. On the longer term the less periphery participants there are in the euro the better (in terms of making for a higher euro). On the longer term im becoming bullish the euro but in a year’s time or so. Near and medium term expect the lows to be tested (and likely surpassed, as a high probability).
And here
And here RB with a big tech report:
And here the usual macro report:
All the best
Rich
We are in the final stages of this 6 year bull market. Europe appears to have already set her highs. World indexes also appear to have topped out. The wild card is the US where the Fed continues to talk rising rates and pipeline ever improving data. The US$ is at her supports and on a technical basis appears a buy. I am long US$ cash at present as well as gold which sit as strange mutual longs in the account. No matter. As correlation ratios between gold and everything are so low i have no problem holding this historically off setting position.
As we are in striking distance of the end of Q2 its time to review performance. In terms of personal ratios of return on capital for the year on the world wide macro fund i’m back to 15.5% for the calender year from an April high of 18.5%. The euro has strengthened and the last wave of euro equity rises was weaker than anticipated. Its steady as she goes.
A glass half empty view would be i’ve worked for several months for a negative return, in spite of strong divis and fx day trading. The macro trades missed were the Nikkie and JPY weakness which did appear a “tap in”. I instead chose to shoot for renewed euro weakness and euro equity longs. The trade worked but in the end less well than the second wave of jpy weakness and Nikkei strength.
FX day trading has been a net contributor so the numbers above would have been worse otherwise. A glass half full perspective would be that a 15.5% return is about 20 times most average “dm” ten year rates. If the performance continued for the rest of the year I’d achieve 31%. That would be the best annual personal return in 15 years. Lets see.
As summer has truly arrived here in the Balearic islands i’ve called time on the FX day trading activity until September. If the three rules to property investing are location location location the three rules for fx trading are discipline discipline discipline. You either commit to the practice 101% or better not at all.
Here below the Swiss team’s latest comments:
Note the team are on holiday next week. I notice so is Fitzpatrick so I may take the opportunity not to release an update next week or, depending on events in the next week, issue a cut down release.
Here GS with a new conviction three rating long trade on the Hong Kong Index.
Recall their trade rec is not a forecast of the future. It is simply a trade rec. If the trade fails you get out but for technical probability reasons the trade is set up.
And here Fitzpatrick with his latest take on the markets.
Note the 7.2% correction in the US$. And macro wise we have the Grexit underway with capital controls already in place, surely an end game milestone firmly in place. Given the ECB’s relative slow expansion of balance sheet vs the BOJ, FED’s and BOE’s its a fair assumption that any excuse to expand money supply to “smooth” volatility in the markets will be seized on by the ECB. Whether now is the positional entry as Fitzpatrick’s chart’s suggest or later at around the 1.22 mark is a matter for each trader to decide and i suggest a matter of setup and stops.
Finally I notice the bulletin boards are a little quiet. I assume participants here are, like me, buying a little time waiting for positional direction here and enjoying the summer. Direction and volatility is certainly coming in my opinion. Better to be patient here and take the obvious trades when direction emerges.
Here RBC on the macro
All the best guys
Rich
Equities are bouncing off some key levels. Europe is seeing high volatility as speculators look to hedge euro weakness and the grexit issue comes and goes. Technically a corrective bounce aside unless we see a reversal in the multi month technicals we should see many indexes fail to achieve higher highs here to confirm a coming correction. For my own book i’m now holding more cash than ive held for several years. Not as euros, I add. On the grexit issue macro wise, as the private sector holds very little Greek credit the contagion issue is off the table. Few cds notes have been issued in the last few years on a grexit. The credit has been socialized by the imf and ecb effectively. The losses will accrue to the long suffering European middle classes their fore and not to the banking sector. Thank your great leaders for their wisdom in this respect, should Greece default.
Here without delay the Swiss team’s latest:
And here Fitzpatrick’s latest:
and here GS
More to come when im back on dry land later today or early tomorrow.
Here a great tech report making a lot of tech sense from LCM:
Here MS with their regular weekly fx strat.
Cheers Rich
Here below the latest update from the Swiss team and others:
And here Fitzpatrick:
And here the stock tech analysis care of Ub..
More to come
Rich
The bond markets are continuing to drive this weakness in risk asset markets here. Volatility is rising considerably across bond and equity markets though particularly in non US markets. The Sp500 and other US indexes still show as many technical signs of a continuation as opposed to any trend change move, for now. European markets have been the weakest link once again recently and having liquidated all euro and uk equities a 6 or so trading sessions ago Ive short term reentered on yesterday’s weakness across German and UK indexes playing a corrective bounce rather than expecting new highs from these indexes.
We are very fast approaching now a summer “sell off” window. Whether we pass through this window will be greatly driven by bond prices. The 30yr treasury over 3.6% would be a lead as Fitzpatrick points out below.
Without delay here the swiss and many other reports:
And here UB with a closer price look at some key mm assets. Id like to imagine they are correct on where we are in this cycle though i’m more inclined towards the “Swiss” cyclical roadmaps:
And here Fitzpatrick with his heavy bond analysis:
And here GS (One high conviction trade, they are not shouting to long equities here)
And her, lest we forget, a cyclical analysis of the commodities. The 2011 bear market continues for now but the asset class appears to be basing as rates have scored a trend change. On any mm weakness, strategically, the allocation needs review given the bond issue.
And here another tech view.
And here RB with their macro view:
It could be a long hot summer this. If we do see a step change in volatility its going to be very interesting how participants handle the issue in terms of risk management. Leverage levels and therefore global money supply could react very badly to a step change in volatility. That, if seen, will feed on itself.
All the best
Richard
FX markets are once again the scene of extreme volatility which is feeding negatively into European stock prices. We have many cross winds here from technical non confirmations of the recent highs to currency confusion and increasing bond volatility. Ftse100 has dropped below her multi month uptrend line support which is a bearish and needs to reverse quickly here. US markets, by comparison, continue to display ultra low volatility.
Here the Swiss team’s latest
Many more reports to come.
Here the end of last week’s update from Fitzpatrick.
The Dow transports price issue noted last week but she’s moved even lower which historically an important signal.
And here GS:
They pretty much nailed the eurgbp trade on the near term target.
Here some macro trade recommendations from CS, inc the euro banks.
And an FX update from CS sticking with the US$ theme.
And here their global FX update broadening the trade targets:
And here bringing it all together an excellent update from RBC:
I hope you have locked in at least some of the year’s gains here. Or have option positions to cover the risks. This bull market is stalling. Capital has increasingly limited options on where to flow (still no correlations to gold working here, even today thursday by the way) that’s usually a good signal of volatility and confusion to come. The bull has not been dealt a hammer blow quite yet so its tighten up on levels, cut all leverage and hold a few puts to the downside for me. We see whats next a long slow summer would suit me just fine.
All the best
Rich
Contrary to what many market pundits have been writing this bull market lives on and is moving higher, for now. There are all sorts of technical and fundamental issues with these new highs but we are paid on price and price is showing that another leg albeit on low momentum is in progress here.
I am on a boat in the med right now so wifi connection has been a problem the last 24hrs or so. Comments are therefore a little tricky right now but the summary from me would be equity markets are a hold as is the US$ for a continuation of the major trends. The macro issues occurring in Greece need to get resolved in the next week or so now. Policy makers will want to kick that can down the road but the road is getting ever shorter. Historically central bankers and policy makers have to mask currency events from the market for obvious capital related reasons. I would therefore treat any good news stories related to the Grexit issue with a good deal of skepticism for now.
Without more delay here the Swiss team’s latest:
Here Fitzpatrick’s comments from last friday:
And here ML:
I’ll update later today. Apologies again for the small delay due to nautical issues.
All the best
Rich