Another week roles by with more pain on the commodity side and more juice on the equity side with a new breakout in several Asian indexes playing the mean reversion catch up, though a long way to run to close the gap.
Unfortunately i’m on a boat in the Ocean traveling and so I post this quickly here whilst I have signal before I lose sight of land again.
My personal book close to new record highs but not there as yet due to the commodities. I correctly have been light on this side but apparently not light enough to keep things moving forward. No change to the allocation on this side as we are at supports and more. I want to see how the bounce works here before changing anything. Equities wise there is still an awful lot of bearishness out there in sentiment. Although breadth on some indexes is weaker than ideal on many it is very strong. (I’m not comfortable to draw the same conclusion as the swiss team on the rus2000 breadth issue. The new breakout could be false but its not on weak breadth to mean breadth for such moves. Ok vs Nov breadth agreed but vs log term average breadth for breakouts she is fine and given inside a huge wave five and inc other indexes good breadth – go long in my practice).
Tactical moves aside there appears plenty in the tank here for the equities. The reflation trade damaged but not out for the count yet, in my view. Hence i’m willing to give the commodities a chance yet.
Firstly the Swiss team:
And here Fitzpatrick:
All I have time for right now but this weekend i may update this post with a v2.
All the best
Rich