Asset markets have been moving very quickly over the last 10 days or so. I’m afraid last week I had to focus on my own practice and therefore was unable to bring you a full technical release. This week I have therefore included last week’s missing reports and expanding the usual release to include various macro reports as many in-house analyst team’s have updated their forecasts and year end macro and micro projections. I’ve also included some intra market liquidity and allocation reports here as well.
We have seen volatility spike up and a consequence of this, from a purely technical money management perspective, will be to reduce allocation sizes ie leverage and increase hedges. These cross winds should reduce the directional certainty of the previous 20 months or so and the effects of this correction are likely to be felt for some time to come.
Here nyse margin:
Here Equity capital inflows which are negative again whereas bond inflows have surged:
Timing wise, last week produced a classic wash out in sentiment, volatility and price getting to our projected -10% target across major US indexes and more than this across some international indexes. And much more than this across several cyclical sectors inc oil services. The equity rebound has been as beautiful and swift as the declines were ugly and disorderly at times. Its been a good trading environment if you work on shorter timescales. The euro and commodities are still bouncing and the dollar basket has corrected a little. Fixed income surged but is now back to its prior range. The only trend to have broken over the last few weeks are equity trends and equity 200dmas which appears likely to be meaningful medium term. We are approaching the positive xmas seasonal period but prior to this some directional confusion should be expected.
During last week’s correct, one example of anecdotal technical weakness were the number of stocks making 52 week lows (US indexes) shot up to 5 year levels of weakness even though indexes were well off their 52 week low price levels. Its indicative of a classic “topping out” process. It seems very reasonable that once the post correction bounce is exhausted we will have a period of indecision, at the least, here, as above. Its easy to lose money in these periods taking what appears to be momentum moves only to get caught in “whipsaw” price action.
Without delay here the Swiss team with their latest:
And here last week’s AG report:
And here this week’s AG report:
And here cb’s Fitzpatrick with his update from last week:
And here with his latest:
Here GS provide their latest technical weekly comments & charts:
Note the bullish conviction level of 3 on the Shanghai. Asian markets, Japan aside have out performed during this correction.
CS provide their core views here:
Leading on to more technical views here:
And here
And here
And here the wealth team with their allocation shifts:
And here JP with their allocation shifts:
And here JP Caz with their equity recs:
And here JP with a good report on the liquidity implications of the correction:
Here a macro econ report from the team at JP:
And here some FX perspectives.
Firstly MS with their weekly:
Next up a couple of FX reports from JP:
And here Scotia with their FX cftc reports:
And here with their pm cftc report
And back to the indicators here Yardeni:
And here some macro reports from WF.
The baby boomers are retiring and the welfare and tax receipt implications of this are considered by WF. In our fiat system money supply growth is the real issue of these demographics I suggest.
And here WF on Singapore:
And here some useful comments and insights from the Danske team on the macro fx landscape.
We discuss on the forum pages as usual.
All the best
Rich