Charting the Markets Mar 3, 2019

Every two weeks, we analyses the market in 58 charts or so, giving a sense of trends, turning points and timing.

EQUITIES

After a ten-week rally that took most indexes flying back to levels close to their previous all-time highs, global Equity market paused last week and are losing momentum.

China has been the star performer in the first two months of 2019 and rose another 7 % last week as domestic investors are rushing to buy cheap equities ahead of an expected resolution of the Trade War.

MSCI’s unexpected decision to increase the weighting of Chinese Equities in it s Emerging Markets’ indexes added some spice to an already hit market.

Overall, the general tone is that Equity markets – apart from China – are ready to make a pause or delivering outright sell signals.

We would not chase this rally further and time is right to keep high levels of cash and protect the performances achieved in the first two months of the year.

We expect a correction ton to unfold over the month of March as some disappointment and hardball playing may take place before final settlement of the Trade War.

There are a few specific exceptions such as Portugal, Greece, Vietnam and China, but for most part, the rest of the markets are clearly overbought.

World Indexes

MXWO – MSCI World Index – REDUCE

MXEF – MSCI Emerging Markets Index – REDUCE

MXAP – MSCI Asia Pacific All Countries Index – REDUCE

Americas

USA – Dow Jones Industrial Index – SELL

USA – Standard & Poor’s 500 Index – SELL

Canada – TSX Index – SELL

Mexico – MEXBOL Index SELL

Brazil – IBOV Index STRONG SELL

Europe

Europe – EUROSTOXX 50 Index – HOLD

UK – FT 100 Index – SELL

Germany – DAX 30 – HOLD

Switzerland – SMI Index. – STRONG SELL

France – CAC 40 Index – SELL

Italy – FTSE MIB 30 Index – HOLD

Spain – IBEX 35 Index – BUY

Portugal – PSI 20 Index – STRONG BUY

Greece – ASE Index – STRONG BUY

Sweden – OMX Index – SELL

Russia – IMOEX Index – SELL

Turkey – DJ Titans 20 Index – SELL

Middle East

Dubai – DFMGI Index – BUY

Saudi Arabia – TADAWUL Index – HOLD

Asia

Japan – Nikkei 225 Index – HOLD

Japan – TOPIX Index – HOLD

China – CSI 300 Index – REDUCE

China – Shanghai Composite Index – REDUCE

China – FT China 50 A -shares Index – HOLD

China – HSCEI H shares Index – REDUCE

Hong Kong – Hang Seng Index – REDUCE

Taiwan – TWSE Index – HOLD

Korea – KOSPI Index – SELL

Singapore – STI Index – SELL

Indonesia – JCI Index – SELL

Thailand – SET Index – SELL

Philipines – PCOMP Index – SELL

Vietnam – VNI Index – BUY

India – NIFTY Index – HOLD

New Zealand – NZ50 Index – HOLD

CURRENCIES

The currency market is sending mixed signals after a long period of uncertainty. The US dollar is giving signs that it wants to rise against the Japanese Yen and most emerging economies currencies.

However, the probability of a global equity correction is rather Dollar bearish and the consensus is way too positive on the US dollar for a lasting advance to materialize.

EUR – Euro

JPY – Japanese Yen

CNY – Chinese Yuan

GBP – British Pound

CAD – Canadian Dollar

TRY – Turkish Lira

RUB – Russian Ruble

ZAR – South African Rand

COMMODITIES

Our decision to sell precious metals last week was timely. Gold and Silver corrected sharply last week while Oil was putting a clearly bearish double top.