Every two weeks, we analyses the market in 58 charts or so, giving a sense of trends, turning points and timing.
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.
MXWO – MSCI World Index – REDUCE
MXEF – MSCI Emerging Markets Index – REDUCE
MXAP – MSCI Asia Pacific All Countries Index – REDUCE
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 – 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
Dubai – DFMGI Index – BUY
Saudi Arabia – TADAWUL Index – HOLD
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
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
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.