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Every two weeks or so, Chandler Asset Protection analyzes the main asset classes and equity markets in charts to get a better sense of timing and risk-reward.

This will be our last  Markets in Charts before the year-end.

We wish our readers a Merry Christmas and Fantastic New Year.

Thank you for your trust and support !


Another negative week in global equities and a year that seems bound to close on a negative tone for the first time since 2015.

After having led the bull market, US equities are clearly falling much faster than the rest of the world. US investors psychology has clearly turned and US equities will underperform on the downside as well as on the upside.

World Indexes

MXWO – MSCI World Equity Index

Last week’s price action was truly ugly for the MSCI World Index as it broke through the support level and recorded a new 2018 low. The technical picture is bearish but the index is extremely oversold. A quick reversal next week would negate the negative signal. 

MXEF – MSCI Emerging Markets Index

The technical picture of the MSCI Emerging Market Index is far less negative and in fact a BUY signal is confirmed at the MACD.  Emerging Markets have bottomed out and are ready to rally after having corrected 50 % of their 2016 – 2018 advance.  BUY

MXAP – MSCI Asia Pacific Index

There again, last week’s price action was far less severe than the MSCI World illustrating the fact that the brunt of the correction is now in US equites and no longer in Asia.  Asian equities have bottomed out after their 50 % retracement of the 2016 -2018 bull phase, they are as oversold as they were in 2016 and the MACDs are forming a strong BUY signal.


USA – Dow Jones Industrial Index

Despite its scary move last week, the Dow Jones Industrial Index is testing a very strong support area with an additional downside limited to 23’500, or 2.5 % below last week’s close.  The Index is now oversold and all the over-extension of the past 2 years have been erased. WATCH

USA – Standard & Poor’s 500 Index

Scary ? yes, but teetering on the verge of a strong support at 2580 and the moving average at 2599. The SP500 is extremely oversold but failure to hold the current levels could send US equities in a tailspin. WATCH

USA – Nasdaq Composite Index

Very negative price action last week but we had all the signs of a final liquidation washout in technology stocks.  The Nasdaq Index is trading on a solid support and its long term moving average. It is more oversold than it was in 2016 and is due for a rebound. WATCH

USA – Russell 2000 Index

Is the Russell 2000 small cap index leading the way ? If so, Us equities are in for a rough patch ahead as the Russell 2000 fell through a major support area last week. Only a quick rebound could negate the very bearish outlook of US small caps. the index is extremely oversold and selling pressure is probably abating but some more downside is possible before a rebound.

Canada – TSX Index

Canadian Stocks are looking truly ugly ! They broke below the 15’000 support and there is not much to contain the fall on the downside. AVOID

Mexico – MEXBOL Index

Mexican stocks held well last week and are extremely oversold, trading back at levels not seen since 2014. TRADING BUY

Brazil –  IBOVESPA Index

Brazilian stocks are holding up very well considering the generalized doom and gloom. Last week’s price action was constructive and the relative outperformance is a positive sign for the future. HOLD


China – Shanghai Composite Index

The panicky state of the US stock market was clearly not shared in China despite the negative economic numbers that triggered the fall in the US on Friday. Chinese equities are extremely cheap and the downside is limited from here. The London – Shanghai Connect Link should open next week.  BUY

China – CSI 300 Index

There again, nothing to write home about ! The Shanghai Shenzhen 300 Index actually closed the week on a positive tone even if it gave back its gains of the beginning of the week. BUY

China  –  FT50 China Index 

China’s large cap index is holding well above the 11’000 level despite attempts by hedge funds to short the future and force a close below this important support.  BUY but keep an eye on the 11’000 support level

China –  HSCEI Index

Chinese H-shares closed the week in positive territory and still above the lows recorded in October. The technical picture remains constructive. At 7.6 x 2019 earnings, 1.02x Book value and 4.42 % dividend yield, Chinese H-shares are probably the cheapest equity market available today. . BUY

Hong Kong –  HANG SENG Index

Hiba Kong stocks closed the week in positive territory and above the broken downtrend. Hong Kong shares have corrected 50 % of their 2016 – 2018 advance and are due for a significant rebound with a target at 29’000. The MACDs are confirming their BUY signal. BUY

Taiwan  – TWSE Index

Taiwanese shares held well last weak but the technical configuration remains neutral. The index is highly oversold and selling pressure should normally be exhausted.  Trading BUY

Singapore – STI Index

Singaporean stocks held well last week and the MACDs have confirmed the BUY signal after a classical three legs bear market that retraced exactly 61.8 % of the 2016-2018 advance.  BUY

Indonesia – JCI Index

Indonesia is leading the way !   BUY

Malaysia – KLCI Index

Malaysia is not following Indonesia higher and last week’s test of the previous 2018 low was not a positive sign. However, the downside from here is limited to another 3 to 4 % before reaching the massive 1600 accumulation area of 2016.  The longer term picture is bleak, but at current levels, Malaysia is a Trading BUY

Thailand – SET Index

Last week’s price action was not good for Thailand and the index closed on an important support that must hold in the next two weeks. WATCH

The Philippines – PCOMP Index

The Philippines are holding well and we would use any weakness to accumulate the stock market of one of the fastest growing economies of the world.  Accumulate

Vietnam – VNI Index

Last week’s close marks an intermediate top and a re-test of the support at 899 is a strong possibility. HOLD

India – NIFTY Index

A strong move up for the Indian stock market last week as the Indian Central Bank was re-assured on inflation and vowed to reduced the debt to GDP from 68.5 % to 60 %. India, like Indonesia are showing the lead. BUY

Japan – Nikkei 225 Index

Japanese stocks are holding above an important support level and their long term moving average. Still, a break below the 21’000 level would be outright bearish at this stage. WATCH

Japan – TOPIX Index

Last week’s price action in the TOPIX index was not positive and a very quick rebound is needed next week to negate the negative signals generated last week. WATCH

Japan – JASDAQ Index

The Jasdaq Index had a very negative close last week and will probably continue to fall towards the 140 level which represents the 50 % retracement of the 2016 -2018 bull phase as well as the uptrend in place since 2014.  AVOID


Last week was very much about US and Canadian Markets falling sharply while the rest of the world held up quite well. We cannot rest showing this chart of the outperformance of US equities over US dollar denominated European equity ETFs over the past 11 years, or the entire 2008 – 2018 bull market.

This comparison takes into consideration both stock price and currency appreciation or depreciation.

Spain and Italy are particularly interesting, showing -31 % and -49 % performances over the period.

Europe – EuroStoxx 50 Index

European large caps closed the week in positive territory and are bouncing from very important support levels. The 3000 level should hold and serve as a base for a strong rebound.  We see last week’s breakdown as a final washout instead of a new major breakdown. Consequently, we expect to see a significant bounce in European stocks into Q1 with a target of 3280 into January. Trading BUY

The longer term chart also shows that we are now back at the crossing point of the long term triangle as well as the three moving averages. The EuroStoxx 50 trades at the same level it was at in 2004, 2010 and 2014 and it should provide the basis for a significant bounce from here.   

Germany – DAX Index

The Dax is more oversold than at any time since 2015 and last week’s move felt like capitulation the 21 % fall in the German index.  ACCUMULATE

France – CAC 40 Index

For the CAC as well as for most European equity markets, the positive weekly close of last week is a sign of relative strength and indicates that selling pressure has been exhausted. Accumulate

Switzerland – SMI Index

Swiss equities are treading on an important support but failed to close in negative territory last week. The 8’500 support should hold. HOLD

United Kingdom – FT 100 Index

British equities closed the week 0.99 % higher despite massive uncertainty on the fate of BREXIT. The failed coup against Theresa May gave some reasons to hope for a better deal and now the battle is on a second referendum. The technical picture is neutral at best and the downside limited to 6’500. AVOID for NOW

Spain – IBEX 35 Index

Spanish stocks ended the week higher and are trading on a significant support with the potential to make a double bottom. They are also trading in an important accumulation zone dating back to 2016. Accumulate

There again the long term chart shows that we are at crucial support level for Spanish stocks on the long term uptrend.

Italy – FT MIB 30 Index

Italian equities are cheap and a budgetary deal with the EU is around the corner. Last week’s price action confirms that selling pressure has all but disappeared and the MACDs are in the process of forming a BUY signal.

Portugal – PSI20 Index

Oversold, losing momentum on the downside, Portuguese stocks have lost 13 % of their value since July and are starting to look attractive. Accumulate

Greece – ASE Index

Greek stocks are building their base above the long term support at a Tim where the Greek economy is seriously getting back on its feet. BUY

Turkey – Titans 20 Index

Turkish stocks are rolling over and could be starting the next down leg of their bear market. AVOID

Russia – IMOEX Index

Russian stocks are in consolidation mode above the short term moving average. A renewed commodity cycle in 2019 would be positive for Russian equities. HOLD


The Yuan is rolling over and neither China nor the USA want a continuation of the Trade Wars. This week’s China Annual Economic conference and 40th anniversary of Deng XaioPing reforming of China may lay the foundation for a structural appreciation of the Chinese Yuan

DXY – US dollar Index

Panic in equity markets send the US dollar higher last week but the US currency is definitely rolling and this weeks FED meeting could be the trigger for the beginning of a period of weakness. SELL

CNY – Chinese Yuan

The Yuan is rolling over and neither China nor the USA want a continuation of the Trade Wars. This week’s China Annual Economic conference and 40th anniversary of Deng XaioPing reform of China may lay the foundation for a structural appreciation of the Chinese Yuan. STRONG BUY

JPY – Japanese Yen

The Yen is holding at 113.40 and although we see the US dollar weakening ahead, we do not see the Yen appreciating much from current levels. Japanese Bond yields have fallen back from 15bp to almost 0 in the past three weeks and interest rate differentials will make the Yen the borrowing currency of choice for risk-on modes. SELL

EUR – Euro

The EUR is consolidating above 1.13 and is failing to breach significantly that level despite massive short positions. This week’s FED meeting may provide the catalyst for short covering and the beginning of a new appreciation phase towards 1.1822. BUY

GBP – British Pound

Last week’s fall in the British Pound smacks of a trend-ending phenomenon even if the MACDs are delivering a new sell signal. The pound has been falling for seven weeks in a row and BREXIT’s uncertainty should be lifted soon. Trading BUY



Gold is in a positive configuration and last week’s pull back is a healthy sign in the uptrend. BUY

XAG – Silver

Silver’s basing is solid and prepares the ground for a strong advance in the future, similar to the one experienced in 2016. STRONG BUY

CL1 – Crude OIL

Crude’s weak rebound after last week OPEC agreement to cut production shows the inherent weakness of a commodity that has been manipulated for years. The trading patterns of 2008 and 2014 show that when Oil turns and speculators are no longer there to push its price higher, the dynamics of final supply / demand take the upper hand.

Short term BUY and Long term SELL

XPT – Platinum

Platinum is re-testing its 2018 lows. the making of a double bottom would be a very bullish sign. WATCH

KC1 – Coffee

Coffee is getting oversold again and the September low should hold.
Prepare to BUY

Crypto- Currencies

XBTUSD – Bitcoins

The entire mania about crypto-currencies has unravelled and Bitcoins are now down 84 % from where we sold them in December 2017, exactly a year ago.  The current 3200 level is a support level but frankly, it is really difficult to see who is going to step in to buy these pieces of codes.

In the ashes of the 2008 global financial crisis, a mysterious person or group of people going by the name Satoshi Nakamoto created Bitcoin.

Their aim was a more decentralized world, free from intervention by centralized institutions such as central banks.

How a tool is adapted generally reflects the principle, not the tool, however – and the irony Satoshi’s original libertarian followers might have to swallow is that one of the most powerful centralized institutions in the world, PBOC (People’s Bank of China) – China’s central bank – could be adopting Bitcoin’s underlying technology, blockchain, to digitalize the RMB.

As we advocated all along, The technology behind crypto-currencies is a valid technology but for the thing to become a currency, the power to raise taxes and guarantee the value of the code is needed.

The world first moved to paper money from gold and silver more than 1,000 years ago during China’s Song Dynasty.

The next revolution – from paper money to digital currency – will probably happen in China as well, realizing the nation’s critical goals, finally eliminating cash but with complex implications for global trade and economic order.

We stay short Bitcoins as their value is going to zero