In this Issue
- THE CHART OF THE WEEK
- CURRENCIES
- COMMODITIES
- EQUITIES
- BONDS
CHART OF THE WEEK
CHF – SWISS FRANCS
Last week, the major break out of the long term triangle we expected in Swiss Francs took place sending a clearly bullish signal for the US dollar.
Almost every economic indicator points to a sharp slowdown in the world’s largest economy of the world and a subsequent fall in its inflation rate.
With nominal rates stuck at 2.25 – 2.5 %, US real interest rates will shoot up while Swiss, European and Japanese real rtes will remain negative.
The CHF technical break out is extremely important and should propel the CHF much lower. It announces similar break outs in the Japanese Yen and the Euro.
At -0.75 %, Swiss interest rates are the most negative in the world.
CURRENCIES
DXY – US Dollar INDEX
The DXY Index is holding firmly above 95 and is setting the stage for a break above 97.5. BUY.
EUR – Euro
Another weak weekly close for the Euro aft a succession of lower highs. The next stage is a sustained break below 1.12 SELL
JPY – Japanese Yen
The various charts of the pairs against the US dollar show a clear pattern towards a sharp breakout in the weeks to come. SELL
CNY – Chinese Yuan
The YUAN is consolidation sideways pending announcements on the Trade War front. BUY
GBP – Sterling Pound
GBP is Neutral between the BREXIT saga and a potential break out in the value of the US Dollar, but a sharp move is imminent. NEUTRAL
CAD – Canadian Dollar
The Canadian Dollar is on a weakening path. SELL
AUD – Australian Dollar
The Australian Dollar is rather positive for now, bouncing on a strong support at 0.70. A break below that level will send it tanking. NEUTRAL
NZD – New Zealand Dollar
The New Zealand Dollar is sending a clear SELL signal both in price terms and at the MACD level. SELL
RUB – Russian Ruble
The Russian Ruble is holding up well. BUY
TRY – Turkish Lira
The Turkish Lira is definitely on a negative trend. SELL
INR – Indian Rupee
The Indian Rupee is in an established Bear market. SELL
IDR – Indonesian Rupiah
The Indonesian Rupiah has been appreciating since August but may be reaching a stabilization level with a double top at current levels. A Break below the moving average would be clearly positive. NEUTRAL
COMMODITIES
CL1 – Crude Oil
Crude Oil is losing momentum on the upside after its 32 % rally this year. We do not have a confirmed SELL signal yet but we are starting to SHORT at current levels. REDUCE
HG1 – Copper
Copper is consolidating above the moving averages and although speculators are trying to SELL, the next move is up . BUY
XAU – Gold
Gold’s Bull market’s Bear phase is not over. DON’T BUY JUST YET
XAG – Silver
Silver’s Bull market’s Bear phase is not over. DON’T BUY JUST YET
XPT – Platinum
Platinum is at the beginning of a strong uptrend BUY
XPD – Palladium
Palladium is at the beginning of a strong downtrend. SELL
KC1 – Coffee
Coffee is bottoming out after a 6-years bear market. STRONG BUY
SB1 – Sugar
Sugar is at the beginning of a significant bull phase STRONG BUY
S 1 – Soybeans
Soybeans are consolidating pending news on the US – China Trade War outcome.ACCUMULATE
W 1 – Wheat
Wheat failed to climb above its long term moving average, triggering short sales. However, last month’s bottom is a strong reversal and should signal a double bottom or even a higher low very soon. BUY
C 1 – Corn
The stability of Corn prices over the past 6 years has been remarkable. BUY
LB1 – Lumber
Lumber is working out its bear market and we should be nearing an important double bottom soon. In the mean time, AVOID
EQUITIES
MXWO – MSCI World Index
World equity markets are overbought after their sharp rally of the beginning of the year. We are nearing an important resistance at 2200. REDUCE
MXEF – MSCI Emerging Markets Index
Emerging Markets are lagging behind the major markets.BUY
Americas
USA – Dow Jones Industrial Index
The US Equity market is way overbought and testing its 2018 all-time highs. SELL
USA – Standard & Poors’ 500
The US Equity market is way overbought and testing its 2018 all-time highs. SELL
USA – Nasdaq Composite Index
The US Equity market is way overbought and testing its 2018 all-time highs. SELL
USA – Russell 2000 Index
The US Small cap Russell 2000 index may be putting in a double top. It failed to hole above its moving average. AVOID
Canada – Toronto Stock Exchange Index
Canadian stocks are testing their 2016 uptrend, a trend that has become a resistance. SELL
Mexico – MEXBOL Index
Mexican Stocks are clearly positive BUY
Brazil – IBOV Index
Brazilian Stocks have Peaked. SELL
Argentina – MERVAL Index
Argentinian Stocks have not finished their consolidation. AVOID
Europe
Europe – EUROSTOXX 50 Index
Europe’s large cap index still has momentum but the 2016 uptrend will soon act as a resistance.HOLD
Europe – Europe Bloomberg 500 Index
The larger Bloomberg 500 European Index is attempting to break out of its long term triangle. HOLD
Germany – DAX 30 Index
Germany’s Dax 30 Index is attempting to break out of its long term triangle. HOLD
France – CAC 40 Index
France’s CAC 40 Index is attempting to break out of its long term triangle. HOLD
UK – FT 100 Index
UK’s FT 100 still has momentum but will soon reach a resistance level. REDUCE
Switzerland – SMI Index
Switzerland’s SMI is challenging its previous highs and may break out soon, particularly if the CHF depreciates as we expect . HOLD
Netherlands – AEX Index
The Netherlands Index still has momentum but will soon hit the 2016 uptrend resistance HOLD
Sweden – OMX Index
Sweden’s Index has strong momentum and may soon challenge its all-time highs. HOLD
Italy – FT MIB 30 Index
Italian shares have a strong momentum and have more mileage. HOLD
Spain – IBEX 35 Index
Spain has not delivered its full potential yet. STRONG BUY
Portugal – PSI 20 Index
Portugal’s close above the moving averages is a strong positive and there is still a lot of room for appreciation STRONG BUY
Greece – ASE Index
Greece is one of the cheapest markets in the investable universe and the catch-up from years of underperformance has only started. STRONG BUY
Russia – IMOEX Index
Russia remains on a solid uptrend for the time being and valuations are still undemanding. BUY
Turkey – DJ Titans 20 Index
Turkey’s stock market is trying to find a base but we would avoid it for now. AVOID
Middle East
Dubai – DFMGI Index
The Dubai stock market is powering ahead as investors are pondering whether the economic downturn is over or not. We are of the view that we have seen the worst. BUY
Saudi Arabia – TADAWUL Index
Saudi Arabia is on a strong upwards momentum. It is getting overbought but the momentum is strong. HOLD
Asia
China – CSI 300 Index
China is overbought but there is probably more mileage before the bull phase ends. HOLD
China – Shanghai Composite Index
China is overbought but there is probably more mileage before the bull phase ends. HOLD
China – Shenzhen Composite Index
Shenzhen stocks have been leading the rally but are losing momentum. HOLD
China – FT50 China A-Shares Index
The large cap A-shares Index is lagging behind the wider index. BUY
China – HSCEI H-Shares Index
The Hong Kong Listed H-Shares is lagging behind. BUY
Hong Kong – Hang Seng Index
The Hang Seng Index is starting to look overbought but there is some lineage left. HOLD
Taiwan – TWSE Index
Taiwanese Shares are clearly overbought and due for a pause. SELL
Korea – KOSPI Index
Positive configuration for Korean Shares. The close above the Moving average is positive BUY
Singapore – STI Index
Singapore shares are positive BUY
Indonesia – JCI Index
Indonesian shares are consolidating horizontally at their all-time high. HOLD
Malaysia – KLCI Index
Malaysian shares are the only new that keep on falling. They are now at a strong support level. lACCUMULATE
Thailand – SET Index
Positive configuration for Thai shares. BUY
Vietnam – VNI Index
Vietnamese shares are consolidating horizontally before their next advance. ACCUMULATE
Philippines – PCOMP Index
The Philippines Index holds at an important support level BUY
Japan – Nikkei 225 Index
A weakening of the Japanese Yen will be beneficial to Japanese stocks. BUY
Japan – Topix Index
The Topix index is less positive than the Nikkei 225. It is giving signs of rolling over.
India – NIFTY Index
Indian Shares are overbought at an all-time high. HOLD
India – India Small Cap Index
Inidan Small caps have a very positive configuration STRONG BUY
BONDS
USA – US Government 30 Year Bond Yield
US Government Bond Yields are testing the long term downtrend SELL
USA – US Government 10 Year Bond Yield
USA – Investment Grade Corporate Barclays Index
At 3.77 % average Yield, investors are not paid for credit risk in the Corporate bond market.SELL
USA – High Yield Corporate Barlays Index
The same applies to High Yield Corporate bonds SELL
Emerging Markets – US$ Bloomberg Barclays EM Index
The same applies to Emerging Markets Bonds SELL
Germany – Government 10 Year Bond Yield
At 0 % nominal returns, 10-Year German Government bonds are a SELL
Japan – Government 10 Year Bond Yield
There is no value in Japanese Government bonds yielding negative returns. SELL
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