In this Issue

  • THE CHART OF THE WEEK
  • CURRENCIES
  • COMMODITIES
  • EQUITIES
  • BONDS

CHART OF THE WEEK

CHF – SWISS FRANCS

page2image2179695632

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

page3image2218887792

The DXY Index is holding firmly above 95 and is setting the stage for a break above 97.5. BUY.

EUR – Euro

page3image2218897904

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

page4image2180737712

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

page4image2218872416

The YUAN is consolidation sideways pending announcements on the Trade War front.  BUY

GBP – Sterling Pound

page5image2219007936

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

page5image2219022128

The Canadian Dollar is on a weakening path. SELL


AUD – Australian Dollar

page6image2219070656

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

page7image2180746656

The Russian Ruble is holding up well.  BUY

TRY – Turkish Lira

page7image2180752944

The Turkish Lira is definitely on a negative trend. SELL

INR – Indian Rupee

page8image2180809360

The Indian Rupee is in an established Bear market. SELL

IDR – Indonesian Rupiah

page8image2180841088

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

page9image2219128432

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

page9image2219145296

Copper is consolidating above the moving averages and although speculators are trying to SELL, the next move is up . BUY


XAU – Gold

page10image2219209936

Gold’s Bull market’s Bear phase is not over. DON’T BUY JUST YET

XAG – Silver

page10image2219217584

Silver’s Bull market’s Bear phase is not over. DON’T BUY JUST YET

XPT – Platinum

page11image2180637824

Platinum is at the beginning of a strong uptrend BUY

XPD – Palladium

page11image2180638176

Palladium is at the beginning of a strong downtrend. SELL

KC1 – Coffee

page12image2179946704

Coffee is bottoming out after a 6-years bear market. STRONG BUY

SB1 – Sugar

page12image2179954288

Sugar is at the beginning of a significant bull phase STRONG BUY

S 1 – Soybeans

page13image2180646864

Soybeans are consolidating pending news on the US – China Trade War outcome.ACCUMULATE

W 1 – Wheat

page13image2180667056

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

page14image2219256304

The stability of Corn prices over the past 6 years has been remarkable. BUY

LB1 – Lumber

page14image2219264880

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

page15image2177848656

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

page15image2180576128

Emerging Markets are lagging behind the major markets.BUY

Americas

USA – Dow Jones Industrial Index

page16image2218819856

The US Equity market is way overbought and testing its 2018 all-time highs.  SELL

USA – Standard & Poors’ 500

page16image2218830320

The US Equity market is way overbought and testing its 2018 all-time highs. SELL

USA – Nasdaq Composite Index

page17image2178413392

The US Equity market is way overbought and testing its 2018 all-time highs. SELL

USA – Russell 2000 Index

page17image2178423088

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

page18image2219855408

Canadian stocks are testing their 2016 uptrend, a trend that has become a resistance. SELL

Mexico – MEXBOL Index

page18image2219865648

Mexican Stocks are clearly positive BUY

Brazil – IBOV Index

page19image2219926816

Brazilian Stocks have Peaked. SELL

Argentina – MERVAL Index

page19image2219927168

Argentinian Stocks have not finished their consolidation.  AVOID

Europe

Europe – EUROSTOXX 50 Index

page20image2219327232

Europe’s large cap index still has momentum but the 2016 uptrend will soon act as a resistance.HOLD

Europe – Europe Bloomberg 500 Index

page20image2219339968

The larger Bloomberg 500 European Index is attempting to break out of its long term triangle. HOLD


Germany – DAX 30 Index

page21image2219968592

Germany’s Dax 30 Index is attempting to break out of its long term triangle. HOLD

France – CAC 40 Index

page21image2219978400

France’s CAC 40 Index is attempting to break out of its long term triangle. HOLD

UK – FT 100 Index

page22image2178502608

UK’s FT 100 still has momentum but will soon reach a resistance level.  REDUCE

Switzerland – SMI Index

page22image2178512512

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

page23image2178567424

The Netherlands Index still has momentum but will soon hit the 2016 uptrend resistance HOLD

Sweden – OMX Index

page23image2178577536

Sweden’s Index has strong momentum and may soon challenge its all-time highs. HOLD

Italy – FT MIB 30 Index

page24image2178630496

Italian shares have a strong momentum and have more mileage. HOLD

Spain – IBEX 35 Index

page24image2178639408

Spain has not delivered its full potential yet.  STRONG BUY

Portugal – PSI 20 Index

page25image2220051920

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

page25image2220052208

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

page26image2180738736

Russia remains on a solid uptrend for the time being and valuations are still undemanding.  BUY

Turkey – DJ Titans 20 Index

page26image2180863696

Turkey’s stock market is trying to find a base but we would avoid it for now. AVOID

Middle East

Dubai – DFMGI Index

page27image2180940304

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

page27image2180957632

Saudi Arabia is on a strong upwards momentum. It is getting overbought but the momentum is strong. HOLD


Asia

China – CSI 300 Index

page28image2220014912

China is overbought but there is probably more mileage before the bull phase ends. HOLD

China – Shanghai Composite Index

page28image2220015264

China is overbought but there is probably more mileage before the bull phase ends. HOLD


China – Shenzhen Composite Index

page29image2219383536

Shenzhen stocks have been leading the rally but are losing momentum. HOLD

China – FT50 China A-Shares Index

page29image2219393280

The large cap A-shares Index is lagging behind the wider index. BUY

China – HSCEI H-Shares Index

page30image2220893216

The Hong Kong Listed H-Shares is lagging behind. BUY

Hong Kong – Hang Seng Index

page30image2220901088

The Hang Seng Index is starting to look overbought but there is some lineage left.  HOLD

Taiwan – TWSE Index

page31image2220952000

Taiwanese Shares are clearly overbought and due for a pause. SELL

Korea – KOSPI Index

page31image2220960160

Positive configuration for Korean Shares. The close above the Moving average is positive BUY

Singapore – STI Index

page32image2219441136

Singapore shares are positive BUY

Indonesia – JCI Index

page32image2219446864

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

page33image2219501424

Thailand – SET Index

page33image2219501712

Positive configuration for Thai shares. BUY

Vietnam – VNI Index

page34image2219531472

Vietnamese shares are consolidating horizontally before their next advance. ACCUMULATE

Philippines – PCOMP Index

page34image2219541792

The Philippines Index holds at an important support level BUY

Japan – Nikkei 225 Index

page35image2220164256

A weakening of the Japanese Yen will be beneficial to Japanese stocks. BUY

Japan – Topix Index

page35image2220173280

The Topix index is less positive than the Nikkei 225. It is giving signs of rolling over.

India – NIFTY Index

page36image2220149472

Indian Shares are overbought at an all-time high. HOLD

India – India Small Cap Index

page36image2220216752

Inidan Small caps have a very positive configuration STRONG BUY

BONDS

USA – US Government 30 Year Bond Yield

page37image2178683600

US Government Bond Yields are testing the long term downtrend SELL

USA – US Government 10 Year Bond Yield


page37image2178693408

USA – Investment Grade Corporate Barclays Index

page38image2220282064

At 3.77 % average Yield, investors are not paid for credit risk in the Corporate bond market.SELL

USA – High Yield Corporate Barlays Index

page38image2220282352

The same applies to High Yield Corporate bonds SELL


Emerging Markets – US$ Bloomberg Barclays EM Index

page39image2178747328

The same applies to Emerging Markets Bonds SELL

Germany – Government 10 Year Bond Yield

page39image2178747616

At 0 % nominal returns, 10-Year German Government bonds are a  SELL

Japan – Government 10 Year Bond Yield

page40image2178783856

There is no value in Japanese Government bonds yielding negative returns. SELL