Macro Extremes (week ending April 23, 2021)

The following assets (on a weekly timeframe) registered an Overbought reading or traded more than 2.5 standard deviations above its rolling mean.



Extremes “above” the Mean (at least 2.5 standard deviations)

Coffee

Wheat

Ripple (XRP)

ASX 200 Index



Overbought (RSI > 70)

Canadian 10 year bond yields (for 10th consecutive weeks)

The Commodities Indices (the CRB and Bloomberg’s)

Iron Ore (2 consecutive weeks)

Aluminium (for 9th consecutive weeks)

Copper (for 19th consecutive weeks)

Lean Hogs (for the 10th consecutive week and its highest price since September 2014)

Soybeans (for the 7th consecutive week)

S&P 500 Index (for the 3rd consecutive week)

Dow Jones Industrial Average (for the 3rd consecutive week)

S&P Mid Cap 400 (7th consecutive week)

U.S. KBW Banking Index (8th consecutive week)

Nasdaq Transportation Index  (7th consecutive week)

Dow Jones Transport Index (7th consecutive week)

Sweden’s OMX 30 Index (7th consecutive week)

South Korea’s KOSPI Index

Ethereum



The Quinella – Both Overbought and Traded at > 2.5 standard deviations above the weekly mean)

Corn (for the 20th consecutive week & trading 70% above its 200 Week Moving Average)

Lumber (having risen 31% in past 3 weeks)

Cryptocurrency Dogecoin

Assets (securities) within my immediate universe which touched the other side of the extreme, being Oversold (where the RSI is < 30) or were at least 2.5 standard deviations below its mean are;



Extremes “below” the Mean (at least 2.5 standard deviations)

Nil



Oversold (RSI < 30)

Nil



Notes & Ideas:

The list of ‘Over Bought’ extremes is shrinking as many of those extremes have eased off their highs and some are on their way to reverting back to their mean.

The most obvious trend amongst the rising price brigade are commodities from the ‘softs’ agricultural complex such Corn, Soybeans, Wheat, Coffee. Many advancing more than 5% for the week and exhibiting parabolic moves.

Once again, no currencies are Overbought this week. All those listed as ‘extremely’ overbought in the past few weeks have corrected and have since traded 2-3% lower.

Equally, extreme ‘high’s in global government bond have seen yields decline.

Overbought cryptocurrencies have eased lower from last week’s highs as have European equity indices……..

while the Dow Jones Industrials, the S&P 500 and the Mid-Cap 400 continue to register Overbought readings.

April 25, 2021

by Rob Zdravevski

rob@karriasset.com.au