Macro Extremes (week ending September 3rd, 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)

Cocoa

Overbought (RSI > 70)

Hot Rolled Coil Steel (for the 49th consecutive week)

Cattle

Natural Gas

Switzerland’s SMI equity index (for the 13th week)

the Nasdaq 100 & S&P 500 index

Amsterdam’s AEX, Copenhagen’s 25 and Helsinki equity indices

and India’s NIFTY 50 equity index

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

Aluminium

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)

None

Oversold (RSI < 30)

None

The Oversold Quinella – Both Oversold and Traded at < 2.5 standard deviations above the weekly mean)

None

Notes & Ideas:

This past week was a story of muted action in many asset classes. Commodities and the commodity related currencies were the providers of volatility.

The other notable news is the list above is the smallest over the past 5 months.

The larger advancers over the past week comprised of Lumber soaring 23.5%, Natural Gas climbing 7.3%, Nickel was 4% higher, Aluminium, Silver and Cocoa rose 3%, Heating Oil and Gasoil advanced 2.5% and Tin was up 2.2%. Amongst the equities, the Nikkei +5.4%, Korea’s KOSPI + 2%, Russia’s MOEX + 3%, the Hang Seng +2% and the HSCEI +3.7%, adding to last week’s 2.5% rise…..remember how the sky was falling for Chinese related stocks?

The decliners counted Iron Ore (9%), Orange Juice and Corn (6%), Cattle (3.4%), Sugar and Soybean (2.5%), Brazil’s Bovespa (3%), the U.S. KBW Banking Index (3.8%) and somewhat surprising Gold (priced in AUD) fell 1.3%.

September 5, 2021

by Rob Zdravevski

rob@karriasset.com.au