rob zdravevski's blog

Google is not evil

Google is not evil.
DeepMind didn’t need to make this data publicly available.

https://alphafold.ebi.ac.uk/

Glencore’s Glasenberg talks commodities

The bigger picture, albeit he may be ‘talking his book’, I’d prefer to hear that than someone who isn’t making a bet.

https://www.bloomberg.com/news/videos/2021-06-22/glencore-ceo-glasenberg-on-the-new-commodity-economy-video?sref=qLOW1ygh

https://www.bloomberg.com/news/videos/2021-06-22/glencore-ceo-glasenberg-on-the-new-commodity-economy-video?sref=qLOW1ygh

Macro Extremes (week ending July 16, 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)

USD/KRW (signifying a weaker Korean Won)

Overbought (RSI > 70)

Tin (for the 12th week)

Iron Ore

Hot Rolled Coil Steel

Natural Gas

Switzerland’s SMI equity index (for the 5th week)

and the Copenhagen, Stockholm and Helsinki equity indices.

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

None

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)

U.S. Government 10 year bond yields (10’s),

the Australian (10’s), Canadian,  U.K., Japanese and Swedish 10’s

and the Australian 10 year minus 2 year yield spread 

Oversold (RSI < 30)

AUD/JPY (a weaker AUD and a stronger Yen suggests ‘risk-off’ is tiring)

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

Chinese government 10 year bond yields. (bond buyers have been the more aggressive, thus bond price have been rising)

Chinese stocks are not popular

Notes & Ideas:

The notable additions to the ‘extremes’ list is the return of government bond yields, however this time the yields are at the lower end of their range. Interestingly, their ‘trading bands’ are narrowing which portends a change in trend.

The week’s dominant price movers were mainly in the commodities markets..

There was a 5% bounce in Corn and Soybeans, along with a 13% surge in Wheat, which I forecasted in the following 2 links.

‘Fat Part’ of Wheat’s short has been seen

Corn is finding a floor

Coffee rose 6.5%, Sugar climbed 2.5% while we saw Lumber and Lean Hogs slump 29% and 18% respectively. Neither are Oversold yet.

With the exception of Natural Gas (which is ‘peaking’) the energy complex (crude, heating oil, gasoline) saw declines of between 2%- 3%. These are longer in Overbought territory.

In last week’s Macro Extremes edition, I wrote, many <indices> made ‘lower highs and lower lows’, including the SOX Semiconductor Index, the Russell 2000, the S&P MidCap 400, the U.S. KBW Banking Index and the Dow Jones Transports.

And so this week, we saw the U.S. KBW Banking Index fall 2.5%, the DJ Transports, Philadelphia Semiconductor Index and the S&P MidCap 400 decline 4%. The small cap Russell 2000 tanked 5%.

The Nasdaq 10, S&P 500 and France’s CAC-40 all retreated from Overbought territory with the latter snapping a 13 week streak in the lofty region.

The Hang Seng China Enterprise Index (HSCEI) and Hang Seng (HSI) equity indices are not at an ‘extreme’ this week, following a 3% rise in each.

Other global equity indices saw a mostly benign week with South Korea’s KOSPI rising 2% and the U.K.’s FTSE 100 was a mirror opposite falling 2%

The U.S. 10 year bond yield continues to trend lower, falling to 1.29% from last week’s 1.36%. This week, it closed on its low and above the previous intra-week low of 1.25%. The yield of the U.S. 10’s have now fallen from 1.52% a month ago.

The 10’s remain bound in a larger range but we watch it broader capital markets could become explosive is the 10’s break either below 1.25% or above 1.65%.

The 10 Year bond yield should reverse higher

In crypto currencies, Bitcoin fell 8% (extending last week’s 4% retreat), Ethereum slumped 12% compounding last week’s 8% decline and Cardano swooned 14%.

Trading bounce in Crypto is done

And lastly, Bitcoin is trading 127% above its 200 Week Moving Average, which is lower than last week’s 146% reading and certainly lower when compared to its 466% peak in mid-April 2021.

July 17, 2021

by Rob Zdravevski

rob@karriasset.com.au

Wheat is bouncing

Wheat has bounced 10% in the past 5 days.

I wrote a little note about end of the short trade in Wheat a few days ago.

‘Fat Part’ of Wheat’s short has been seen

July 16, 2021
by Rob Zdravevski
rob@karriasset.com.au

on my radar

Referencing back into what I’ve written about over the past few weeks, the things that I’m watching in the next few days in global capital markets include….

Brent Crude holding $72, my call is a visit to $64;
Platinum is creeping higher;
Has Lumber found a floor;
Russell 2000’s 3.5% decline of past 2 days;
A 3.5% bounce in Chinese equities;
U.S. bond yields falling (I’m mesmerised);
AUD/JPY near oversold;
JGB’s nearing 0.00% but shouldn’t go negative;
Bitcoin and Ethereum declining;
And inflation commentary morsels embedded within U.S. earnings reports.

July 15, 2021
by Rob Zdravevski
rob@karriasset.com.au

Earnings call transcripts contain much

My top tip during Wall Street’s quarterly earnings season is that the company’s tell you much of the information investors need to now.

I’ve attached a transcript of the JP Morgan’s earnings call and highlighted responses which interested me.

The politics of Gas

“Zelenskiy said there was little reason to trust Putin”

https://www.bloomberg.com/news/articles/2021-07-12/merkel-says-gas-must-flow-through-ukraine-after-pipeline-built?sref=qLOW1ygh