Trying to hear what's not being said
September 27, 2024 Leave a comment
The Shanghai Composite and the CSI 300 indices have appeared in the oversold category of my past 2 weekend editions of Macro Extremes.
This week, these indices have risen 9.7% and 15.7% respectively.
It’s nice but I don’t like the set-up.
September 27, 2024
by Rob Zdravevski
rob@karriasset.com.au
May 11, 2024 Leave a comment
Under the category of being steadfast when buying (or investing) at a time of crisis or intense pessimism….
at the moment when its was both (simultaneously) trading at a weekly oversold level and 2.5 standard deviations below its weekly mean….
Israel’s Tel Aviv 25 equity index has risen 25% within 7 months.
The mind boggles.
Admittedly, this market wasn’t within my focus in October 2023 as many other indices were cratering at the same time.
The TA35 has easily outperformed Australia’s ASX 200 which has risen 14% from its October 2023 trough.
November 2, 2023 Leave a comment
If it feels that many are bearish, it’s because they are.
The weekly AAII Investor Sentiment Survey just released its latest result.
For the week ending Wednesday November 1, 2023, their survey respondents were;
Bullish 24.3%
Neutral 25.4%
Bearish 50.3%
This week’s result has recorded the highest ‘bearish’ survey reading since the week ending December 22, 2022.
And it’s also the largest negative spread between the bullish and bearish reading being (26%) since the week ending March 23, 2023.
The vertical lines in the attached chart of the S&P 500 highlight those previous moments, which marry up with the measured sentiment.
November 2, 2023
by Rob Zdravevski
rob@karriasset.com.au
September 14, 2022 Leave a comment
This week’s Bank of America survey highlights include,
Fund managers are “super bearish” with average allocations to cash at the highest since 2001, with 62% being overweight cash;
A net 42% of global investors are underweight European equities, the largest such position on record;
A historically high 52% of respondents said they are underweight equities;
Of the polled 212 investors overseeing $616 billion in assets from Sept. 2-8, said 72% of those surveyed said they expected a weaker economy next year, and the most crowded trade was long U.S. dollar.
September 14, 2022
September 2, 2022 Leave a comment
I’m sharing a presentation which I spoke to this week.
The topic is contrarianism where I show long-term charts (on a weekly basis) and quantified extreme moments using three measures, being:
– the 200 week moving average
– the Relative Strength Indicator (signalling Overbought and Oversold readings) and
– Bollinger Bands showing when prices traded to 2.5 standard deviations (either above or below its rolling weekly mean)
I attempted to highlight the case for lower interest rates and inflation (as they are themselves trading at ‘extreme’ levels) by showing a host of correlations and I believe moderation is aided with further mean reversions amongst various prices, while many other commodities have already done so. As reported inflation figures lag, lower readings are expected to appear in the coming 4-10 months.
There is also a series of charts showing recent buying ‘windows’ and where I’m waiting for some others to enter my buying territory.
Towards the end of the presentation I touch on how a scramble to secure supply led to price spikes and parabolic price moves in commodities such as Lumber and Steel, where such parabolas were (and often) followed by sharp declines.
I think there is much finished product still held as inventory, thus tying up working capital and should lead to discounting wars. This will be deflationary and assist in abating inflation and interest rates.
To be clear, I’m calling for interest rates and inflation to abate, not collapse.
September 2, 2022
by Rob Zdravevski
rob@karriasset.com.au
October 13, 2021 Leave a comment
I’m advising clients to tune in where the noise is and where the herd is gathering.
Albeit, this is subjective and certainly more art than science, it’s important to identify the “crowded trade” and asking yourself if you are about to be the marginal buyer.
For example,
“everyone” is going Long Crude Oil, Natural/LNG Gas and Coal.
and “nobody” wants to buy Chinese equities nor Gold.
There is merit considering a contrarian result.
With Brent Crude Oil currently $83, I ask myself if it rises $20 or falls $20 from here?
In the coming months, I say it sees $63 rather $103.
October 13, 2021
by Rob Zdravevski
rob@karriasset.com.au
rob zdravevski's blog 