Macro Extremes (week ending May 24, 2024)

May 26, 2024 Leave a comment

A weekly Macro, Cross Asset review of prices trading at extremes which may generate future investment ideas and opportunities.

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

* denotes multiple week inclusion

Extremes above the Mean (at least 2.5 standard deviations)

Copper/Gold Ratio *

Bloomberg Commodity Index

Copper

JKM LNG in USD and JPY

Nickel *

Platinum *

Dutch TTF Gas

Wheat *

AUD/SGD

Helsinki *

South Africa 40

And the ASX Materials Index

Overbought (RSI > 70)

Japanese 2, 5 and 10 year government bond yield * 

Tin

AEX *

Austria’s ATX *

Malaysia’s KLSE *

Pakistan’s KSE Index *

Oslo *

Stockholm

TAEIX *

and Turkiye’s BIST 100 *

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

Nickel on MCX

Orange Juice

Extremes below the Mean (at least 2.5 standard deviations)

Australian 10 year minus Australian 2 year government bond yield spread

CAD/EUR

CAD/GBP

USD/ZAR

Oversold (RSI < 30)

North European Hot Rolled Coil Steel *

Lumber *

Lithium Hydroxide *

Sugar

The Oversold Quinella (Both Oversold and Traded at < 2.5 standard deviations below the weekly mean)

None

Notes & Ideas:

Government bond yields rose, mostly.

It was another week of relative quiet action.

The Russian 10 year government bond yield isn’t overbought anymore.

And the U.S. 10 year inflation breakeven rate, mean reverted.

Equities were mainly weaker.

The Hang Seng Index and S&P Small Cap 600 aren’t overbought anymore.

Many other equity indices also dropped out of their overbought extremes.

The KBW Bank Index, Vietnam, CSI 300 and Shanghai Index all broke their weekly winning streaks.

The Nasdaq Composite, KLSE, FTSE 250, Nasdaq 100, S&P 500 and TAEIX have all put together a 5 week winning streak.

Pakistan’s KSE has risen for 9 of the past 10 weeks.

The Philadelphia Semiconductor Index (SOX) has risen 10% over the past 3 weeks.

Oslo is at an all-time high.

And the HSCEI and Indonesia’s IDX had a weekly outside bearish week. 

Commodities were mostly stronger.

Cotton, Coffee, JKM LNG, Cocoa and Wheat all had a good week.

Nickel as traded on India’s MCX makes a return to registering an overbought extreme.

Oil & Distillates, Copper,  Palladium, Platinum, Silver and Gold all saw weakness.

Tin returns to overbought territory.

Silver and Gold (in all currencies except the CHF) are no longer overbought. 

In fact, Gold performed a bearish outside reversal week.

Lean Hogs are in a 5 week losing streak.

Orange Juice has risen 27% over the past 3 weeks.

Soybeans are in a 5 week winning streak.

Cotton rose and broke its 11 week losing streak.

And Lithium Hydroxide has now spent 45 consecutive weeks in weekly oversold territory.

Currencies saw some action during the week.

The British Pound was stronger and nearing extreme against the JPY and EUR.

The Yen was mostly weaker., 

The Aussie was weaker against all except the Thai Baht and South African Rand.

The Euro as mixed while the Loonie was weaker.

The larger advancers over the past week comprised of;

Aluminium 2.4%, Cocoa 12.9%, Cotton 6.1%, JKM LNG 7%, Coffee 5.6%, JKM LNG in Yen 13.9%, Tin 2.7%, Nickel in MCX 4%, Orange Juice 6.3%, Robusta Coffee 10.6%, Corn 2.7%, Oats 3%, Wheat 7.1%, Egypt 4.1%, NIFTY 2%, SENSEX 2%, Chile 1.8% and the SOX rose 4.8%.

The group of largest decliners from the week included;

Baltic Dry Index (2.6%), WTI Crude Oil (2.3%), Lean Hogs (2.3%), Copper (5.9%), Heating Oil (2.8%), Nickel (4.1%), Palladium (4%), Platinum (4.7%), Gasoline (3.5%), Sugar (2.4%), Brent Crude Oil (2.1%), Gasoil (3.1%), Silver in AUD (2.7%), Silver in USD (3.6%), Gold in AUD (2.4%), Gold in CAD (3%), Gold in EUR (3.1%), Gold in GBP (3.6%), Gold in USD (3.3%), Rice (2.2%), Shanghai (2.1%), CSI 300 (2.1%), KBW Banks (2.3%), China A50 (2.6%), DJ Industrials (2.3%), DJ Transports (2.7%), MIB (2.6%), HSCEI (4.8%), Hang Seng (4.8%), BOVESPA (3%), IDX (3%), MOEX (3%), KRE Regional Banks (4.4%) and Mexico fel 3.8%.

And for some reference for Australian readers, the ASX 200 and ASX Small Caps fell 1.1%, the ASX Materials fell 1.5% while the ASX Industrials rose 0.9% for the week.

May 26, 2024

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , , ,

Macro Extremes (week ending May 3, 2024)

May 5, 2024 Leave a comment

A weekly Macro, Cross Asset review of prices trading at extremes which may generate future investment ideas and opportunities.

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

  • denotes multiple week inclusion

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

Australian 2, 3, 5 & 10 year government bond yields *

Japanese 2 year government bond yield

South Korean 10 year government bond yield *

Copper/Gold Ratio

U.S. 5 year government bond yield minus U.S. 5 year inflation breakeven rate *

Newcastle Coal

Oats

AUD/IDR *

AUD/THB *

Hang Seng China Enterprises Index (HSCEI) *

Hang Seng Index *

J’burg 40 

Singapore Straits Times Index *

Overbought (RSI > 70)

Russian 10 year government bond yield 

AEX

Budapest

Malaysia’s KLSE *

Pakistan’s KSE Index *

FTSE 250

and Turkiye’s BIST 100 *

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

Brazilian 10 year government bond yields 

Copper

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

SHY

PHP/USD *

Dow Jones Transports *

And Indonesia’s IDX30 *

Oversold (RSI < 30)

Lithium Hydroxide

North European Hot Rolled Coil Steel

The Oversold Quinella (Both Oversold and Traded at < 2.5 standard deviations below the weekly mean)

Lumber

Urea

Notes & Ideas:

Government bond yields fell.

Many streaks were broken such as the 5 week winning streak in Canadian and South Korean 10’s along with all the yields across the British curve.

Chinese 10 year bond yields is no longer oversold as its yield rose.

Equities were mostly higher.

However, selected European bourses did see weakness.

China’s A50 Index and the U.S. KBW Bank Index have risen 7.5% and 5.2% respectively, over the past 3 weeks.

IBEX, MIB, & Stockholm’s OSX 30 aren’t overbought anymore.

The HSCEI and Hang Seng both rose 4.5% for the week, adding to last week’s 9% advance.

Furthermore, the Hang Seng and U.S. (KRE) Regional Banks Index are in a 3 week winning streak.

The SOX finished flat following last week’s stunning 10% rise.

Karachi broke its 6 week winning streak.

The Nasdaq Transports has declined for 5 consecutive weeks.

And Toronto’s TSX registered a bearish outside reversal week.

Commodities were mostly lower, again.

Weakness was seen in Cocoa, Coffee, Precious Metals, Oils and Distillates.

Strength was evident in Base Metals, Coal, Gases and Grains.

Some of the grains have strung 3 weeks of consecutive gains.

Aluminium, Tin & Nickel are not overbought anymore, nor is Cocoa, Coffee or Gold (in any currency).

Cocoa has fallen 31% in the past fortnight and has broken its overbought streak of 27 weeks.

While Australian Coking Coal isn’t oversold this week.

Robusta Coffee has fell 15% accounting for nearly half of the 39% rise seen in the prior 9 weeks.

Cotton has fallen for 8 consecutive weeks while Rubber has sunk for 6 weeks straight.

Iron Ore in a 5 week winning streak.

U.S. Hot Rolled Coil Steel performed a bearish weekly outside reversal.

And Lithium Hydroxide has now spent 42 consecutive weeks in weekly oversold territory.

Currencies are providing stealth guidance for the health of various asset trends.

The big news was the strength in the Japanese Yen and it’s no longer at last weeks extremes.

The AUD rose against all except the Yen.

The Canadian Loonie fell while the Euro was mixed.

The British Pound fell with the exception of the USD pair.

The Thai Baht broke its 7 week losing streak against the USD.

And the USD/SEK registered a outside weekly bearish week.

The larger advancers over the past week comprised of;

Australian Coking Coal 3.2%, Baltic Dry Index 9%, China Coking Coal 4.7%, Tin 2%, Newcastle Coal 5.8%, Natural Gas 11.4%, Platinum 4.7%, Dutch TTF Gas 5.5%, Uranium 5.5%, Corn 2.3%, Oats 7.9%, Soybeans 3.2%, China A50 2%, HSCEI 4.4%, Hang Seng 4.7%, Russell 2000 1.8%, KRE Regional Bank Index 3%, FTSE 250 1.7%, Nasdaq Biotechs 5.9%, Chile 2.6% and the BIST 100 rose 3.6%.

For reference, the S&P 500 rose 0.6% for the week.

The group of largest decliners from the week included;

Aluminium (1.9%), Cocoa (23.1%), WTI Crude (6.9%), Cotton (3.5%), Lean Hogs (2%), Heating Oil (4.7%), Coffee (Arabica) (10.4%), Lumber (2.7%), Lithium (5.7%), Gasoline (6.9%), Coffee (Robusta) (14.7%), SPGSCI (3.8%), CRB Index (3.5%), Brent Crude Oil (6%), Gasoil (5.3%), Urea Middle East (2.1%), Silver in AUD (3.6%), Silver in USD (2.4%), Gold in AUD (2.7%), Gold in CHF (2.6%), Gold in EUR (2.2%), Gold in GBP (2%), Gold in ZAR (3%), CAC (1.6%), MIB (1.8%) and Spain’s IBEX fell 2.7%.

May 5, 2024

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , , , , , , , , , , , , ,

Macro Extremes (week ending April 19, 2024)

April 21, 2024 Leave a comment

A weekly Macro, Cross Asset review of prices trading at extremes which may generate future investment ideas and opportunities.

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

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

U.S. 5-7 year corporate bond yield 

Australian, Brazilian, Chilean, Japanese, South Korean and U.S. 10 year government bond yield 

Japanese 2 year government bond yields 

U.S. 7 year government bond yields 

U.S. 20 and 30 year government bond yields 

TBT

U.S. 5 year government bond yield minus U.S. 5 year inflation breakeven rate

U.S. 5 year government bond yield minus U.S. 3 month bill yield

U.S. 10 year government bond yield minus U.S. 10 year inflation breakeven rate

Gold Volatility Index

Cocoa

Nickel

Overbought (RSI > 70)

U.S. 10 year bond yield minus Australian 10 year bond yield 

U.S. 10 year bond yield minus German 10 year bond yield 

U.S. 10 year bond yield divided by Australian 10 year bond yield 

Gold in CHF

CRB Index

Italy’s MIB

Russia’s MOEX 

And Pakistan’s KSE Index

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

Coffee (Arabica)

Coffee (Robusta)

Aluminium

Copper

Tin

Silver in AUD and USD

and Gold as priced in AUD, CAD, EUR, GBP, USD and ZAR

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

IEF

IEI 

SHY

TLT

Australia 10 year yield minus U.S. 10 year yield

Urea (U.S. Gulf)

CAD/USD

GBP/USD

PHP/USD

DKK/USD

INR/USD

KRW/USD

SEK/USD

Dow Jones Transports

And Thailand’s SET Index

Oversold (RSI < 30)

Chinese 10 year government bond yields

Australian Coking Coal

Lithium Hydroxide

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

Lumber

BRL/USD

IDR/USD

Notes & Ideas:

Government bond yields rose.

Chilean 10’s have risen for 6 consecutive weeks and have risen for 10 of the past 11.

Across the curve, British yields have climbed for 4 straight weeks as have South Korean and Japanese 10’s.

And Russian 10 year bond yields aren’t overbought anymore.

Equities broadly fell everywhere…..

with the exception of Chinese stocks and U.S. banks.

Impressively the Dow Jones Industrials were flat for the week.

The Russell 2000 has declined 2.8% for 3 consecutive weeks, enough to see it touch its 200 week moving average.

The DAX fallen for 3 straight weeks, while Copenhagen and Switzerland’s SMI have done so for 4 weeks.

Oslo broke its 7 week winning streak after last week’s posting of an outside bearish reversal.

And South Africa broke its 4 weeks winning streak.

Commodities were mixed.

We saw strength in base metals, softs and coals, again.

Weakness was seen in Oils, Lumber, Cotton, Soybeans, Sugar and the PGM’s.

Biodiesel and Brent Crude Oil isn’t overbought this week.

Gold, Aluminium, Copper, Coffee, Tin and Silver all appear in the overbought quinella column this week.

Gold’s weekly winning streak is at 5 while Silver has risen for 7 of the past 8 weeks.

Coffee prices were amongst the largest gainers for the week, again. Robusta Coffee has risen 31% over the past 8 weeks.

Cotton has fallen for 6 straight weeks, while Lumber’s declining streak is at 4 week.

Gasoline broke its 5 week winning streak.

The LNG JKM price (in Yen) has risen 20% over the past fortnight.

Cocoa has been overbought for 26 weeks, while putting together a recent 9 week winning streak.

Cocoa remains more expensive than Copper.

Aluminium has risen for 8 straight weeks, rising 24% over that time.

And Lithium Hydroxide has now spent 40 consecutive weeks in weekly oversold territory, however it rose 8%.

Currencies are seeing continued action.

U.S. strength is keeping many reciprocals in oversold territory.

The AUD and the Yen were weaker.

The CAD was firmer as was the Euro.

And the BRL has fallen for 7 straight weeks against the USD.

The larger advancers over the past week comprised of;

Australian Coking Coal 5.7%, Aluminium 10%, Baltic Dry Index 11%, Cocoa 9.4%, China Coking Coal 4.2%, Lean Hogs 2.5%, Copper 5.6%, Coffee 5.2%, JKM LNG in Yen 7.5%, Tin 3.5%, Newcastle Coal 6%, Nickel 9.5%, Robusta Coffee 4.7%, Shanghai Iron Ore 2.1%, Silver in AUD 3.6%, Silver in USD 2.9%, Gold in AUD 2.8%, Gold in EUR 1.9%, Gold in GBP 2.7%, Gold in USD 2.1%, Oats 2%, Rice 7.5%, Shanghai Composite 1.5%, CSI 300 1.9%, KBW Bank Index 2%, Chian A50 3.4% and Pakistan’s KRE Index rose 1.7%.

The group of largest decliners from the week included;

WTI Crude Oil (3.4%), Cotton (4.5%), Heating Oil (5.4%), Lumber (5.9%), Lithium (3.4%), Orange Juice (3.2%), Palladium (3.1%), Platinum (5.8%), Gasoline (3.3%), Biodiesel (2%), Sugar (3.5%), S&P GSCI (1.4%), Brent Crude Oil (3.3%), Gasoil (7%), Soybeans (2%), All World Developed ex USA (2.3%), AEX (2.7%), Budapest (3.3%), DJ Transports (2.7%), HSCEI (2.3%), Hang Seng (3%), IDX (4.4%), S&P SmallCap 600 (1.2%), Russell 2000 (2.8%), Nasdaq Composite (5.5%), KOSPI (3.4%), FTSE 250 (1.7%), S&P MidCap 400 (2.2%), Nasdaq Biotech (3.1%), Nasdaq 100 (3.4%), Nikkei (6.2%), Nifty (1.7%), Oslo (2.5%), PSE (3.3%), J’burg 40 (2.7%), SET (4.6%), SOX (9.2%), Chile (2.9%), S&P 500 (3.1%), TAIEX (5.8%), FTSE 100 (1.3%), Vietnam (8%), ASX 200 (2.8%), ASX Materials (2.2%), ASX Industrials (2.9%) and the ASX Small Caps fell 3.9%

April 21, 2024

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , , ,

When Private Equity firms, themselves, go public.

April 16, 2024 Leave a comment

It all started when Fortress Investment Group went public on February 9, 2007, and the IPO was priced at $18.50 per share.

Next, Blackstone went public in June 2007 when its IPO was priced at $31.

KKR priced its IPO at $10 in July 2010.

At the time of KKR going public, shares in Blackstone Group (BX) and Fortress Investment Group (FIG) had fallen by 71% and 87% respectively since their market debuts in 2007.

Apollo Global Management was next to list their shares, when on March 30, 2011 their IPO was priced at $19

The Carlyle Group went public on May 3, 2012, and the IPO was priced at $22 per unit.

More recently, TPG went public on January 13, 2022, and the IPO was priced at $29.50 per share.

Everyone’s charts are below except for Fortress (FIG) because in Q1 of 2017, Softbank acquired them for $8.08 per share.

Today, CVC announced their interest in going public.

Over a 10-15 year timeframe, it’s not clear cut whether there is merit backing the ‘sponsor’ in every case.

April 15, 2024

by Rob Zdravevski

rob@karriasset.com.au

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Macro Extremes (week ending March 22, 2024)

March 24, 2024 Leave a comment

A weekly Macro, Cross Asset review of prices trading at extremes which may generate future investment ideas and opportunities.

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

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

US10 year minus Australian 10 year yield spread

US10 year divided by Australian 10 year yield spread

WTI Crude Oil

Copper

Tin

S&P GSCI

Brent Crude Oil

Silver in AUD, USD & EUR

Gold in USD

AUD/JPY

AUD/THB

FTSE 100

Overbought (RSI > 70)

Biodiesel

Robusta Coffee 

AEX

Budapest

CAC 30

DAX

Dow Jones Industrial Average

Italy’s MIB

Nasdaq Composite

Nikkei 225

Stockholm

Philadelphia SOX

TAIEX

Nasdaq Transports

Toronto’s TSX

Vietnam

And the S&P 500 Index

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

Russian 10 year bond yield 

Gold in AUD, CAD, EUR, GBP & CHF

Cocoa

IBEX

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

AU10Y – US10Y yield

Australian Coking Coal

CHF/AUD

Chinese RMB

INR/USD

Oversold (RSI < 30)

Chinese 10 year government bond yields

Lithium Hydroxide

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

None

Notes & Ideas:

Government bond yields mostly fell except for the Japanese 2’s and 5’s.

The Japanese 5’s winning streak extends to 7 weeks.

Russian 10 year yields have risen for 8 consecutive weeks.

The Chinese 10’s are the notable oversold extreme in this week’s list.

Equities were higher.

Shanghai is in a 6 week winning streak while the CSI 300 broke its 5 week advance.

Toronto’s has sneakily put together 6 straight rising weeks. 

The DAX is in a 7 week winning streak, the MIB advance extends to 8 consecutive weeks.

The Nasdaq is 34% above its 2090 week moving average while the S&P 500 is 27% above the same measure.

Egypt’s 30 Index isn’t overbought anymore.

Spain’s IBEX has registered an overbought quinella as it trades at its highest point since June 2017.

The FTSE 100 returns to the overbought territory.

The CAC and DAX are still making new all-time highs.

The Dow Jones Industrial Average re-enters overbought territory.

And Italy’s MIB has traded to its highest point since May 2008.

Commodities were generally higher.

While Rotterdam Coal is in a 5 week winning streak, Most coal prices had a terrible week.

Crude Oil makes a return to overbought land, while Copper and Tin extend their stay there.

Rubber isn’t overbought this week.

Gold prices across various currencies remains overbought.

Cocoa has now spent 22 weeks in overbought land.

Nickel broke its 5 weeks winning streak.

Uranium and the Baltic Dry Index broke their 6 week losing streaks.

And Lithium Hydroxide has now spent 37 consecutive weeks in weekly oversold territory.

Currencies saw a firmer CAD again as was the USD.

The AUD was firmer against all except versus the Yen.

The Euro was mixed.

The Yen as did the Kiwi.

The latter is in a 4 week losing streak again the AUD.

The larger advancers over the past week comprised of;

Aluminium 2.8%, Cocoa 11.5%, LNG JKM in Yen 4%, Dutch TTF Gas 2.8%, Uranium 4%, Gold in CHF 2%, Wheat 5%, All World Developed ex USA 1.2%, AEX 2.9%, Austria 2.6%, KBW Bank 3.7%, DAX 1.5%, DJ Industrials 2%, DJ Transports 3.3%, IBEX 3.3%, Nasdaq Composite 2.9%, KOSPI 3.3%, S&P MidCap 400 2.2%, Nasdaq 100 3%, Nikkei 225 5.6%, Russell 2000 1.5%, SOX 3.2%, S&P 400 2.3%, TAIEX 2.8%, Nasdaq Transports 2.9%, FTSE 100 2.6%, ASX 200 1.3%, BIST 3.2% and the ASX Materials rose 2.4%

The group of largest decliners from the week included;

Australian Coking Coal (2.8%), China Coking Coal (2.8%), Rotterdam Coal (2%), Baltic Dry Index (5.5%), Cotton (2.6%), Lean Hogs (2.6%), Copper (3%), Heating Oil (2.4%), Tin (2.3%), Newcastle Coal (4.3%), Nickel (2%), Palladium (8.4%), Platinum (4.8%), Gasoil (1.8%), Silver (2%), Oats (2.1%), Rice (2.7%) and Egypt’s 30 equity index tanked 7.2%.

March 24, 2024

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , , ,

Germany – from stinky to overloved

March 20, 2024 Leave a comment

For the 8th time in the past 12 years, #Germany‘s DAX Index is registering a weekly overbought reading.

While there is more behind my analysis, this simple study shows that probabilities of a further advance change at this juncture.

Following such an occurrence, we mostly see the #DAX trade sideways, if not lower, for up to 24 months hence.

It’s not a time to chase.

That country #allocation trade began about 20 months in mid-2022.

50% ago.

This note listed that observation.

Most stinkiest, unloved and oversold – Equities

While the DAX is currently within its 7th consecutive week of higher prices and myopically, it looks like having a little more upside, the ‘fat part of the trade’ has been seen.

March 20, 2024

by Rob Zdravevski

Karri Asset Advisors

rob@karriasset.com.au

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Macro Extremes (week ending March 15, 2024)

March 17, 2024 Leave a comment

A weekly Macro, Cross Asset review of prices trading at extremes which may generate future investment ideas and opportunities.

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

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

U.S. 3 month bill yield

Copper

Gasoline

Silver in AUD, EUR, JPY and CHF

Gold in USD, GBP , ZAR, CAD and EUR 

Overbought (RSI > 70)

Biodiesel

Robusta Coffee 

AEX

Budapest

CAC 30

DAX

Italy’s MIB

KLSE

Stockholm

And the S&P 500 Index

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

Russian 10 year bond yield 

Gold in AUD, CHF & JPY

Cocoa

Rubber

Egypt 30 Index

TAIEX

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

Australian Coking Coal

Iron Ore

Oversold (RSI < 30)

Chinese 10 year government bond yields

Lithium Hydroxide

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

None

Notes & Ideas:

Government bond yields were mostly higher while many remain trendless.

All yields were lower, except for the Japanese, again.

Japanese 2’s eased away from overbought territory and broke its 8 week rising streak.

The Japanese 5’s winning streak extends to 6 weeks.

Russian 10 year yields have risen for 7 consecutive weeks.

The Chinese 10’s are the notable oversold extreme in this week’s list.

Equities were mixed. Most finished the week 1% of either of side of last weeks close.

Some European bourses continue their winning ways such as Spain, France and Italy as do the recently shunned Chinese indices.

While U.S. indices eased lower and some have commenced something resembling a retracement some weeks ago.

Australian indices were amongst the largest decliners.

The Shanghai Composite and the CSI 300 have put together a 5 week winning streak, the DAX is at 6 weeks, while the Philippines main index broke its 7 week winning streak and the S&P Midcaps snapped its 9 weeks run of advances.

As a result, the MidCap 400 isn’t overbought this week.

Copenhagen isn’t overbought either, nor the Nikkei 225, the NIFTY 50, the FTSE All World (developed ex-USA) index, SENSEX, the SOX and the Nasdaq Transports.

The Nasdaq Composite and Nasdaq 100 aren’t overbought anymore either.

Toronto’s TSX is in a 5 week winning streak.

Vietnam’s main index is nearing overbought territory.

Mexico broke its 5 week losing streak.

Brazil’s BOVESPA has bucked the direction of most global bourses by falling 5.2% since its Christmas overbought reading.

Intra-week, Russia’s MOEX 10 made another all-time high but didn’t close there.

The S&P 500 is still overbought. This week’s decline of 0.1% means it has only declined for 4 weeks of the past 20 weeks.

The CAC and DAX are still making new all-time highs.

Spain’s IBEX is at its highest point since January 2018 and is nearing an interesting overbought scenario.

The Dow Jones Industrial Average took a vacation from its 13 week stay in overbought territory.

And Italy’s MIB has traded to its highest point since May 2008.

Commodities were generally higher.

Oils, distillates and most gases (except for Henry Hub Natural Gas) had a good week, which weigh heavily on the performance of the broader commodity tracking indices.

As a result, JKM LNG isn’t oversold this week.

Inversely, Henry Hub Natural Gas prices fell 8%  to close at an all-time low. This is another example of a parabolic price move being thumped. I’m watching closely for developing strength in this downward trend. Should it gather steam, a visit to $1.20 wouldn’t be out of the question. That’s quite move from $11 from only 20 months ago.

While Gold prices took a breather, its price remains in overbought territory across various currencies.

AUD Gold remains 23% above its 200 week moving average.

Other precious metals had a good week too, with Palladium outpacing Silver.

Cocoa went super parabolic rising 25% for the week and has now spent 21 weeks in overbought land.

Coal was a loser again.

Raw Cane Sugar recovered all of last weeks decline. 

Grains, Precious Metals and Industrial Metals were firmer.

Corn and Soybeans are not oversold anymore. In fact, Soybeans have risen for the past 3 weeks after snapping their recent 10 week losing streak.

Wheat is very close to an oversold reading.

Since its recent oversold reading, Nickel has risen for the past 5 weeks.

Uranium and the Baltic Dry Index are in 6 week losing streaks.

The former has fallen 22% during that streak.

Rotterdam Coal is in a 4 week winning streak.

I see a change in trend approaching for Urea prices.

And Lithium Hydroxide has now spent 36 consecutive weeks in weekly oversold territory.

Currencies saw a firmer CAD, EUR and USD.

The USD rose against everyone unless it was a Peso.

The Japanese Yen was weaker perhaps as capital markets continue to embrace risk, or is this some sort of divergence?

The Aussie fell against everyone except the Yen and Baht.

The DXY Index recovered more than half of last weeks decline.

And the USD broke its 5 week losing streak against the SEK.

The larger advancers over the past week comprised of;

Rotterdam Coal 2.2%, WTI Crude 4.1%, Lean Hogs 2.4%, Copper 5.9%, Heating Oil 3.6%, JKM LNG 3.8%, LNG in Yen 3.6%, Tin 3.4%, Cocoa 25.4%, Orange Juice 2.6%, Palladium 6.3%, Platinum 3.1%, Gasoline 7.5%, Biodiesel 2.4%, Sugar 4.6%, Cane Sugar 4.5%, SPGSCI 2.8%, CRB 2.9%, Dutch TTF Gas 2.4%, Brent Crude 4.2%, Gasoil 4%, CAC 1.7%, China A50 2.1%, MIB 1.6%, HSCEI 2.9%, Hang Seng 2.9%, IBEX 2.8%, Mexico 2.4%, Stockholm 1.9%, Chile 1.9%, Silver in AUD 4.6% and Silver in USD rose 3.6%.

The group of largest decliners from the week included;

Australian Coking Coal (5.3%), China Coking Coal (5.3%), Hot Rolled Coil Steel (2.7%), Lumber (2%), Newcastle Coal (4.7%), Natural Gas (8.3%), China Iron Ore (6.4%), S&P SmallCap 600 (1.8%), Russell 2000 (2.1%), Nasdaq Composite (0.7%), KRE Regional Banks (3.5%), S&P MidCap 400 (1%), Nasdaq Biotechs (1.2%), Nikkei 225 (2.5%), Nifty (2.1%), PSE (1.7%), SENSEX (2%), SOX (4%), ASX 200 (2.3%), ASX Materials (3.4%), ASX Industrials (2.7%), BIST (3.6%) and Uranium fell 5.9%.

March 17, 2024

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , , ,

Currencies are telling me….

February 12, 2024 Leave a comment

The currency markets are currently telling me that the mood is “risk-off” which opposes (and somewhat belligerent) the mood of ‘glamour’ equity indices barrelling higher.

The Aussie Dollar is aimless with a bias towards lower prices.

Specifically against the USD, I see it visiting the 0.6350 region and ultimately holding 0.6150 (+/- 30 pips).

There is similar pattern recognition in the #AUD/JPY and the AUD/CHF.

February 12, 2024

by Rob Zdravevski

rob@karriasset.com.au

#riskmanagement

Filed under Finance & Investment Tagged with , , , , ,

Mexico’s stock market has been a star

December 23, 2023 Leave a comment

Mexico’s stock market has hit an all-time high, following a recent 6 week winning streak.

In fact, the index has risen 8 of its past 9 weeks.

This week, Mexico’s main index registered a quinella of ‘overbought extremes’ and while momentum can suggest prospects of an extended move higher, my probability is conditioned towards selling, trimming and/or short.

Some may dismiss the importance of Mexico’s equity market but it’s GDP is ranked 15th in the world, which isn’t not too far away from Australia’s position at 13.

https://countryeconomy.com/countries/compare/mexico/australia

Incidentally, since the lows seen in 2009, the ASX 200 has risen 131% while Mexico’s IPC Index has climbed 225%.

December 23, 2023

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , ,

Navigating the Energy Markets: Short-Term Bullish on Henry Hub Natural Gas Amidst Other Energy Downtrends

December 7, 2023 Leave a comment

I think that energy prices are in the latter part of the larger mean reversion that I have been waiting to play out.

While Crude Oil, Gasoline, Diesel and Heating Oil prices look like having more downside and are confirming downward trends, my posture, at this end of the pendulum is being a buyer rather than ‘shorting’.

On a daily trading basis, Henry Hub Natural Gas is my nearest buying candidate.

Following today’s 5% decline (currently trading at $2.57), whether it tickles the $2.47 region is myopic. It has fully retraced the 45% advance which commenced in September 2023 along with ‘backing and filling’ a large gap.

Although, this may be a short-term trade where I scalp some returns, while I keep in mind that $2.10 could be seen if certain trend indicators exhibit strength.

But I am in a broader territory where I’m a longer-term accumulator.

December 7, 2023

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , , , , , , ,

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