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

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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

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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

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Buyers of Swiss Francs are being defensive, consider the antithesis

November 29, 2023 Leave a comment

For the strategic asset allocators;

When the circles represent an overbought condition for CHF/AUD on a Monthly basis, the rectangles on the main chart indicate an opportune moments for accumulating equities.

In this scenario, the S&P 500 is represented by the orange line.

November 29, 2023

by Rob Zdravevski

rob@karriasset.com.au

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Volatility is not rising, so stocks will

November 29, 2023 Leave a comment

The attached study was first published in June 2023.

It highlighted the moment when the VIX registered a certain RSI level in late November 2022.

12 months on, the S&P 500 has climbed 15% up the wall of worry that I allude to in the graphic below.

Recently, the VIX weekly RSI did not trade above 64 and it’s approaching 38 again.

The actual VIX Index is now at its lowest point since mid-January 2020.

The is little volatility present.

Others may suggest complacency and imply the buying of insurance is cheaper…..my work suggests that there is life in this S&P 500 advance,

but in the short-term, it’ll be in timing when to add or allocate.

November 29, 2023

by Rob Zdravevski

rob@karriasset.com.au

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Another ratio or spread to watch for SPX buying signals

September 25, 2022 Leave a comment

In early July 2022, the Copper/Gold Ratio registered its 7th weekly oversold reading within 12 years.

This occasion coincides with a notable low, or at least safer, longer term buying opportunity in stocks…..or as the chart below implies, in the S&P 500 Index.

In other posts I have mentioned how the monitoring of this ratio is also helpful in tracking the direction of interest rates.

In the meantime, I’ll watch if the Copper/Gold ratio re-visits the oversold region in the coming 3-8 weeks.

September 25, 2022

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with

Notable low for S&P 500 isn’t in yet

September 20, 2022 Leave a comment

The vertical lines show the significance when the Japanese 10 year bond yield is (on a weekly chart) simultaneously OVERSOLD and trading 2.5 standard deviations and BELOW its rolling weekly mean.

Around the same time, the S&P 500 also registers a notable low.

There have been 9 such moments over the past 15 years when probability suggests nibbling and adding to your holdings.

BoJ and Fed news this week will be helpful shaping the JGB yield but this study suggests the S&P 500 low isn’t there yet. This doesn’t necessarily mean a lower low, but rather a ‘notable’ low.

September 20, 2022

by Rob Zdravevski

rob@karriasset.com.au

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A trough in Bitcoin volatility portends a S&P 500 bottom

September 20, 2022 Leave a comment

Bitcoin’s price action, trend and sentiment suggests it tests somewhere around the US$16,000 mark. +/- $600.

A drop in Bitcoin’s 30 day volatility precedes a trough in the price of BTC/USD which precedes ‘one more decline’ in the S&P 500 before itself finds a floor.

This would put my S&P 500 target around 3,645.

A bottoming process which builds into a rally in these two markets would cause much damage to all those huddled on the other side of the boat.

p.s. The direction Bitcoin also has reasonably good correlation with the Australian Dollar and commodity prices.

September 20, 2022

by Rob Zdravevski

rob@karriasset.com.au

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Economy Health Check

September 10, 2021 Leave a comment

I’m watching the Copper/Gold Ratio (HG/GC)

Its direction tells me about the health of the economy.

The direction of the HG/GC also helps confirm the direction of interest rates. More specifically, the U.S. government 10 year bond yield.

In the chart below, I’ve overlaid a price chart (in blue) of the S&P 500 against the HG/GC.

You can see that the general direction of both the SPX and the HG/GC follow each other.

At this moment, the HG/GC is nearing a point where it breaks either way.

We’ll need to wait and watch in the coming week or so.

In my earlier post today, I imply that interest rates may rise.

This, then suggests that the HG/GC breaks higher (meaning Copper rises and Gold declines) which translate into the S&P 500 rising further.

A ‘melt-up’ in the S&P 500 is not a perverse idea, especially against the grain of many who are calling the top, let alone a crash.

It may seem odd to think, but markets often move to where they can do the most damage…..

and going higher can damage those who have been on the sidelines or sold up recently.

Missing out can also hurt investors.

September 10, 2021

by Rob Zdravevski

rob@karriasset.com.au.

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