Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Cross Asset Strategy

The breaks lower on Copper and the wider London Metals Exchange Index can now be confirmed.A look at the price action and charts suggest further losses to the tune of 10% from here in both.Perhaps as a consequence, we see an additional break lower on US 30 year yield.Is US 10 year yield to follow?This note is a quick follow up on the price action in markets from the earlier report titled <a href="https://www.smartkarma.com/insights/bonds-all-charts-lead-to-me" target="_blank" data-smartkarma-citation="insights:52482" rel="noopener">Bonds: All Charts Lead to Me</a>

The breaks lower on Copper and the wider London Metals Exchange Index can now be confirmed.A look at the price action and charts suggest further losses to the tune of 10% from here in both.Perhaps as a consequence, we see an additional break lower on US 30 year yield.Is US 10 year yield to follow?This note is a quick follow up on the price action in markets from the earlier report titled Bonds: All Charts Lead to Me 

Commodities & Bonds – The Breaks and the Targets

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

We continue to see signs of improving risk appetites alongside healthy market dynamics. As a result, our outlook remains constructive. A breakout to new highs in the Russell 2000 (IWM) and Russell Micro-Caps (IWC), above $234.50 and $159, would likely cause us to shift to an outright bullish stance. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary, Technology, and Health Care.

We continue to see signs of improving risk appetites alongside healthy market dynamics. As a result, our outlook remains constructive. A breakout to new highs in the Russell 2000 (IWM) and Russell Micro-Caps (IWC), above $234.50 and $159, would likely cause us to shift to an outright bullish stance. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary, Technology, and Health Care.

U.S. Yields Testing Support Ahead Of FOMC Meeting

Since the release of US labour market data yields have slipped. Notable price action has unfolded for only the third time since yields peaked in late March, which indicates lower yields still.Additionally, USDJPY has faltered, which is consistent with the signs in fixed income markets.But how low is low? Could this just be a short lived and relatively meaningless move down in yields or could we see US 10Y yield below 1.46% and US 30Y yield below 2.15%?

Since the release of US labour market data yields have slipped. Notable price action has unfolded for only the third time since yields peaked in late March, which indicates lower yields still.Additionally, USDJPY has faltered, which is consistent with the signs in fixed income markets.But how low is low? Could this just be a short lived and relatively meaningless move down in yields or could we see US 10Y yield below 1.46% and US 30Y yield below 2.15%?

Is it still the time to be defensive on equities and have a notable allocation in Bonds as was described in the note from 11 May (see <a href="https://www.smartkarma.com/insights/us-equities-time-to-get-defensive" target="_blank" data-smartkarma-citation="insights:51332" rel="noopener">US Equities: Time to Get Defensive</a>)?Whichever chart we look at across markets - whether in fixed income, commodities, foreign exchange, or equities - the signs are clear…stay long bonds (Treasuries) in this environment for the short term.

Is it still the time to be defensive on equities and have a notable allocation in Bonds as was described in the note from 11 May (see US Equities: Time to Get Defensive)?Whichever chart we look at across markets - whether in fixed income, commodities, foreign exchange, or equities - the signs are clear…stay long bonds (Treasuries) in this environment for the short term.

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Metals and commodities plays have rallied nicely but show signs of a tactical exhaustive top and somewhat crowded positioning. A shakeout is in store as the USD finds a foot but is already in rally mode to a larger degree in Asia and bottoming in EM.WTI and platinum have broken key wedge supports and copper will pullback to macro trendline support.A risk off cycle combined with a USD bounce would inflect metals.

Metals and commodities plays have rallied nicely but show signs of a tactical exhaustive top and somewhat crowded positioning. A shakeout is in store as the USD finds a foot but is already in rally mode to a larger degree in Asia and bottoming in EM.WTI and platinum have broken key wedge supports and copper will pullback to macro trendline support.A risk off cycle combined with a USD bounce would inflect metals. 

United States

Copper is a chemical element with symbol Cu (from Latin: cuprum) and atomic number 29. It is a soft, malleable and ductile metal with very high thermal and electrical conductivity. A freshly exposed surface of pure copper has a reddish-orange color. It is used as a conductor of heat and electricity, as a building material and as a constituent of various metal alloys, such as Sterling silver used in jewelry, cupronickel used to make marine hardware and coins and constantan used in strain gauges and thermocouples for temperature measurement.

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Copper (COPPER COMDTY)

Commodities & Bonds – The Breaks and the Targets

The recent breaks on both industrial commodities and long end bond yields warrants further attention. These charts highlight target areas in the...

Shyam Devani

U.S. Yields Testing Support Ahead Of FOMC Meeting

We continue to see signs of improving risk appetites alongside healthy market dynamics. As a result, our outlook remains constructive.

Vermilion Research

Bonds & Commodities: A Picture Unfolding

The price action in Bonds and the emerging picture in major commodity markets all point towards lower yields. Breaks are yet to be confirmed though...

Shyam Devani

Bonds: All Charts Lead to Me

As we look across financial markets, there is an increasing degree of conviction that higher [US] bond prices and lower yields are likely to be...

Shyam Devani

Crowded Commodities the Next Domino

Metals and commodities show signs of a tactical exhaustive top and somewhat crowded positioning. A shakeout is in store. A risk off cycle combined...

Thomas Schroeder

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