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. 

Technical Analysis

Dow Jones Industrial Average / Technical Analysis

Pay attention to rotation currents ahead of a key tactical peak in the US cycle into late July. Our cycle work calls for an SPX and NDX top late this week ahead of a pullback attempt to test pivotal trendline supports.NDX is expected to lose steam as the DJI attempts a breakout and the rotation to monitor that will lift breadth this week.The most important pivot for the global cycle is the NDX price trendline support that currently runs near 14,650 and rises into next week. A clear bull/bear pivot line.Cycle - SPX and NDX moving into a frothy tactical top zone. July 19 onwards favors a weaker seasonal cycle starting to unfold.

Pay attention to rotation currents ahead of a key tactical peak in the US cycle into late July. Our cycle work calls for an SPX and NDX top late this week ahead of a pullback attempt to test pivotal trendline supports.NDX is expected to lose steam as the DJI attempts a breakout and the rotation to monitor that will lift breadth this week.The most important pivot for the global cycle is the NDX price trendline support that currently runs near 14,650 and rises into next week. A clear bull/bear pivot line.Cycle - SPX and NDX moving into a frothy tactical top zone. July 19 onwards favors a weaker seasonal cycle starting to unfold.

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

The FOMC's insistence that inflation is "transitory" looks increasingly delusional. Over the latest 3 months (March-May 2021), the core PCE price index has increased at an annualized pace of 6.4% -- and the core CPI has increased at an annualized 7.6% in those 3 months. While the Fed's median inflation forecast for 2021 rose by 1 percentage point between March and June (to 3.4% YoY), and real GDP growth is projected to be far above trend in 2021 and 2022 (which would normally trigger inflation), the FOMC remains sanguine about inflation in 2022, and hence promises to persist with US$120 billion of asset purchases monthly. 
In our view, the persistence of aggressive monetary expansion is the key cause of the spurt in inflation, and will boost inflation further in the months ahead. M2 money supply grew consistently more than 20% YoY in April 2020-March 2021 (more than double the pace in 2009-10), and was still up 14.5% YoY in April 2021 and 12.9% YoY in May 2021 on a very high base. However, despite the FOMC promising to purchase US$120 billion of bonds monthly, the monetary base declined marginally in May 2021 (admittedly after very rapid increases in the previous 3 months), suggesting that the FOMC is turning more pragmatic in its monetary expansion than its official statements suggest. 
Equity valuations are extremely stretched, as exemplified by a CAPE (cyclically-adjusted P/E) ratio of 38x -- levels only reached once in the past 140 years (in the run-up to the "dot com bubble" that peaked in March 2000). As the inflation prints continue to stay elevated, we expect the Fed to be obliged to incrementally withdraw its monetary accommodation -- first by "tapering" (reducing the size of asset purchases, arguably begun in May 2021), and then by raising the Fed Funds rate to 0.25% (up 12.5bp) by the 2-3 November 2021 FOMC meeting. Incremental tightening actions will cause the over-valued equity market to decline 10% over the next 3-6 months. We recommend being underweight equities and risk assets (including emerging markets). Cyclicals, consumer cyclicals and high-yielding defensive stocks will provide refuge from the storm.

The FOMC's insistence that inflation is "transitory" looks increasingly delusional. Over the latest 3 months (March-May 2021), the core PCE price index has increased at an annualized pace of 6.4% -- and the core CPI has increased at an annualized 7.6% in those 3 months. While the Fed's median inflation forecast for 2021 rose by 1 percentage point between March and June (to 3.4% YoY), and real GDP growth is projected to be far above trend in 2021 and 2022 (which would normally trigger inflation), the FOMC remains sanguine about inflation in 2022, and hence promises to persist with US$120 billion of asset purchases monthly. 
In our view, the persistence of aggressive monetary expansion is the key cause of the spurt in inflation, and will boost inflation further in the months ahead. M2 money supply grew consistently more than 20% YoY in April 2020-March 2021 (more than double the pace in 2009-10), and was still up 14.5% YoY in April 2021 and 12.9% YoY in May 2021 on a very high base. However, despite the FOMC promising to purchase US$120 billion of bonds monthly, the monetary base declined marginally in May 2021 (admittedly after very rapid increases in the previous 3 months), suggesting that the FOMC is turning more pragmatic in its monetary expansion than its official statements suggest. 
Equity valuations are extremely stretched, as exemplified by a CAPE (cyclically-adjusted P/E) ratio of 38x -- levels only reached once in the past 140 years (in the run-up to the "dot com bubble" that peaked in March 2000). As the inflation prints continue to stay elevated, we expect the Fed to be obliged to incrementally withdraw its monetary accommodation -- first by "tapering" (reducing the size of asset purchases, arguably begun in May 2021), and then by raising the Fed Funds rate to 0.25% (up 12.5bp) by the 2-3 November 2021 FOMC meeting. Incremental tightening actions will cause the over-valued equity market to decline 10% over the next 3-6 months. We recommend being underweight equities and risk assets (including emerging markets). Cyclicals, consumer cyclicals and high-yielding defensive stocks will provide refuge from the storm.  

3 Months of MoM Inflation Oblige Stealth Tightening; Overvalued Equities to Fall

Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Chicago Board Options Exchange Volatility Index / Technical Analysis

Chicago Board Options Exchange Volatility Index

Regular readers will know that a useful comparison has been made about the rally in the Dow Jones since last years low with the rally seen from March 2009 to May 2010.A similar comparison has been made between the S&amp;P 500 / Bonds Ratio over the same periods - 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>These comparisons have so far given good guidance about turning defensive on equities over the past month and bullish on Bonds.In a similar fashion, the chart below compares the trends in the VIX Index with the aftermath of the last crisis 11-12 years ago.The similarities in the levels at work are striking and warn of possible complacency in the market place that could lead to much higher levels of volatility than seems to be generally expected.

Regular readers will know that a useful comparison has been made about the rally in the Dow Jones since last years low with the rally seen from March 2009 to May 2010.A similar comparison has been made between the S&amp;P 500 / Bonds Ratio over the same periods - see US Equities: Time to Get DefensiveThese comparisons have so far given good guidance about turning defensive on equities over the past month and bullish on Bonds.In a similar fashion, the chart below compares the trends in the VIX Index with the aftermath of the last crisis 11-12 years ago.The similarities in the levels at work are striking and warn of possible complacency in the market place that could lead to much higher levels of volatility than seems to be generally expected.

In a note 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> on 3 June 2021, it was suggested that US 30 year yield would make it to 1.90%-1.92% area.That target has now been met. However, fresh developments must be taken into account while trying to determine what happens next.

In a note titled Bonds: All Charts Lead to Me on 3 June 2021, it was suggested that US 30 year yield would make it to 1.90%-1.92% area.That target has now been met. However, fresh developments must be taken into account while trying to determine what happens next.

The picture on the Dow Jones Industrials Average is unfolding in a manner that is still similar to that seen a year after the last major crisis almost a decade ago - and it is troublesome in the short run.One way or another, in whichever strange ways, history has a way of somehow reflecting it’s previous shades. A year after the lows, the stock market today is once again showing signs of short term vulnerability as it did in 2010, a year after the stock market low of March 2009.Perhaps the leading signs are seen on the Dow Transportation Average which has already declined notably since the first half of May. Any lower on either the Transports or the Industrials would amount to significant bearish breaks that would argue for 6%-9% declines from current levels depending on which average we choose to look at.Perhaps it was bad timing for the Fed to be hawkish this month. Or this is a reaction to the Fed’s hawkishness itself. Either way, should this bearish picture on the Dow, as well as the bearish ones in most commodity markets, unfold, expect the Fed to “back track” on some of its recent messages.

The picture on the Dow Jones Industrials Average is unfolding in a manner that is still similar to that seen a year after the last major crisis almost a decade ago - and it is troublesome in the short run.One way or another, in whichever strange ways, history has a way of somehow reflecting it’s previous shades. A year after the lows, the stock market today is once again showing signs of short term vulnerability as it did in 2010, a year after the stock market low of March 2009.Perhaps the leading signs are seen on the Dow Transportation Average which has already declined notably since the first half of May. Any lower on either the Transports or the Industrials would amount to significant bearish breaks that would argue for 6%-9% declines from current levels depending on which average we choose to look at.Perhaps it was bad timing for the Fed to be hawkish this month. Or this is a reaction to the Fed’s hawkishness itself. Either way, should this bearish picture on the Dow, as well as the bearish ones in most commodity markets, unfold, expect the Fed to “back track” on some of its recent messages.

United States

The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. It has been a widely followed indicator of the stock market since October 1, 1928.

Dow Jones Industrial Average (INDU INDEX)

Dow Jones Industrial Average (INDU INDEX)

DJI Rotation as Tech Tops

NDX is touted to lose steam as the DJI attempts a rotation breakout. Our cycle work warns of an SPX and NDX top late this week ahead of a pullback...

Thomas Schroeder

3 Months of MoM Inflation Oblige Stealth Tightening; Overvalued Equities to Fall

Core PCE rose 6.4% annualized in Mar-May 2021; despite FOMC promises to persist with large QE, base money contracted in May 2021, & more tightening...

Prasenjit K. Basu

VIX Index: How Concerned Should We Be?

The signs on the VIX Index not only show a historical similarity to the aftermath of the last crisis but also complement the bearish signs seen on...

Shyam Devani

US 30 Year Yield: Target Met, What Next?

The 1.92% target on US 30 year yield has been met. However in the context of recent market developments, there still appears to be the danger of...

Shyam Devani

US Equities: Dow Troubles

The Dow is in trouble whether looked at independently, with the Dow Transports, or taken from an historical trend perspective. Watch these levels...

Shyam Devani