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

<a href="https://www.smartkarma.com/entities/u-s-dollar-index-usdx" target="_blank" rel="noopener" data-smartkarma-citation="entities:26018:1">US Dollar Index (DXY) (DXY CURNCY)</a> continues its grind higher as non confirmation bear divergence matures to the point where an inflection top is taking shape.RSI and MACD non confirmations are maturing to the point of inflection into the next USD push higher near DXY 99.80. Indicator non confirmations (bear divergence) warn of tops as the bulk or market participants are long the USD (or short Euro) amid waning upside momentum (clear choppy overlap is indicative of indecision).Euro bear wedge mirrors the DXY rising grind and is drifting into lower wedge support and buy zone for an upside test.USD/JPY 106.70 represent the bull/bear pivot line for the JPY, global risk and the Nikkei.

US Dollar Index (DXY) (DXY CURNCY) continues its grind higher as non confirmation bear divergence matures to the point where an inflection top is taking shape.RSI and MACD non confirmations are maturing to the point of inflection into the next USD push higher near DXY 99.80. Indicator non confirmations (bear divergence) warn of tops as the bulk or market participants are long the USD (or short Euro) amid waning upside momentum (clear choppy overlap is indicative of indecision).Euro bear wedge mirrors the DXY rising grind and is drifting into lower wedge support and buy zone for an upside test.USD/JPY 106.70 represent the bull/bear pivot line for the JPY, global risk and the Nikkei.

DXY Exhaustive Reach as Non Confirmations Mature

Key sector break points in small caps and transports outlined in our <a href="https://www.smartkarma.com/insights/core-us-sector-weakness-triple-tops-mirror-late-2018-with-tail-risk" target="_blank" rel="noopener" data-smartkarma-citation="insights:31861">Core US Sector Weakness/Triple Tops Mirror Late 2018 with Tail Risk</a> insight are under pressure and in line with our bear call into September. Sector breaks are front running the fresh bear cycle in tech as the NDX under performs and breaks any remaining market support outside of defensives which will start to buckle. Crashes tend to unfold when these final stall worth's implode.SPX flat range was touted to break lower into September from the failure below SPX 2,930-50 (our fresh short zone).A hard press lower in September has been our base case that sets up at least a tactical low. What if we start to see weaker hard date past September as the trade war heats up further? The weekly MACD cycle will give clear signals of extended weakness into late 2019 if we see downside momentum build in the weekly MACD which is just starting to roll over (key to a high momentum decline), representing phase II risk of the July peak cycle. The weekly MACD holds clues as the degree of downside risk measured by momentum and odds of break backswing support and the inflection pivot are associated with overshoot plunges.USD/JPY bearish MACD triangulation shows strong downside risk or risk aversion with a similar set up to US yields in late 2018 when we flagged a major decline.

Key sector break points in small caps and transports outlined in our Core US Sector Weakness/Triple Tops Mirror Late 2018 with Tail Risk insight are under pressure and in line with our bear call into September. Sector breaks are front running the fresh bear cycle in tech as the NDX under performs and breaks any remaining market support outside of defensives which will start to buckle. Crashes tend to unfold when these final stall worth's implode.SPX flat range was touted to break lower into September from the failure below SPX 2,930-50 (our fresh short zone).A hard press lower in September has been our base case that sets up at least a tactical low. What if we start to see weaker hard date past September as the trade war heats up further? The weekly MACD cycle will give clear signals of extended weakness into late 2019 if we see downside momentum build in the weekly MACD which is just starting to roll over (key to a high momentum decline), representing phase II risk of the July peak cycle. The weekly MACD holds clues as the degree of downside risk measured by momentum and odds of break backswing support and the inflection pivot are associated with overshoot plunges.USD/JPY bearish MACD triangulation shows strong downside risk or risk aversion with a similar set up to US yields in late 2018 when we flagged a major decline.

SPX Risk of Fallout past September Hinges on Weekly Cycle Momentum

In this webcast we update levels and momentum triggers in our base case bear scenario post Fed and below SPX 2,950. We started shorting weaker parts of Asia and Europe after the G20 ahead of an SPX cycle peak due in Late July. Our work called for shorting weaker US sectors and the NDX at 8,000 as core sector were due to resume the underperform cycle with tech the last leg of support to break lower.USD/CNH above 7 is a game changer for Asian equity risk and FX. Upside targets are meaningful with 7.04 dip support and a trailing stop below 7.0. We have been USD long from 6.82. Outflows from Asian equities will only exacerbate the decline in process. USD/JPY bear call is one of our higher conviction patterns as the weekly triangle breaks lower with targets at 102 and a reach for 99. This in turn is inflecting the Nikkei. Korea has been the downside leader and now seeing Taiwan and Singapore follow.Gold is resuming its ascend and will see support transition from lower yields to risk aversion.Weaker equity seasonality plays a role into a hard decline into September if not October.

In this webcast we update levels and momentum triggers in our base case bear scenario post Fed and below SPX 2,950. We started shorting weaker parts of Asia and Europe after the G20 ahead of an SPX cycle peak due in Late July. Our work called for shorting weaker US sectors and the NDX at 8,000 as core sector were due to resume the underperform cycle with tech the last leg of support to break lower.USD/CNH above 7 is a game changer for Asian equity risk and FX. Upside targets are meaningful with 7.04 dip support and a trailing stop below 7.0. We have been USD long from 6.82. Outflows from Asian equities will only exacerbate the decline in process. USD/JPY bear call is one of our higher conviction patterns as the weekly triangle breaks lower with targets at 102 and a reach for 99. This in turn is inflecting the Nikkei. Korea has been the downside leader and now seeing Taiwan and Singapore follow.Gold is resuming its ascend and will see support transition from lower yields to risk aversion.Weaker equity seasonality plays a role into a hard decline into September if not October.

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Quantitative Analysis

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/809/original/2019-08-04_13-24-01.png?1564892655" class="editor-image img-responsive" data-smartkarma-image-id="94809"></figure><div class="content-caption">Source: Japan Analytics</div>SOUTHBOUND - Two weeks into the announcements of the June quarter-end period, it is clear that the momentum of Japanese listed corporate earnings is still heading lower. Since July 22nd, 1,216 or 32% of companies have reported results and 292 forecast revisions have been announced. The Japan Analytics Results &amp; Revision Score reached a new 28-month low on Friday of 1.43, a decline of 78% from the current cycle peak of 6.50 on 16th November 2017. The correlation between the Score and the Market Capitalisation of listed companies excluding REITs is 0.77, and the Score is more of a leading or co-incident than lagging indicator.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/810/original/2019-08-04_13-32-15.png?1564893149" class="editor-image img-responsive" data-smartkarma-image-id="94810"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/812/original/2019-08-04_13-39-03.png?1564893556" class="editor-image img-responsive" data-smartkarma-image-id="94812"></figure><div class="content-caption">Source: Japan Analytics</div>BREAKDOWN - The Results &amp; Revision Score is a weighted sum of three components, the Results Score, the Annual Forecast/Revision Score and the Interim Forecast/Revision Score, with the last of these only being applicable for nine months of each year. The two Forecast/Revision Scores are, as would be expected., leading indicators for the Results Score. The current quarter's Results Scor decline already exceeds the previous quarter's more-benign decline which also saw an increase in the Annual Forecast/Revision Score as the majority of companies 'rolled' their forecast ahead by one year. In contrast, the forecasts for the Interim period which for most companies ends next month were the most pessimistic since April 2016 and the mostly first-quarter results are confirming the early caution. In addition, full-year forecasts are also being downgraded and are at the lowest level for three months.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/816/original/2019-08-04_13-44-46.png?1564893904" class="editor-image img-responsive" data-smartkarma-image-id="94816"></figure><div class="content-caption">Source: Japan Analytics</div>YEN DRIVER - The key driver of the Results &amp; Revision Score has been the year-on-year change in the US dollar/Yen exchange rate lagged by six months. The major turning points in <a href="https://www.smartkarma.com/entities/22826" target="_blank" data-smartkarma-citation="entities:22826:1" rel="noopener">JUSDJPY CURNCY</a> over the last twelve years highlighted above line up well with changes in the direction of earnings momentum as represented by the Results &amp; Revision Score. With the Yen having reverted to a period of strengthening in recent weeks, the trend in the Score will be downwards over the next six months, which will be reflected in due course by the market.    <div class="content-highlight">In the DETAIL section below, we update our Market Composite Results Timeline, Sector and Peer Group Results &amp; Revision Scores, Sector Performance and Valuation and look at the best and worst large-cap individual company results over the last two weeks. In the meantime, we lighten the mood with a classic Allman Brother track featuring the incomparable Dicky Betts.</div><center></center><div class="content-caption">The Allman Brothers Band - Southbound - 1/16/1982 - University Of Florida Bandshell</div>

Source: Japan AnalyticsSOUTHBOUND - Two weeks into the announcements of the June quarter-end period, it is clear that the momentum of Japanese listed corporate earnings is still heading lower. Since July 22nd, 1,216 or 32% of companies have reported results and 292 forecast revisions have been announced. The Japan Analytics Results &amp; Revision Score reached a new 28-month low on Friday of 1.43, a decline of 78% from the current cycle peak of 6.50 on 16th November 2017. The correlation between the Score and the Market Capitalisation of listed companies excluding REITs is 0.77, and the Score is more of a leading or co-incident than lagging indicator.Source: Japan AnalyticsBREAKDOWN - The Results &amp; Revision Score is a weighted sum of three components, the Results Score, the Annual Forecast/Revision Score and the Interim Forecast/Revision Score, with the last of these only being applicable for nine months of each year. The two Forecast/Revision Scores are, as would be expected., leading indicators for the Results Score. The current quarter's Results Scor decline already exceeds the previous quarter's more-benign decline which also saw an increase in the Annual Forecast/Revision Score as the majority of companies 'rolled' their forecast ahead by one year. In contrast, the forecasts for the Interim period which for most companies ends next month were the most pessimistic since April 2016 and the mostly first-quarter results are confirming the early caution. In addition, full-year forecasts are also being downgraded and are at the lowest level for three months.Source: Japan AnalyticsYEN DRIVER - The key driver of the Results &amp; Revision Score has been the year-on-year change in the US dollar/Yen exchange rate lagged by six months. The major turning points in JUSDJPY CURNCY over the last twelve years highlighted above line up well with changes in the direction of earnings momentum as represented by the Results &amp; Revision Score. With the Yen having reverted to a period of strengthening in recent weeks, the trend in the Score will be downwards over the next six months, which will be reflected in due course by the market.    In the DETAIL section below, we update our Market Composite Results Timeline, Sector and Peer Group Results &amp; Revision Scores, Sector Performance and Valuation and look at the best and worst large-cap individual company results over the last two weeks. In the meantime, we lighten the mood with a classic Allman Brother track featuring the incomparable Dicky Betts.The Allman Brothers Band - Southbound - 1/16/1982 - University Of Florida Bandshell

🇯🇵 Japan • Summer Results & Revisions First Cut - Southbound

Our base case called for a Fed induced rise to SPX 3,023 with risk to 3,050 to trim longs and put on short (sell the fact) exposure as a hedge for a second press on 2,970/50 pivot support. Below 2,950 would be a bigger negative signal as we move into the seasonally weak August to October period. More importantly core sectors remain weak and teetering on a fresh underperform cycles in the DJI, transports, small caps and banks. Proofing the weaker sectors was a vital ingredient in identifying increased odds of the current rise being unsustainable.SPX 3,023 is now a firmer resistance with 2,950 as the bull/bear line in the sand. This webcast outlines action levels in the SPX, Russell short entry and the probe to short the NDX. USD remains well bid as the Euro cracks the 1.11 key support. Europe is the space to lean on shorts ahead of an SPX break below 2,950.Asia - Already short via HK, STI, Korea, Taiwan and India. ASX the long O/P and defensives. A50 sell strength was our mantra. India's Nifty is close to bounce support but remains a macro sell on rallies. Nikkei bias improves marginally with the USD/JPY above 109 (to 110.50 fresh turn resistance).

Our base case called for a Fed induced rise to SPX 3,023 with risk to 3,050 to trim longs and put on short (sell the fact) exposure as a hedge for a second press on 2,970/50 pivot support. Below 2,950 would be a bigger negative signal as we move into the seasonally weak August to October period. More importantly core sectors remain weak and teetering on a fresh underperform cycles in the DJI, transports, small caps and banks. Proofing the weaker sectors was a vital ingredient in identifying increased odds of the current rise being unsustainable.SPX 3,023 is now a firmer resistance with 2,950 as the bull/bear line in the sand. This webcast outlines action levels in the SPX, Russell short entry and the probe to short the NDX. USD remains well bid as the Euro cracks the 1.11 key support. Europe is the space to lean on shorts ahead of an SPX break below 2,950.Asia - Already short via HK, STI, Korea, Taiwan and India. ASX the long O/P and defensives. A50 sell strength was our mantra. India's Nifty is close to bounce support but remains a macro sell on rallies. Nikkei bias improves marginally with the USD/JPY above 109 (to 110.50 fresh turn resistance).

Japan

The Japanese yen is the official currency of Japan. 

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JPY (USDJPY CURNCY)

DXY Exhaustive Reach as Non Confirmations Mature

US Dollar Index (DXY) (DXY CURNCY) continues its grind higher as non confirmation bear divergence matures to the point where an inflection top is...

Thomas Schroeder

SPX Risk of Fallout past September Hinges on Weekly Cycle Momentum

Key sector break points in small caps and transports outlined in our Core US Sector Weakness/Triple Tops Mirror Late 2018 with Tail Risk insight...

Thomas Schroeder

Risk Ripples Below SPX 2950

In this webcast we update levels and momentum triggers in our base case bear scenario post Fed and below SPX 2,950. We started shorting weaker...

Thomas Schroeder

🇯🇵 Japan • Summer Results & Revisions First Cut - Southbound

SOUTHBOUND - Two weeks into the announcements of the June quarter-end period, it is clear that the momentum of Japanese listed corporate earnings...

Campbell Gunn

Post Fed Fade from SPX 3,023 Turn Level

Our base case called for a Fed induced rise to SPX 3,023 with risk to 3,050 to trim longs and put on short (sell the fact) exposure as a hedge for...

Thomas Schroeder

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