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

DXY weekly cycle is breaking down on the back of non confirmation in trending indicators and the break of rising wedge support (falling wedge resistance the case of the Euro). Fresh Euro buy support lies near or just under 1.13.This webcast outlines what currencies in Asia we are trading a USD bounce and where to set intermediate short levels with a focus in the USD/SGD and USD/KRW near respective resistance points at 1.36 and 1,170.USD/THB is moving into a more strategic low and leading the USD bottom cycle in Asia with a focus on the 30.50 level. We closed our short from 32.00.EM FX short term lows are visible in a number of 5 wave counts that call for a dollar bounce and one that sets up a short in line with our DXY shift. We like the CAD on a USD bounce as the top commodity currency.Strategy points – Euro above 1.13 is bearish DXY (below 96.50). Weekly DXY cycle rolling over and calls for selling USD rallies. Sterling may have difficulty at 1.28. USD/JPY 109/108 pivotal for global risk (keep in mind the USD/JPY bearish formation is of a macro degree). US 10yr yield looks very oversold into weakness below 2% and may be a variable that helps the USD bounce near term. Our bet is for a bounce to 2.18% with scope to 2.30% (remain macro bearish yield to 1.62%).

DXY weekly cycle is breaking down on the back of non confirmation in trending indicators and the break of rising wedge support (falling wedge resistance the case of the Euro). Fresh Euro buy support lies near or just under 1.13.This webcast outlines what currencies in Asia we are trading a USD bounce and where to set intermediate short levels with a focus in the USD/SGD and USD/KRW near respective resistance points at 1.36 and 1,170.USD/THB is moving into a more strategic low and leading the USD bottom cycle in Asia with a focus on the 30.50 level. We closed our short from 32.00.EM FX short term lows are visible in a number of 5 wave counts that call for a dollar bounce and one that sets up a short in line with our DXY shift. We like the CAD on a USD bounce as the top commodity currency.Strategy points – Euro above 1.13 is bearish DXY (below 96.50). Weekly DXY cycle rolling over and calls for selling USD rallies. Sterling may have difficulty at 1.28. USD/JPY 109/108 pivotal for global risk (keep in mind the USD/JPY bearish formation is of a macro degree). US 10yr yield looks very oversold into weakness below 2% and may be a variable that helps the USD bounce near term. Our bet is for a bounce to 2.18% with scope to 2.30% (remain macro bearish yield to 1.62%).

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

<ul>
<li>KOSPI is up 1.3% YTD. KRW has depreciated 5.6% versus USD YTD.</li>
<li>Nikkei is up 2.0% YTD. Yen has appreciated 1.3% versus USD YTD. </li>
</ul>In the past week, the following reports that are relevant for Japan and Korea have received a lot of interest among Smartkarma readers:<ul>
<li><a href="https://www.smartkarma.com/insights/big-tokyo-electron-buyback" target="_blank" data-smartkarma-citation="insights:30076">Big Tokyo Electron Buyback</a></li>
<li><a href="https://www.smartkarma.com/insights/nexon-sale-main-bidding-round-summary" target="_blank" data-smartkarma-citation="insights:30176">Nexon Sale: Main Bidding Round Summary</a></li>
<li><a href="https://www.smartkarma.com/insights/fiat-chrysler-proposes-merger-with-renault-lotsa-moving-parts-but-rno-too-cheap" target="_blank" data-smartkarma-citation="insights:30068">Fiat-Chrysler Proposes Merger with Renault - Lotsa Moving Parts But RNO Too Cheap</a></li>
<li><a href="https://www.smartkarma.com/insights/softbank-group-this-is-the-right-time-to-launch-a-second-vision-fund" target="_blank" data-smartkarma-citation="insights:30089">Softbank Group: This Is the Right Time to Launch a Second Vision Fund</a></li>
<li><a href="https://www.smartkarma.com/insights/nexon-sale-bidding-progress-update" target="_blank" data-smartkarma-citation="insights:30080">Nexon Sale: Bidding Progress Update</a></li>
</ul>


KOSPI is up 1.3% YTD. KRW has depreciated 5.6% versus USD YTD.
Nikkei is up 2.0% YTD. Yen has appreciated 1.3% versus USD YTD. 
In the past week, the following reports that are relevant for Japan and Korea have received a lot of interest among Smartkarma readers:
Big Tokyo Electron Buyback
Nexon Sale: Main Bidding Round Summary
Fiat-Chrysler Proposes Merger with Renault - Lotsa Moving Parts But RNO Too Cheap
Softbank Group: This Is the Right Time to Launch a Second Vision Fund
Nexon Sale: Bidding Progress Update


Smartkarma’s Week That Was in JP/​​​​​​​​​KR: Tokyo Electron, Suruga Bank, & Depreciating KRW

In April we pinpointed weakening US equity breadth as a dire warning of a peak in US equities (started shorting weaker underperform sectors) as well as our SOX-NDX-SPX domino cascade call that would lead to a downturn. This topping sequence was outlined on April 29 <a href="https://www.smartkarma.com/insights/sox-cracks-that-would-impact-the-global-tech-cycle" target="_blank" data-smartkarma-citation="insights:29471">SOX Cracks that Would Impact the Global Tech Cycle</a> and again on May 23 <a href="https://www.smartkarma.com/insights/sox-bleed-into-ndx-spx-and-global-tech-playing-out" target="_blank" data-smartkarma-citation="insights:29999">SOX Bleed into NDX, SPX and Global Tech Playing Out</a> .We now see more ominous signals unfolding that could induce a near term flash crash.Plunging bond yields, weak oil, weakening US equity breadth, USD/JPY triangle breakdown risk, gold perking up and subdued volatility are all variables culminating into a perfect storm as Trump wields his tariff saber.Charts pinpoint downside inflection triggers that would see a continueation of our bleed from tech into the SPX and the global risk cycle.

In April we pinpointed weakening US equity breadth as a dire warning of a peak in US equities (started shorting weaker underperform sectors) as well as our SOX-NDX-SPX domino cascade call that would lead to a downturn. This topping sequence was outlined on April 29 SOX Cracks that Would Impact the Global Tech Cycle and again on May 23 SOX Bleed into NDX, SPX and Global Tech Playing Out .We now see more ominous signals unfolding that could induce a near term flash crash.Plunging bond yields, weak oil, weakening US equity breadth, USD/JPY triangle breakdown risk, gold perking up and subdued volatility are all variables culminating into a perfect storm as Trump wields his tariff saber.Charts pinpoint downside inflection triggers that would see a continueation of our bleed from tech into the SPX and the global risk cycle.

<a href="https://www.smartkarma.com/entities/jpy" target="_blank" data-smartkarma-citation="entities:22826:1">JPY (USDJPY CURNCY)</a> has formed a high conviction triangle pattern with odds favoring a bearish downside break that will inflect global risk appetite. This comes on the back of our call for risk aversion below NDX 7,700 as a warning of the SOX-NDX-SPX domino decline.Weekly MACD triangles are the most powerful chart cycles/patterns that are followed by high momentum breakouts.A stronger yen will crater risk appetite that is already in a vulnerable position with the break below SPX 2,800 support. Japanese equities are now vulnerable to a hard break down after breaking critical support at 20,700 particularly in light of the fact that the whole rise from December 2018 is viewed as a counter trend rally. We are now resuming the macro course.Our short focus in Japan has been and remains Japanese banks.

JPY (USDJPY CURNCY) has formed a high conviction triangle pattern with odds favoring a bearish downside break that will inflect global risk appetite. This comes on the back of our call for risk aversion below NDX 7,700 as a warning of the SOX-NDX-SPX domino decline.Weekly MACD triangles are the most powerful chart cycles/patterns that are followed by high momentum breakouts.A stronger yen will crater risk appetite that is already in a vulnerable position with the break below SPX 2,800 support. Japanese equities are now vulnerable to a hard break down after breaking critical support at 20,700 particularly in light of the fact that the whole rise from December 2018 is viewed as a counter trend rally. We are now resuming the macro course.Our short focus in Japan has been and remains Japanese banks.

JPY Macro Support Break Will Add to Global Risk Pressures

'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

<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/182/original/2019-04-29_12-24-09.png?1556508262" class="editor-image img-responsive" data-smartkarma-image-id="86182"></figure>Source: Japan Analytics
</div>EARLY DAYS - In the last seven trading days, 473 Japanese companies have reported quarterly results, 11% of the 3,830 that are currently listed. Of this 76 % have been annual results for the fiscal year ended March 2019.  Also, there have been 328 initial forecasts for the year to March 2020, 227 initial interim forecasts and 228 intra-year revisions. With the long holiday break, there will be an avalanche of announcements from the 7th May onwards. In this Insight, we shall look at the trends apparent in the results so far released.  In the last month, our Market Composite trailing-twelve-month (TTM) data series is unchanged for Operating Income, while Net Income has increased by ¥0.2t. With 13% of March-year-end companies have issued FY2020 forecasts, aggregate forecast Operating Income is ¥0.7t lower and is in line with TTM Operating Income. Forecast Net Income is ¥0.6 lower and is 4% below TTM Net Income. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/411/original/2019-04-30_13-26-24.png?1556598396" class="editor-image img-responsive" data-smartkarma-image-id="86411"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/412/original/File%202019-04-30%2013%2010%2017.jpeg?1556598417" class="editor-image img-responsive" data-smartkarma-image-id="86412"></figure><div class="content-caption">Source: Japan Analytics, Pictet Asset Management</div>MARGIN SLIPPAGE - With revenues remaining relatively robust, margins are declining fast that at any time since 2016. The forecast operating margin is now 42 basis points below the 2018 peak level, while the slippage in net margins is 78 basis points. Although the sample is not the same, to IBES consensus estimates have current downtrend bottoming out in the second half of the year with net margins recovering to 6.6% in 2021. We consider this overly optimistic. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/187/original/2019-04-29_12-32-53.png?1556508784" class="editor-image img-responsive" data-smartkarma-image-id="86187"></figure><div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/190/original/2019-04-29_12-51-24.png?1556509893" class="editor-image img-responsive" data-smartkarma-image-id="86190"></figure>Source: Japan Analytics
</div>RESULTS &amp; REVISION SCORES - Our scoring methodology for results and forecasts/revisions incorporates rates of change and other momentum factors and has historically provided a better fit with changes in aggregate market value. Although the Market Composite Results Score has remained stable in the last week at 2.21, we expect the score to end this results 'season' closer to zero as indicated by the trend in the Forecast/Revision Score. The latter has declined for six quarters in a row and the current quarter will make it seven. Although our data series only covers the last forty quarters and is perhaps too short for generalisations, it would be unusual for the Forecasts/Revision Score series to have an eighth down quarter in a row. Perhaps the market's robust recovery from the Christmas Day low is anticipating such an outcome. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/193/original/2019-04-29_13-17-03.png?1556511439" class="editor-image img-responsive" data-smartkarma-image-id="86193"></figure><div class="content-caption">Source: Japan Analytics</div>USDJPY NEUTRAL - In the past, one of the principal drivers of both scores has been changes in the US dollar/Yen exchange rate. The chart above merges both scores to create a cleaner timeline, and key turning points in <a href="https://www.smartkarma.com/entities/22826" target="_blank" data-smartkarma-citation="entities:22826:1">JUSDJPY CURNCY</a> highlighted. With the currency cross trading in a narrow range, there is little support or stimulus in the next six months. However, any sustained weakness in the Yen, such as occurred from September 2016, will be another confirmation that a cycle low has been reached. <div class="content-highlight">In the DETAIL section below, we update our  Sector Results &amp; Revision Scores and look at the best and worst large-cap company results over the seven trading days.</div>


Source: Japan Analytics
EARLY DAYS - In the last seven trading days, 473 Japanese companies have reported quarterly results, 11% of the 3,830 that are currently listed. Of this 76 % have been annual results for the fiscal year ended March 2019.  Also, there have been 328 initial forecasts for the year to March 2020, 227 initial interim forecasts and 228 intra-year revisions. With the long holiday break, there will be an avalanche of announcements from the 7th May onwards. In this Insight, we shall look at the trends apparent in the results so far released.  In the last month, our Market Composite trailing-twelve-month (TTM) data series is unchanged for Operating Income, while Net Income has increased by ¥0.2t. With 13% of March-year-end companies have issued FY2020 forecasts, aggregate forecast Operating Income is ¥0.7t lower and is in line with TTM Operating Income. Forecast Net Income is ¥0.6 lower and is 4% below TTM Net Income. Source: Japan Analytics, Pictet Asset ManagementMARGIN SLIPPAGE - With revenues remaining relatively robust, margins are declining fast that at any time since 2016. The forecast operating margin is now 42 basis points below the 2018 peak level, while the slippage in net margins is 78 basis points. Although the sample is not the same, to IBES consensus estimates have current downtrend bottoming out in the second half of the year with net margins recovering to 6.6% in 2021. We consider this overly optimistic. 
Source: Japan Analytics
RESULTS &amp; REVISION SCORES - Our scoring methodology for results and forecasts/revisions incorporates rates of change and other momentum factors and has historically provided a better fit with changes in aggregate market value. Although the Market Composite Results Score has remained stable in the last week at 2.21, we expect the score to end this results 'season' closer to zero as indicated by the trend in the Forecast/Revision Score. The latter has declined for six quarters in a row and the current quarter will make it seven. Although our data series only covers the last forty quarters and is perhaps too short for generalisations, it would be unusual for the Forecasts/Revision Score series to have an eighth down quarter in a row. Perhaps the market's robust recovery from the Christmas Day low is anticipating such an outcome. Source: Japan AnalyticsUSDJPY NEUTRAL - In the past, one of the principal drivers of both scores has been changes in the US dollar/Yen exchange rate. The chart above merges both scores to create a cleaner timeline, and key turning points in JUSDJPY CURNCY highlighted. With the currency cross trading in a narrow range, there is little support or stimulus in the next six months. However, any sustained weakness in the Yen, such as occurred from September 2016, will be another confirmation that a cycle low has been reached. In the DETAIL section below, we update our  Sector Results &amp; Revision Scores and look at the best and worst large-cap company results over the seven trading days.

🇯🇵 Japan • Spring Results & Revisions Flash - Early Days

Japan

The Japanese yen is the official currency of Japan. 

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

JPY (USDJPY CURNCY)

Where to Sell the USD Post Bounce

DXY weekly cycle is breaking down on the back of non confirmation in trending indicators and the break of rising wedge support (falling wedge...

Thomas Schroeder

Smartkarma’s Week That Was in JP/KR: Tokyo Electron, Suruga Bank, & Depreciating KRW

KOSPI is up 1.3% YTD. KRW has depreciated 5.6% versus USD YTD. Nikkei is up 2.0% YTD. Yen has appreciated 1.3% versus USD YTD. In the past week,...

Douglas Kim

Equity Flash Crash Markers

In April we pinpointed weakening US equity breadth as a dire warning of a peak in US equities (started shorting weaker underperform sectors) as...

Thomas Schroeder

JPY Macro Support Break Will Add to Global Risk Pressures

JPY (USDJPY CURNCY) has formed a high conviction triangle pattern with odds favoring a bearish downside break that will inflect global risk...

Thomas Schroeder

🇯🇵 Japan • Spring Results & Revisions Flash - Early Days

EARLY DAYS - In the last seven trading days, 473 Japanese companies have reported quarterly results, 11% of the 3,830 that are currently listed. Of...

Campbell Gunn

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Where to Sell the USD Post Bounce

DXY weekly cycle is breaking down on the back of non confirmation in trending indicators and the break of rising wedge support (falling wedge...

Thomas Schroeder

Smartkarma’s Week That Was in JP/​​​​​​​​​KR: Tokyo Electron, Suruga Bank, & Depreciating KRW

KOSPI is up 1.3% YTD. KRW has depreciated 5.6% versus USD YTD. Nikkei is up 2.0% YTD. Yen has appreciated 1.3% versus USD YTD. In the past week,...

Douglas Kim

Equity Flash Crash Markers

In April we pinpointed weakening US equity breadth as a dire warning of a peak in US equities (started shorting weaker underperform sectors) as...

Thomas Schroeder

JPY Macro Support Break Will Add to Global Risk Pressures

JPY (USDJPY CURNCY) has formed a high conviction triangle pattern with odds favoring a bearish downside break that will inflect global risk...

Thomas Schroeder

🇯🇵 Japan • Spring Results & Revisions Flash - Early Days

EARLY DAYS - In the last seven trading days, 473 Japanese companies have reported quarterly results, 11% of the 3,830 that are currently listed. Of...

Campbell Gunn

Smartkarma’s Week That Was in JP/KR: Tokyo Electron, Suruga Bank, & Depreciating KRW