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

Korea Stock Exchange KOSPI 200 / Technical Analysis

Monday's turn call to sell down longs and put on additional shorts panned out. Now we are positioning for a mild bounce into the month/quarter end to lean on shorts. October still expected to see another leg down. Bigger cycle date comes in near October 7-8th.Top shorts in Asia are Korea (due to undershoot on the back of SEC) and HSI (nearing a low) and Taiwan as the recent addition to our short conviction group.A50 flirting with big breakout resistance at 15,500 and will drive H share direction. A shares show potential to buck the region negative trend if the A50 clears 15,500 pivot.

Monday's turn call to sell down longs and put on additional shorts panned out. Now we are positioning for a mild bounce into the month/quarter end to lean on shorts. October still expected to see another leg down. Bigger cycle date comes in near October 7-8th.Top shorts in Asia are Korea (due to undershoot on the back of SEC) and HSI (nearing a low) and Taiwan as the recent addition to our short conviction group.A50 flirting with big breakout resistance at 15,500 and will drive H share direction. A shares show potential to buck the region negative trend if the A50 clears 15,500 pivot.

SPX Trendline Rejection/Asia Short Targets

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

Macroeconomics

The FOMC is all but certain to formally announce the start of "tapering" at its next meeting in 6 weeks time (2-3 November 2021), i.e., the formal end to monthly purchases of US$120 billion of Treasury and agency securities. The FOMC statement after last week's meeting was about as clear as the FOMC ever is: "Last December, the Committee indicated that it would continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward its maximum employment and price stability goals. Since then, the economy has made progress toward these goals. If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted."In reality, a moderation in the pace of asset purchases (as reflected in the overall size of the monetary base) has already occurred. In the latest 3 months, the US monetary base increased by a cumulative US$88 billion (i.e., far below the US$360 billion of total increase in asset purchases promised for that period).  This enabled M2 growth to decelerate notably -- from 20.6% YoY in March 2021 and 14.6% YoY in April to 12% YoY in July 2021. With US real GDP growing 6.3% QoQ (saar) in 1Q 2021 and 6.6% in 2Q 2021, M2 growth of over 20% YoY (following the previous year's 20%-plus growth rates) was clearly excessive. But with M2 decelerating to 12% YoY growth, the severity of upward pressure on prices has begun to ease somewhat -- and core CPI inflation moderated from 4.5% YoY in June 2021 to 4.3% in July and 4% YoY in August 2021. The further reining-in of the monetary base over the next few months (and a complete end to QE asset purchases no later than mid-2022) should contribute to a smooth transition to decelerating M2 (8% YoY by the turn of the year) and slightly lower inflation rates -- although both core-PCE and core-CPI inflation are likely to remain above 3% YoY for the rest of 2021. A gradual tightening of monetary conditions (already underway for 3 months, but being formalized in the period ahead) will steadily push bond yields higher and steepen the yield curve. The predictable steepening of the curve will be positive for banks, and the strengthening economic recovery will boost earnings across the economy. We remain wary of the long-term implications of CAPE (Shiller's cyclically-adjusted P/E ratio), which at 38.3x is at its highest since the 2000 peak. But near-term, the conventional P/E ratio will moderate (from 34x currently), so we are bullish about the equity market for the rest of 2021.

The FOMC is all but certain to formally announce the start of "tapering" at its next meeting in 6 weeks time (2-3 November 2021), i.e., the formal end to monthly purchases of US$120 billion of Treasury and agency securities. The FOMC statement after last week's meeting was about as clear as the FOMC ever is: "Last December, the Committee indicated that it would continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward its maximum employment and price stability goals. Since then, the economy has made progress toward these goals. If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted."In reality, a moderation in the pace of asset purchases (as reflected in the overall size of the monetary base) has already occurred. In the latest 3 months, the US monetary base increased by a cumulative US$88 billion (i.e., far below the US$360 billion of total increase in asset purchases promised for that period).  This enabled M2 growth to decelerate notably -- from 20.6% YoY in March 2021 and 14.6% YoY in April to 12% YoY in July 2021. With US real GDP growing 6.3% QoQ (saar) in 1Q 2021 and 6.6% in 2Q 2021, M2 growth of over 20% YoY (following the previous year's 20%-plus growth rates) was clearly excessive. But with M2 decelerating to 12% YoY growth, the severity of upward pressure on prices has begun to ease somewhat -- and core CPI inflation moderated from 4.5% YoY in June 2021 to 4.3% in July and 4% YoY in August 2021. The further reining-in of the monetary base over the next few months (and a complete end to QE asset purchases no later than mid-2022) should contribute to a smooth transition to decelerating M2 (8% YoY by the turn of the year) and slightly lower inflation rates -- although both core-PCE and core-CPI inflation are likely to remain above 3% YoY for the rest of 2021. A gradual tightening of monetary conditions (already underway for 3 months, but being formalized in the period ahead) will steadily push bond yields higher and steepen the yield curve. The predictable steepening of the curve will be positive for banks, and the strengthening economic recovery will boost earnings across the economy. We remain wary of the long-term implications of CAPE (Shiller's cyclically-adjusted P/E ratio), which at 38.3x is at its highest since the 2000 peak. But near-term, the conventional P/E ratio will moderate (from 34x currently), so we are bullish about the equity market for the rest of 2021. 

US: Moving from Stealth to Formal Taper; Bond Yields Will Gently Rise

SPX rise from early last week is due to run its course and mark a short term top today where we will measure downside price action on the rejection from the underside of broken trendline which can often induce a harder secondary pullback.A wave 5 top is due per color in the intraday pattern.Focus: SPX above or below trendline will drive risk this week and in October.RSI and MACD bear divergence a lurking negative in October. Dip and rally into a bigger top is our preferred sequence.

SPX rise from early last week is due to run its course and mark a short term top today where we will measure downside price action on the rejection from the underside of broken trendline which can often induce a harder secondary pullback.A wave 5 top is due per color in the intraday pattern.Focus: SPX above or below trendline will drive risk this week and in October.RSI and MACD bear divergence a lurking negative in October. Dip and rally into a bigger top is our preferred sequence.

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


Cross Asset Strategy

<ul>
<li>Inflation fears are being fulfilled. High pass-thru of price shocks</li>
<li>Policy-makers will react (wrongly) by hastening ‘tapering’</li>
<li>This may trigger upcoming ‘liquidity crises’, and</li>
<li>Risk sharper World economic slowdown</li>
</ul>


Inflation fears are being fulfilled. High pass-thru of price shocks
Policy-makers will react (wrongly) by hastening ‘tapering’
This may trigger upcoming ‘liquidity crises’, and
Risk sharper World economic slowdown


Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

Despite the prospect of a higher federal funds rate in 2022, the latest Federal Open Market Committee (FOMC) policy statement has been viewed positively by financial markets due to the lack of a specific date to commence tapering asset purchases. The decision to taper will not immediately shift policy settings to neutral, and Chair Powell will be keen to emphasize this point, although much depends on the timing of the first increase in the federal funds rate.
The path of US Treasury yields in 2021 has largely confounded expectations, but recent history suggests that such outcomes are possible due to the behaviour of the term premium in the light of heavy buying by central banks. Aggressive measures by the Fed to keep the corporate bond market open has reduced loan demand in the banking system, thereby forcing banks to buy more Treasury bonds as part of bank credit.
According to the Fed, US households have  been net direct buyers of equities, while net indirect purchases via mutual funds have been negative since 2016. Meanwhile, despite ever-declining expected returns, households' indirect purchases of bonds via mutual funds have been extremely strong since March 2020 when the Fed undertook aggressive easing measures to prevent a global tightening of financial conditions.
While there is uncertainty about the outlook for the US and China, the recovery in the global economy suggests US Treasury yields should be higher than current levels. While bond investors embrace a pessimistic long-term outlook for the US economy, bond bears are basing their assessment on inflation having mean-reverting properties, an outcome that does not stand-up to statistical scrutiny.

Despite the prospect of a higher federal funds rate in 2022, the latest Federal Open Market Committee (FOMC) policy statement has been viewed positively by financial markets due to the lack of a specific date to commence tapering asset purchases. The decision to taper will not immediately shift policy settings to neutral, and Chair Powell will be keen to emphasize this point, although much depends on the timing of the first increase in the federal funds rate.
The path of US Treasury yields in 2021 has largely confounded expectations, but recent history suggests that such outcomes are possible due to the behaviour of the term premium in the light of heavy buying by central banks. Aggressive measures by the Fed to keep the corporate bond market open has reduced loan demand in the banking system, thereby forcing banks to buy more Treasury bonds as part of bank credit.
According to the Fed, US households have  been net direct buyers of equities, while net indirect purchases via mutual funds have been negative since 2016. Meanwhile, despite ever-declining expected returns, households' indirect purchases of bonds via mutual funds have been extremely strong since March 2020 when the Fed undertook aggressive easing measures to prevent a global tightening of financial conditions.
While there is uncertainty about the outlook for the US and China, the recovery in the global economy suggests US Treasury yields should be higher than current levels. While bond investors embrace a pessimistic long-term outlook for the US economy, bond bears are basing their assessment on inflation having mean-reverting properties, an outcome that does not stand-up to statistical scrutiny.

US Treasuries Defy Conventional Wisdom Due to Powerful Buying Forces

United States

The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

S&P 500 INDEX (SPX INDEX)

SPX Trendline Rejection/Asia Short Targets

Monday's turn call to sell down longs and put on additional shorts panned out. Use a month/quarter end bounce to lean on shorts. October to see...

Thomas Schroeder

US: Moving from Stealth to Formal Taper; Bond Yields Will Gently Rise

Base money rose just US$88bn in the latest 3 months, so tapering had begun but will now be formalized. As inflation edges lower but EPS growth...

Prasenjit K. Basu

SPX Turn Resistance Today

SPX rise from early last week is due to run its course and mark a short term top today at the underside of broken trendline which can often induce...

Thomas Schroeder

Bad News Is Closer Than You Think

Markets are too complacent to 'transitory' inflation risks and to the absence of Chinese stimulus. There is a risk of another 'liquidity crisis'...

Michael J. Howell

US Treasuries Defy Conventional Wisdom Due to Powerful Buying Forces

US Treasuries have defied expectations of higher yields since March. Powerful buying by central banks, commercial banks and mutual funds have...

DeSaque Macro Research