Economist

Richard Iley

Macroeconomics

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At 2.6% q/q SAAR,<a href="https://www.bea.gov/newsreleases/national/gdp/2018/pdf/gdp4q17_adv.pdf" target="_blank"> the advance estimate of US Q4 GDP</a> was superficially disappointing but the more the data are dug into, the better they look. Private-sector domestic demand (what maters most for equities) in fact surged on some measures at its fastest pace in over a decade. Booming domestic demand sucking in imports at close to their fastest pace in a decade was the dominant factor crimping headline growth. 
The key metric to focus on in the GDP report is final sales to private domestic…
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At 2.6% q/q SAAR, the advance estimate of US Q4 GDP was superficially disappointing but the more the data are dug into, the better they look. Private-sector domestic demand (what maters most for equities) in fact surged on some measures at its fastest pace in over a decade. Booming domestic demand sucking in imports at close to their fastest pace in a decade was the dominant factor crimping headline growth. 
The key metric to focus on in the GDP report is final sales to private domestic…


Managing Director, MTS Research

Peter Beuttell

Managing Director

MTS Research

MTS Research Limited is an independent investment research company specialising in technical analysis. 

MTS Research provides technical analysis services in the form of regular publications and consultancy advice, catering for a number of different investment approaches from absolute or relative returns to long-only and long/short.  The company has a global client base of blue-chip financial institutions ranging in size and stretching from Los Angeles to Tokyo, via New York, London, Frankfurt and Hong Kong.  

MTS was founded in 1989 at the request of Morgan Grenfell Investment Services Limited (MGIS), the ERISA arm of Morgan Grenfell Asset Management (subsequently Deutsche Asset Management), by Peter Beuttell, a Portfolio Manager at MGIS between 1987 and 1989. 

Peter is a qualified Chartered Accountant and self-taught market technician with over 30 years experience.  At MGIS, Peter managed money in European, Australasian and Far East markets for US clients, such as American Airlines and American Petrofina.  He achieved first quartile perfomance on their behalf by blending fundamental and technical analysis in his investment decision-making.  

After an initial focus on the EAFE markets (Europe, Australasia and Far East), the company has recently expanded its coverage to include the Americas, thanks to the recently-completed two-year Knowledge Transfer Partnership with the University of Plymouth.  The resulting software – the Technical Overlay Program (TOP) – allows fund managers to access an immediate Technical view on any market, sector, stock, bond yield, currency or commodity within their selected universe.

MTS Research consists of a team of five based in Penzance and London. 

Technical Analysis

A 120-year History of Extreme Momentum: Is this month’s 30-year record reading in the World Index a sign of bullish acceleration, or bearish exhaustion? This is a very rare event, so what does history tell us?Firstly, that this is a unique juncture in market history, at least in more modern times.Since the inception of the Dow indices in 1897, no bull market has produced this much momentum this late in the cycle. I therefore view it as more likely that the market is in the throes of a buying climax, but one which is not quite complete. A 6% rise from the close when the 8-week RSI hit the 75% mark would put SPX at 3,003 and MXWD at 561.  (The stats in the table suggest this % as a minimum).However, since markets rarely peak on peak momentum (the only exceptions were 1897 and 1968), any sharp correction as buying is exhausted should be followed by at least one more attempt at a new high thereafter.Does this change my view that the Technology bull market is ending?  No.  And if my conclusion about a buying climax is correct, it arguably supports it.  As for NASDAQ 100 being "game over", this confirms that it is probably still in "extra time".  Perhaps I should have said "Game (Nearly) Over" ... If you read the results differently from me, I would love to hear.

A 120-year History of Extreme Momentum: Is this month’s 30-year record reading in the World Index a sign of bullish acceleration, or bearish exhaustion? This is a very rare event, so what does history tell us?Firstly, that this is a unique juncture in market history, at least in more modern times.Since the inception of the Dow indices in 1897, no bull market has produced this much momentum this late in the cycle. I therefore view it as more likely that the market is in the throes of a buying climax, but one which is not quite complete. A 6% rise from the close when the 8-week RSI hit the 75% mark would put SPX at 3,003 and MXWD at 561.  (The stats in the table suggest this % as a minimum).However, since markets rarely peak on peak momentum (the only exceptions were 1897 and 1968), any sharp correction as buying is exhausted should be followed by at least one more attempt at a new high thereafter.Does this change my view that the Technology bull market is ending?  No.  And if my conclusion about a buying climax is correct, it arguably supports it.  As for NASDAQ 100 being "game over", this confirms that it is probably still in "extra time".  Perhaps I should have said "Game (Nearly) Over" ... If you read the results differently from me, I would love to hear.  

World Index: A 120-Year History of Extreme Momentum

Amareos

Ryan Shea

Thematic (Sector/Industry)

<h2>Introduction </h2>Ever since the OPEC-induced shocks in the mid-to-late 1970s, which ushered in a period of extreme economic and financial volatility (and the concept of stagflation was born), economists and investors have worried about the macro implications arising from ebbs and flows in the crude oil price.Historically, sharp rises in the price of black gold, as occurred in 1973,1979, 1990 and 2008, have preceded economic downturns. This is consistent with the prevailing view of economists that…

Introduction Ever since the OPEC-induced shocks in the mid-to-late 1970s, which ushered in a period of extreme economic and financial volatility (and the concept of stagflation was born), economists and investors have worried about the macro implications arising from ebbs and flows in the crude oil price.Historically, sharp rises in the price of black gold, as occurred in 1973,1979, 1990 and 2008, have preceded economic downturns. This is consistent with the prevailing view of economists that…

The Market Sentimentalist - Confusion Reigns (The Crude Oil Price and the Global Economy)

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.

Our long-term bullish outlook remains intact. The weight of the evidence still points to further upside, allowing, of course, for occasional backing and filling. That said, we are selective about new buy recommendations.  In today’s report we provide a recap of our investment thesis and sector weightings, and highlight actionable ideas within cyclical Groups, including Air Freight &amp; Logistics, Truckers, and Paper &amp; Packaging.

Our long-term bullish outlook remains intact. The weight of the evidence still points to further upside, allowing, of course, for occasional backing and filling. That said, we are selective about new buy recommendations.  In today’s report we provide a recap of our investment thesis and sector weightings, and highlight actionable ideas within cyclical Groups, including Air Freight &amp; Logistics, Truckers, and Paper &amp; Packaging.

Multi-asset Macro/Emerging Markets Strategist

Virgil Fernandez Esguerra

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Executive summary: Our guide to this week’s global macro risk events and trading opportunities. 
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This week in trade ideas, we are tactically long S&amp;P volatility and short EUR-JPY. On a strategic basis, we are long German DAX and Malaysian equities, while short Brazilian stocks and US Treasuries.</li>
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Monday: Markets will begin the week digesting weekend events in Washington (government shutdown talks), Germany (SPD convention) and possibly Oman (OPEC-Russia meeting).</li>
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Tuesday brings the BOJ meeting and…</li>
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Executive summary: Our guide to this week’s global macro risk events and trading opportunities. 


This week in trade ideas, we are tactically long S&amp;P volatility and short EUR-JPY. On a strategic basis, we are long German DAX and Malaysian equities, while short Brazilian stocks and US Treasuries.

Monday: Markets will begin the week digesting weekend events in Washington (government shutdown talks), Germany (SPD convention) and possibly Oman (OPEC-Russia meeting).

Tuesday brings the BOJ meeting and…



Week Ahead in Global Macro: US Shutdown, Germany SPD, BOJ, ECB, Malaysia BNM, Brazil Lula in Court

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)

Chart of the Day: What Lies Beneath

At 2.6% q/q SAAR, the advance estimate of US Q4 GDP was superficially disappointing but the more the data are dug into, the better they look....

Richard Iley

World Index: A 120-Year History of Extreme Momentum

A 120-year History of Extreme Momentum: Is this month’s 30-year record reading in the World Index a sign of bullish acceleration, or bearish...

Peter Beuttell

The Market Sentimentalist - Confusion Reigns (The Crude Oil Price and the Global Economy)

Introduction Ever since the OPEC-induced shocks in the mid-to-late 1970s, which ushered in a period of extreme economic and financial volatility...

Amareos

U.S. Equity Strategy

Our long-term bullish outlook remains intact. The weight of the evidence still points to further upside, allowing, of course, for occasional...

Vermilion Research

Week Ahead in Global Macro: US Shutdown, Germany SPD, BOJ, ECB, Malaysia BNM, Brazil Lula in Court

Executive summary: Our guide to this week’s global macro risk events and trading opportunities. This week in trade ideas, we are tactically...

Virgil Fernandez Esguerra