Technical Analyst - Global with an Asian focus, Aletheia Capital

Chris Roberts

Technical Analyst - Global with an Asian focus

Independent and original Asian investment research

Aletheia Capital

Aletheia Capital (HK) Ltd. (previously known as Asianomics) combines the extensive knowledge of its experienced team with technology and regulatory changes to disrupt Global Markets business in Asia. The firm is completely independent with no conflicts of interest either on Investment Banking advisory or Capital Markets execution.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

Global equity markets have started 2018 well, the MSCI World (MXWO – 2,158) is up 2.6% year to date, while the world’s most important index, the S&amp;P 500 (SPX – 2,747) is up 2.8%. In Asia, the MSCI Asia Free ex-Japan (MXASJ – 742) has gained 4.0% thus far in 2018 and the MSCI Emerging Markets Index (MXEF – 1,207) is up 4.2%.The strong start reflects the same buoyant risk appetite that market that characterized 2017. From October 2016 through March 2017 we made 15 different buy recommendations as the global bull market corrected and then resumed, but we don’t see the same attractive risk/reward here.We remain bullish longer term but are not willing to chase markets here. Our concerns are based on what we are seeing on the monthly charts of many benchmark indices.Dirty Harry’s (Clint Eastwood) Do you feel lucky punk? would appear to be a pertinent enquiry for buyers at current levels (minus the punk, of course).

Global equity markets have started 2018 well, the MSCI World (MXWO – 2,158) is up 2.6% year to date, while the world’s most important index, the S&amp;P 500 (SPX – 2,747) is up 2.8%. In Asia, the MSCI Asia Free ex-Japan (MXASJ – 742) has gained 4.0% thus far in 2018 and the MSCI Emerging Markets Index (MXEF – 1,207) is up 4.2%.The strong start reflects the same buoyant risk appetite that market that characterized 2017. From October 2016 through March 2017 we made 15 different buy recommendations as the global bull market corrected and then resumed, but we don’t see the same attractive risk/reward here.We remain bullish longer term but are not willing to chase markets here. Our concerns are based on what we are seeing on the monthly charts of many benchmark indices.Dirty Harry’s (Clint Eastwood) Do you feel lucky punk? would appear to be a pertinent enquiry for buyers at current levels (minus the punk, of course).

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. 

We started last year with an S&amp;P 500 target at 2,363 and progressively raised that to 2,700-2,720, since its post-2009 bull market pattern has not looked complete - until now. Both it and NASDAQ 100 need minor upward drift to finish off their short-term wave counts, but that could be a matter of only a few weeks, and would allow NDX to hit our highest targets up to 6,737.Note that we are not raising our targets again (at this point, at least, but for the record the next levels are 2,838 and 2,934).Amongst the indicators, the deterioration in the New 52-week High/Low area is similar to that of the 2007/2011/2015 topping phases, and remains of particular concern. The Sentiment arena has been flashing medium-term warnings since Q4, and continues to do so. Not all areas show deterioration (e.g. Trend Strength), and we would be more concerned if the patterns in Japan and Emerging looked as near completion, but we are watching for signs of top-building now that major US targets have been achieved.

We started last year with an S&amp;P 500 target at 2,363 and progressively raised that to 2,700-2,720, since its post-2009 bull market pattern has not looked complete - until now. Both it and NASDAQ 100 need minor upward drift to finish off their short-term wave counts, but that could be a matter of only a few weeks, and would allow NDX to hit our highest targets up to 6,737.Note that we are not raising our targets again (at this point, at least, but for the record the next levels are 2,838 and 2,934).Amongst the indicators, the deterioration in the New 52-week High/Low area is similar to that of the 2007/2011/2015 topping phases, and remains of particular concern. The Sentiment arena has been flashing medium-term warnings since Q4, and continues to do so. Not all areas show deterioration (e.g. Trend Strength), and we would be more concerned if the patterns in Japan and Emerging looked as near completion, but we are watching for signs of top-building now that major US targets have been achieved.

S&P 500: Major Targets Reached, Warning Signals Forming

Economist

Richard Iley

Macroeconomics

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/041/315/original/Screen%20Shot%202018-01-04%20at%207.41.57%20AM.png?1515014214" class="editor-image img-responsive" data-smartkarma-image-id="41315"></figure><div class="content-highlight">
How long can the US's extraordinary manufacturing boom, which we have been in the vanguard of highlighting, continue? The answer will, in turn, determine how long can global risk in general and cyclical stocks in particular continue to charge ahead as they done in the first few days of 2018?
Both in terms of duration and amplitude the US economy's surge is already approaching historical limits. ISM's near 40-year high reached back in September is almost certainly the cyclical peak, reached 21…
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How long can the US's extraordinary manufacturing boom, which we have been in the vanguard of highlighting, continue? The answer will, in turn, determine how long can global risk in general and cyclical stocks in particular continue to charge ahead as they done in the first few days of 2018?
Both in terms of duration and amplitude the US economy's surge is already approaching historical limits. ISM's near 40-year high reached back in September is almost certainly the cyclical peak, reached 21…


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.

Both Energy and Materials have hurriedly advanced within our relative strength rankings over the past several weeks--now ranking #2 and #4, respectively--confirming the widespread patterns visible in the charts of each Sector’s constituents: bottoms and bases.We have highlighted these evolving set-ups over the past year, identifying: improving internals in energy (Aug. 12), then labeling it as a bottom the following week; also, reiterating copper nearly twelve months ago from today, recommending fertilizers (Dec. 13), and reiterating metals &amp; mining stocks (Dec. 18).Given the improving relative strength trends coupled with constructive patterns, we are upgrading both sectors to overweight from market weight.

Both Energy and Materials have hurriedly advanced within our relative strength rankings over the past several weeks--now ranking #2 and #4, respectively--confirming the widespread patterns visible in the charts of each Sector’s constituents: bottoms and bases.We have highlighted these evolving set-ups over the past year, identifying: improving internals in energy (Aug. 12), then labeling it as a bottom the following week; also, reiterating copper nearly twelve months ago from today, recommending fertilizers (Dec. 13), and reiterating metals &amp; mining stocks (Dec. 18).Given the improving relative strength trends coupled with constructive patterns, we are upgrading both sectors to overweight from market weight.

Upgrading U.S. Energy & Materials Sectors to Overweight

<div class="content-highlight">2018 promises to be another fascinating, but almost certainly more challenging year for global investors. We have identified a number of non-consensus calls - 18 of them for '18 - to help navigate the minefield.Our first five are: <ul><li>global growth momentum has already peaked and will slow through the year;</li><li>the US's growth-inflation mix will deteriorate and the Philipps curve should flicker back to life;</li><li>The Federal Reserve will hike more than expected, lifting the Fed Funds rate at least three times;</li><li>the UST curve will keep flattening but 'bond market conundrum 2.0' will continue to cap longer yields;</li><li> risks to oil are heavily to the downside. A slump back below $50 per barrel could be THE story of 2018.</li></ul>Another 5 to follow soon. </div>

2018 promises to be another fascinating, but almost certainly more challenging year for global investors. We have identified a number of non-consensus calls - 18 of them for '18 - to help navigate the minefield.Our first five are: global growth momentum has already peaked and will slow through the year;the US's growth-inflation mix will deteriorate and the Philipps curve should flicker back to life;The Federal Reserve will hike more than expected, lifting the Fed Funds rate at least three times;the UST curve will keep flattening but 'bond market conundrum 2.0' will continue to cap longer yields; risks to oil are heavily to the downside. A slump back below $50 per barrel could be THE story of 2018.Another 5 to follow soon. 

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)

Global Markets: Do You Feel Lucky?

Global equity markets have started 2018 well, the MSCI World (MXWO – 2,158) is up 2.6% year to date, while the world’s most important index, the...

Chris Roberts

S&P 500: Major Targets Reached, Warning Signals Forming

We started last year with an S&P 500 target at 2,363 and progressively raised that to 2,700-2,720, since its post-2009 bull market pattern has...

Peter Beuttell

Chart of the Day: BOOM! 2018 Edition

How long can the US's extraordinary manufacturing boom, which we have been in the vanguard of highlighting, continue? The answer will, in turn,...

Richard Iley

Upgrading U.S. Energy & Materials Sectors to Overweight

Both Energy and Materials have hurriedly advanced within our relative strength rankings over the past several weeks--now ranking #2 and #4,...

Vermilion Research

Global: 18 For '18 - Part 1

2018 promises to be another fascinating, but almost certainly more challenging year for global investors. We have identified a number...

Richard Iley