Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Cross Asset Strategy

The breaks lower on Copper and the wider London Metals Exchange Index can now be confirmed.A look at the price action and charts suggest further losses to the tune of 10% from here in both.Perhaps as a consequence, we see an additional break lower on US 30 year yield.Is US 10 year yield to follow?This note is a quick follow up on the price action in markets from the earlier report titled <a href="https://www.smartkarma.com/insights/bonds-all-charts-lead-to-me" target="_blank" data-smartkarma-citation="insights:52482" rel="noopener">Bonds: All Charts Lead to Me</a>

The breaks lower on Copper and the wider London Metals Exchange Index can now be confirmed.A look at the price action and charts suggest further losses to the tune of 10% from here in both.Perhaps as a consequence, we see an additional break lower on US 30 year yield.Is US 10 year yield to follow?This note is a quick follow up on the price action in markets from the earlier report titled Bonds: All Charts Lead to Me 

Commodities & Bonds – The Breaks and the Targets

Since the release of US labour market data yields have slipped. Notable price action has unfolded for only the third time since yields peaked in late March, which indicates lower yields still.Additionally, USDJPY has faltered, which is consistent with the signs in fixed income markets.But how low is low? Could this just be a short lived and relatively meaningless move down in yields or could we see US 10Y yield below 1.46% and US 30Y yield below 2.15%?

Since the release of US labour market data yields have slipped. Notable price action has unfolded for only the third time since yields peaked in late March, which indicates lower yields still.Additionally, USDJPY has faltered, which is consistent with the signs in fixed income markets.But how low is low? Could this just be a short lived and relatively meaningless move down in yields or could we see US 10Y yield below 1.46% and US 30Y yield below 2.15%?

Is it still the time to be defensive on equities and have a notable allocation in Bonds as was described in the note from 11 May (see <a href="https://www.smartkarma.com/insights/us-equities-time-to-get-defensive" target="_blank" data-smartkarma-citation="insights:51332" rel="noopener">US Equities: Time to Get Defensive</a>)?Whichever chart we look at across markets - whether in fixed income, commodities, foreign exchange, or equities - the signs are clear…stay long bonds (Treasuries) in this environment for the short term.

Is it still the time to be defensive on equities and have a notable allocation in Bonds as was described in the note from 11 May (see US Equities: Time to Get Defensive)?Whichever chart we look at across markets - whether in fixed income, commodities, foreign exchange, or equities - the signs are clear…stay long bonds (Treasuries) in this environment for the short term.

Technical Analysis

Following last week’s note titled <a href="https://www.smartkarma.com/insights/us-equities-time-to-get-defensive" target="_blank" data-smartkarma-citation="insights:51332" rel="noopener">US Equities: Time to Get Defensive</a>, we suggested there could be a notable short term rotation from stocks to bonds this month and possibly next.While equities have slipped, the move down does not yet seem to be over.At the same time we now see a setup on the Long Bond future that is telling us a rally lies ahead. Could this be a short term setup that warrants further caution for Equities?

Following last week’s note titled US Equities: Time to Get Defensive, we suggested there could be a notable short term rotation from stocks to bonds this month and possibly next.While equities have slipped, the move down does not yet seem to be over.At the same time we now see a setup on the Long Bond future that is telling us a rally lies ahead. Could this be a short term setup that warrants further caution for Equities?

A number of charts are beginning to show some concerns that draw attention to the annual mantra: ‘Sell in May and Go Away’We look at different measures and patterns on each of the three major US indices – Dow Jones, S&amp;P 500, and Nasdaq 100.In all cases there are important indications that a decent correction down is likely this month (and possibly beyond). This period should eventually result in buying opportunities, however first we are likely to see some pain.

A number of charts are beginning to show some concerns that draw attention to the annual mantra: ‘Sell in May and Go Away’We look at different measures and patterns on each of the three major US indices – Dow Jones, S&amp;P 500, and Nasdaq 100.In all cases there are important indications that a decent correction down is likely this month (and possibly beyond). This period should eventually result in buying opportunities, however first we are likely to see some pain.

United States

Legacy Government (Sovereign) Generic Index-key ticker

US 30Y (USGG30YR INDEX)

Commodities & Bonds – The Breaks and the Targets

The recent breaks on both industrial commodities and long end bond yields warrants further attention. These charts highlight target areas in the...

Shyam Devani

Bonds & Commodities: A Picture Unfolding

The price action in Bonds and the emerging picture in major commodity markets all point towards lower yields. Breaks are yet to be confirmed though...

Shyam Devani

Bonds: All Charts Lead to Me

As we look across financial markets, there is an increasing degree of conviction that higher [US] bond prices and lower yields are likely to be...

Shyam Devani

Bonds Set to Bounce

The setup in the Bond market suggests a short term bounce ahead (in price) which in turn could be a warning sign for further wobbles in equities.

Shyam Devani

US Equities: Time to Get Defensive

Historical comparisons and a look at the price action of US Indices are giving warning signs that this is one of those years where 'Sell in May'...

Shyam Devani