We continue to view the price action over the past month as a bear market bounce in the S&P 500, Nasdaq 100 (QQQ), and Russell 2000 (IWM).
Each index appears to be forming a bearish flag pattern. Until the S&P 500, QQQ, and IWM can break above their YTD downtrends, we remain bearish.
We continue to believe that this bear market is being fueled by the rising U.S. dollar (DXY), rising 10-yr Treasury yield, and the move higher in WTI crude oil.
The Euro’s high momentum decline post 1.07 break of key support opens the wave for macro weakness after a tactical bounce we see further downside risk to 0.96 and 0.88.
Bear triangulation and the impulse lower shore up the USD’s bull posture in Asia and EM.
Buy USD weakness remains our mantra toward DXY 118 and will have a major impact on risk assets into September and then again in Q1 2023.
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Resona Holdings (8308 JP) key tactical resistance lies at 503.86, a level that if broken could spur a counter trend tactical bounce back to outlined trendline and physical resistance.
The daily cycle does show some underlying tactical support given the RSI has not confirmed recent lows. Any rally would be a counter trend move within the larger degree decline cycle. Buy volumes are not supportive in this rise (deteriorating) underscore the macro bear posture.
If the weekly cycle head and shoulders is true to course, Resona Holdings would face significant downside pressure looking ahead 2 quarters.
The market’s bounce off of the December, 2018 low was a swift “V” reversal. While we often see a retest of such events, our outlook since that time has repeatedly suggested that a retest may not occur. We continue to believe the market remains healthy with overall and leadership remaining centered in the cyclical Sectors, mainly Technology. In this publication we provide an overview of our U.S. equity strategy, and examine attractive opportunities in each of our 12 Sectors, beginning with Technology – our favorite.
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Resona Holdings (8308 JP) key tactical resistance lies at 503.86, a level that if broken could spur a counter trend tactical bounce back to outlined trendline and physical resistance.
The daily cycle does show some underlying tactical support given the RSI has not confirmed recent lows. Any rally would be a counter trend move within the larger degree decline cycle. Buy volumes are not supportive in this rise (deteriorating) underscore the macro bear posture.
If the weekly cycle head and shoulders is true to course, Resona Holdings would face significant downside pressure looking ahead 2 quarters.
The market’s bounce off of the December, 2018 low was a swift “V” reversal. While we often see a retest of such events, our outlook since that time has repeatedly suggested that a retest may not occur. We continue to believe the market remains healthy with overall and leadership remaining centered in the cyclical Sectors, mainly Technology. In this publication we provide an overview of our U.S. equity strategy, and examine attractive opportunities in each of our 12 Sectors, beginning with Technology – our favorite.
WTI’s bullish counter trend rally cycle from the touted low at 45 is maturing and we are hunting for a fresh high to turn from long to short WTI. A peak in oil would align with a softer economic cycle in the next quarter.
Price triangulation is touted as a tactical bullish breakout pattern that will induce a fresh high near targeted dual projection/retracement. This rise is viewed as a more exhaustive rally that will begin to run out of steam with risk of a fade near 58-59. This is a tradable upside move.
RSI dual tops have show high confidence in market peaks from early 2018 and a final push higher out of the triangle bull flag would get us back to the 70 top resistance to nail down a double top. It is this dual top and MACD resistance that worn of an intermediate peak for oil into strength.
Energy shares are underperform oil and a frequent cycle leader to an oil peak.
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Incremental technical developments continue to be of the bullish variety as more and more countries/regions begin to participate in the rally. These ongoing improvements further cement our positive overall outlook, and we continue to believe that global equities (MSCI ACWI) are poised for additional strength moving forward. In our April International Strategy, we highlight various themes which lead to our overall positive outlook, along with areas within the world’s markets where we see immediate opportunity.
We have held a bullish/long position in Indonesia from 6,080 after the breakout above 6,000 resistance and continue to see the macro cycle in a positive light to challenge and clear the 2018 highs.
Bull energy is brewing once again for a bull breakout of the noted wedge that will open the way for the macro bull cycle to resume. Lower wedge support is our preferred buy zone to add to our long position with clear wedge breakout resistance and bull inflection point.
For those not long this offers an excellent risk to reward entry with a controlled stop.
Buy volumes remain healthy and supportive of the macro bull cycle.
Japan has been a favored pair short bet against the likes of China. The standout chart feature is the rising wedge break of support and reaction rise to test the elevated underside of this trendline (backswing resistance). Very often backswing resistance points are not surpassed and act as a cycle turn point. Yesterday’s Nikkei price reversal favors this outcome.
We anticipate risk appetite to exhaust for US equities and the China complex once a trade deal is locked in (with drawn out conditions for the market to digest). This would leave the fragile Nikkei technical posture vulnerable to a hard correction cycle. The overall major trend still remains down for Japan (and Korea) unlike China.
A higher conviction USD/JPY peak will unfold at noted RSI and MACD resistance points that are expected to make peaks and a bearish turn cycle.
The break down in the 10yr yield from the sub 3% level has set in motion a higher degree decline in yield on the back of the rising wedge support break. We have met our 2.62% and 2.40% targets and see further weakness in yield.
Macro yield cycle will succumb to bear pressure stemming from the weekly MACD breaking down out of not one but two triangle formations (multi year event). The Bond market is sending a clear growth message with equities paying little head until after a trade deal is clinched.
USD flat range sets the stage for a bullish break higher barring a breach of dual lows at 95. Lack of a downside impulse sets a more bullish undertone for the dollar amid falling yields. Stress fractures in the bond market and USD are evolving.
USD is expected to base versus EM FX as the bulk of USD weakness in EM is behind us.
Naver Corp (035420 KS) is nearing tactical support for a trading buy but continues to face macro bear pressure stemming from key resistances note in the weekly RSI and MACD postures. This bear pressure is due to resume after a bounce sequence.
Naver has broken down out of triangulation after completing a corrective bounce cycle outlined in our recent update. Naver Bull Wedge to Trade Higher . We are now resuming the macro down cycle and view tactical rallies as selling opportunities as the major trend remains down.
A Kospi 200 rise above 290 will play a role in lifting Naver in the outlined tactical bounce cycle.
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Resona Holdings (8308 JP) key tactical resistance lies at 503.86, a level that if broken could spur a counter trend tactical bounce back to outlined trendline and physical resistance.
The daily cycle does show some underlying tactical support given the RSI has not confirmed recent lows. Any rally would be a counter trend move within the larger degree decline cycle. Buy volumes are not supportive in this rise (deteriorating) underscore the macro bear posture.
If the weekly cycle head and shoulders is true to course, Resona Holdings would face significant downside pressure looking ahead 2 quarters.
The market’s bounce off of the December, 2018 low was a swift “V” reversal. While we often see a retest of such events, our outlook since that time has repeatedly suggested that a retest may not occur. We continue to believe the market remains healthy with overall and leadership remaining centered in the cyclical Sectors, mainly Technology. In this publication we provide an overview of our U.S. equity strategy, and examine attractive opportunities in each of our 12 Sectors, beginning with Technology – our favorite.
WTI’s bullish counter trend rally cycle from the touted low at 45 is maturing and we are hunting for a fresh high to turn from long to short WTI. A peak in oil would align with a softer economic cycle in the next quarter.
Price triangulation is touted as a tactical bullish breakout pattern that will induce a fresh high near targeted dual projection/retracement. This rise is viewed as a more exhaustive rally that will begin to run out of steam with risk of a fade near 58-59. This is a tradable upside move.
RSI dual tops have show high confidence in market peaks from early 2018 and a final push higher out of the triangle bull flag would get us back to the 70 top resistance to nail down a double top. It is this dual top and MACD resistance that worn of an intermediate peak for oil into strength.
Energy shares are underperform oil and a frequent cycle leader to an oil peak.
Technology is our favorite Sector within the U.S. equity landscape, and remains leadership – 73% of our Tech Groups are in the top 33% in terms of our Relative Strength Rankings (RSRs). Internally, semis and semi-suppliers continue to outperform and many names have pulled back to offer attractive entry points. In this report we highlight our favorite setups within the U.S. Technology Sector.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
We have held a bullish/long position in Indonesia from 6,080 after the breakout above 6,000 resistance and continue to see the macro cycle in a positive light to challenge and clear the 2018 highs.
Bull energy is brewing once again for a bull breakout of the noted wedge that will open the way for the macro bull cycle to resume. Lower wedge support is our preferred buy zone to add to our long position with clear wedge breakout resistance and bull inflection point.
For those not long this offers an excellent risk to reward entry with a controlled stop.
Buy volumes remain healthy and supportive of the macro bull cycle.
Japan has been a favored pair short bet against the likes of China. The standout chart feature is the rising wedge break of support and reaction rise to test the elevated underside of this trendline (backswing resistance). Very often backswing resistance points are not surpassed and act as a cycle turn point. Yesterday’s Nikkei price reversal favors this outcome.
We anticipate risk appetite to exhaust for US equities and the China complex once a trade deal is locked in (with drawn out conditions for the market to digest). This would leave the fragile Nikkei technical posture vulnerable to a hard correction cycle. The overall major trend still remains down for Japan (and Korea) unlike China.
A higher conviction USD/JPY peak will unfold at noted RSI and MACD resistance points that are expected to make peaks and a bearish turn cycle.
The break down in the 10yr yield from the sub 3% level has set in motion a higher degree decline in yield on the back of the rising wedge support break. We have met our 2.62% and 2.40% targets and see further weakness in yield.
Macro yield cycle will succumb to bear pressure stemming from the weekly MACD breaking down out of not one but two triangle formations (multi year event). The Bond market is sending a clear growth message with equities paying little head until after a trade deal is clinched.
USD flat range sets the stage for a bullish break higher barring a breach of dual lows at 95. Lack of a downside impulse sets a more bullish undertone for the dollar amid falling yields. Stress fractures in the bond market and USD are evolving.
USD is expected to base versus EM FX as the bulk of USD weakness in EM is behind us.
Naver Corp (035420 KS) is nearing tactical support for a trading buy but continues to face macro bear pressure stemming from key resistances note in the weekly RSI and MACD postures. This bear pressure is due to resume after a bounce sequence.
Naver has broken down out of triangulation after completing a corrective bounce cycle outlined in our recent update. Naver Bull Wedge to Trade Higher . We are now resuming the macro down cycle and view tactical rallies as selling opportunities as the major trend remains down.
A Kospi 200 rise above 290 will play a role in lifting Naver in the outlined tactical bounce cycle.
Both the cap- and equal-weighted S&P 500 are trading at highs not seen since early October 2018 – a positive indication in itself. Additionally, key risk-on areas we highlighted in last week’s Compass (small-caps, Financials/Banks, and Transports) have outperformed off the recent lows – a welcomed sight for risk sentiment, and confirms out positive outlook. In today’s report we highlight attractive bottom-fishing opportunities within the Financials Sector, and attractive Groups and stocks within Large- and Small-Cap Railroads, and Internet Software
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
The market’s bounce off of the December, 2018 low was a swift “V” reversal. While we often see a retest of such events, our outlook since that time has repeatedly suggested that a retest may not occur. We continue to believe the market remains healthy with overall and leadership remaining centered in the cyclical Sectors, mainly Technology. In this publication we provide an overview of our U.S. equity strategy, and examine attractive opportunities in each of our 12 Sectors, beginning with Technology – our favorite.
WTI’s bullish counter trend rally cycle from the touted low at 45 is maturing and we are hunting for a fresh high to turn from long to short WTI. A peak in oil would align with a softer economic cycle in the next quarter.
Price triangulation is touted as a tactical bullish breakout pattern that will induce a fresh high near targeted dual projection/retracement. This rise is viewed as a more exhaustive rally that will begin to run out of steam with risk of a fade near 58-59. This is a tradable upside move.
RSI dual tops have show high confidence in market peaks from early 2018 and a final push higher out of the triangle bull flag would get us back to the 70 top resistance to nail down a double top. It is this dual top and MACD resistance that worn of an intermediate peak for oil into strength.
Energy shares are underperform oil and a frequent cycle leader to an oil peak.
Technology is our favorite Sector within the U.S. equity landscape, and remains leadership – 73% of our Tech Groups are in the top 33% in terms of our Relative Strength Rankings (RSRs). Internally, semis and semi-suppliers continue to outperform and many names have pulled back to offer attractive entry points. In this report we highlight our favorite setups within the U.S. Technology Sector.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
The market’s bounce off of the December, 2018 low was a swift “V” reversal. While we often see a retest of such events, our outlook since that time has repeatedly suggested that a retest may not occur. We continue to believe the market remains healthy with overall and leadership remaining centered in the cyclical Sectors, mainly Technology. In this publication we provide an overview of our U.S. equity strategy, and examine attractive opportunities in each of our 12 Sectors, beginning with Technology – our favorite.
WTI’s bullish counter trend rally cycle from the touted low at 45 is maturing and we are hunting for a fresh high to turn from long to short WTI. A peak in oil would align with a softer economic cycle in the next quarter.
Price triangulation is touted as a tactical bullish breakout pattern that will induce a fresh high near targeted dual projection/retracement. This rise is viewed as a more exhaustive rally that will begin to run out of steam with risk of a fade near 58-59. This is a tradable upside move.
RSI dual tops have show high confidence in market peaks from early 2018 and a final push higher out of the triangle bull flag would get us back to the 70 top resistance to nail down a double top. It is this dual top and MACD resistance that worn of an intermediate peak for oil into strength.
Energy shares are underperform oil and a frequent cycle leader to an oil peak.
Technology is our favorite Sector within the U.S. equity landscape, and remains leadership – 73% of our Tech Groups are in the top 33% in terms of our Relative Strength Rankings (RSRs). Internally, semis and semi-suppliers continue to outperform and many names have pulled back to offer attractive entry points. In this report we highlight our favorite setups within the U.S. Technology Sector.
LG Corp (003550 KS) is resting on critical daily cycle pivot support; if broken would see momentum spill over into the weekly cycle with a bias to re test base line support.
Daily RSI has already broken the wedge support equivalent in price and very often a good leading indicator. LGC is currently resting just above key pivot support, that once broken would induce a slide back to more attractive and a better risk to reward zone.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
Japan has been a favored pair short bet against the likes of China. The standout chart feature is the rising wedge break of support and reaction rise to test the elevated underside of this trendline (backswing resistance). Very often backswing resistance points are not surpassed and act as a cycle turn point. Yesterday’s Nikkei price reversal favors this outcome.
We anticipate risk appetite to exhaust for US equities and the China complex once a trade deal is locked in (with drawn out conditions for the market to digest). This would leave the fragile Nikkei technical posture vulnerable to a hard correction cycle. The overall major trend still remains down for Japan (and Korea) unlike China.
A higher conviction USD/JPY peak will unfold at noted RSI and MACD resistance points that are expected to make peaks and a bearish turn cycle.
The break down in the 10yr yield from the sub 3% level has set in motion a higher degree decline in yield on the back of the rising wedge support break. We have met our 2.62% and 2.40% targets and see further weakness in yield.
Macro yield cycle will succumb to bear pressure stemming from the weekly MACD breaking down out of not one but two triangle formations (multi year event). The Bond market is sending a clear growth message with equities paying little head until after a trade deal is clinched.
USD flat range sets the stage for a bullish break higher barring a breach of dual lows at 95. Lack of a downside impulse sets a more bullish undertone for the dollar amid falling yields. Stress fractures in the bond market and USD are evolving.
USD is expected to base versus EM FX as the bulk of USD weakness in EM is behind us.
Naver Corp (035420 KS) is nearing tactical support for a trading buy but continues to face macro bear pressure stemming from key resistances note in the weekly RSI and MACD postures. This bear pressure is due to resume after a bounce sequence.
Naver has broken down out of triangulation after completing a corrective bounce cycle outlined in our recent update. Naver Bull Wedge to Trade Higher . We are now resuming the macro down cycle and view tactical rallies as selling opportunities as the major trend remains down.
A Kospi 200 rise above 290 will play a role in lifting Naver in the outlined tactical bounce cycle.
Both the cap- and equal-weighted S&P 500 are trading at highs not seen since early October 2018 – a positive indication in itself. Additionally, key risk-on areas we highlighted in last week’s Compass (small-caps, Financials/Banks, and Transports) have outperformed off the recent lows – a welcomed sight for risk sentiment, and confirms out positive outlook. In today’s report we highlight attractive bottom-fishing opportunities within the Financials Sector, and attractive Groups and stocks within Large- and Small-Cap Railroads, and Internet Software
We continue to believe that equities in Europe and the UK are bottoming with the STOXX Europe 600 index breaking topside its 14-month downtrend. Helping lead the turnaround is the Personal & Household Goods supersector. We believe outperformance is set to continue and several stocks are actionable at current levels within our int’l Group CD-28 Apparel, Accessory & Luxury Goods, Europe: LVMH Moet Hennessy Louis Vuitton SE (MC-FR), Christian Dior SE (CDI-FR), Kering SA (KER-FR), Hermes International SCA (RMS-FR), adidas AG (ADS-DE), Moncler SpA (MONC-IT), PUMA SE (PUM-DE), and Bjorn Borg AB (BORG-SE). Add exposure.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
The break down in the 10yr yield from the sub 3% level has set in motion a higher degree decline in yield on the back of the rising wedge support break. We have met our 2.62% and 2.40% targets and see further weakness in yield.
Macro yield cycle will succumb to bear pressure stemming from the weekly MACD breaking down out of not one but two triangle formations (multi year event). The Bond market is sending a clear growth message with equities paying little head until after a trade deal is clinched.
USD flat range sets the stage for a bullish break higher barring a breach of dual lows at 95. Lack of a downside impulse sets a more bullish undertone for the dollar amid falling yields. Stress fractures in the bond market and USD are evolving.
USD is expected to base versus EM FX as the bulk of USD weakness in EM is behind us.
Naver Corp (035420 KS) is nearing tactical support for a trading buy but continues to face macro bear pressure stemming from key resistances note in the weekly RSI and MACD postures. This bear pressure is due to resume after a bounce sequence.
Naver has broken down out of triangulation after completing a corrective bounce cycle outlined in our recent update. Naver Bull Wedge to Trade Higher . We are now resuming the macro down cycle and view tactical rallies as selling opportunities as the major trend remains down.
A Kospi 200 rise above 290 will play a role in lifting Naver in the outlined tactical bounce cycle.
Both the cap- and equal-weighted S&P 500 are trading at highs not seen since early October 2018 – a positive indication in itself. Additionally, key risk-on areas we highlighted in last week’s Compass (small-caps, Financials/Banks, and Transports) have outperformed off the recent lows – a welcomed sight for risk sentiment, and confirms out positive outlook. In today’s report we highlight attractive bottom-fishing opportunities within the Financials Sector, and attractive Groups and stocks within Large- and Small-Cap Railroads, and Internet Software
We continue to believe that equities in Europe and the UK are bottoming with the STOXX Europe 600 index breaking topside its 14-month downtrend. Helping lead the turnaround is the Personal & Household Goods supersector. We believe outperformance is set to continue and several stocks are actionable at current levels within our int’l Group CD-28 Apparel, Accessory & Luxury Goods, Europe: LVMH Moet Hennessy Louis Vuitton SE (MC-FR), Christian Dior SE (CDI-FR), Kering SA (KER-FR), Hermes International SCA (RMS-FR), adidas AG (ADS-DE), Moncler SpA (MONC-IT), PUMA SE (PUM-DE), and Bjorn Borg AB (BORG-SE). Add exposure.
Sony Corp (6758 JP) is forming a bullish descending wedge/channel that once mature will chisel out an intermediate low with scope to clear medium term breakout resistance. The tactical low near 4,400 lies just above more strategic support.
Clear pivot points will help manage positioning within the bull wedge that is in the final innings.
The tactical buy level is not that far from strategic support with a more bullish macro lean.
MACD bull divergence is not only supportive into near term weakness but also points to a breakout above medium resistance. Risk lies with Sony not looking back after hitting our tactical low target.
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