Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

Event-Driven

The Hang Seng Index is a free-float capitalization-weighted index of a selection of companies from the Stock Exchange of Hong Kong. The components of the index are divided into four subindices: Commerce and Industry, Finance, Utilities, and Properties. The index was developed with a base level of 100 as of July 31, 1964.

<ul>
<li>We have correctly forecasted a August rally for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a> in previous insights, <a href="https://www.smartkarma.com/insights/eqd-the-hsi-is-ripe-for-a-rally-in-august-if-july-s-close-is-negative" target="_blank" rel="noopener">here</a> and then <a href="https://www.smartkarma.com/insights/eqd-the-hsi-rebound-can-reach-higher-prices-in-august" target="_blank" rel="noopener">here</a> - the rally is on, but a pullback is coming.</li>
<li>The pullback may come in this week or the next, but it's probably behind the corner, the index can continue higher after the pullback.</li>
<li>In this insight we want to expose what are the levels to buy LONG to benefit from a highly probable continuation of the rally in September.</li>
</ul>


We have correctly forecasted a August rally for the Hang Seng Index in previous insights, here and then here - the rally is on, but a pullback is coming.
The pullback may come in this week or the next, but it's probably behind the corner, the index can continue higher after the pullback.
In this insight we want to expose what are the levels to buy LONG to benefit from a highly probable continuation of the rally in September.


EQD | HSI May Pull Back, Levels to BUY For Rally Continuation In September

Korea Stock Exchange KOSPI 200 / Event-Driven

The KOSPI 200 Index is a capitalization-weighted index of 200 Korean stocks which make up 93% of the total market value of the Korea Stock Exchange. The index was developed with a base value of 100 as of January 3, 1990.

Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY)

<ul>
<li>After a large sell-off, similar to other major global markets, the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200 INDEX</a> last week rebounded and closed strongly up. In this insight we want to evaluate what's next.</li>
<li>According to our pattern models, at the moment the index is not overbought yet, so in theory the index could rise higher, this week.</li>
<li>Pay attention when the index reaches the 385 price area, from there the index could start to encounter some resistance.</li>
</ul>


After a large sell-off, similar to other major global markets, the KOSPI 200 INDEX last week rebounded and closed strongly up. In this insight we want to evaluate what's next.
According to our pattern models, at the moment the index is not overbought yet, so in theory the index could rise higher, this week.
Pay attention when the index reaches the 385 price area, from there the index could start to encounter some resistance.


EQD | KOSPI 200 Rising With Room to Go Higher (This Week Only)

The S&P/ASX 200 measures the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalization. Representative liquid and tradable, it is widely considered Australia's preeminent benchmark index. The index is float-adjusted. The index was launched in April 2000.

<ul>
<li>The <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200</a> has been quietly rallying since its (modest) -11% correction in 2023, mostly unaffected by global turmoils, even the latest sell-off in US, Asia and Europe was "non-damaging".</li>
<li>The index has already recovered a large part of the losses suffered for only 1 week, very brief if we consider that the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">SPX INDEX</a> had corrected for 4 weeks.</li>
<li>Now that the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200</a> has rallied strongly we want to analyze its pattern model, to identify the area where it could pull back again (or slow down).</li>
</ul>


The S&amp;P/ASX 200 has been quietly rallying since its (modest) -11% correction in 2023, mostly unaffected by global turmoils, even the latest sell-off in US, Asia and Europe was "non-damaging".
The index has already recovered a large part of the losses suffered for only 1 week, very brief if we consider that the SPX INDEX had corrected for 4 weeks.
Now that the S&amp;P/ASX 200 has rallied strongly we want to analyze its pattern model, to identify the area where it could pull back again (or slow down).


EQD | The ASX200 Can Rally Higher (If This Is A Rally...)

<ul>
<li>In a <a href="https://www.smartkarma.com/insights/eqd-the-hsi-is-ripe-for-a-rally-in-august-if-july-s-close-is-negative" target="_blank" rel="noopener">previous insight</a> we forecasted a rally for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a> in August. The picture has not changed, a positive close above 17344.60 is still possible.</li>
<li>Looking at our MRM SHORT WEEKLY model for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a> we can see that it has not yet reached overbought levels, so it could rise further in the next weeks. </li>
<li>Conversely a SHORT trade will be possible from the levels we will indicate below.</li>
</ul>


In a previous insight we forecasted a rally for the Hang Seng Index in August. The picture has not changed, a positive close above 17344.60 is still possible.
Looking at our MRM SHORT WEEKLY model for the HSI we can see that it has not yet reached overbought levels, so it could rise further in the next weeks. 
Conversely a SHORT trade will be possible from the levels we will indicate below.


EQD | The HSI Rebound Can Reach Higher Prices in August

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.

<ul>
<li>The <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX</a> is massively oversold WEEKLY (and DAILY).</li>
<li>Our models indicate the index is trading in the "Tails" area of the LONG model, a reversal is probably imminent, but forecasts in this  price area are less reliable.</li>
<li>Accumulation can start from Monday's low prices (around 5100), the reversal will probably come next week.</li>
</ul>


The S&amp;P 500 INDEX is massively oversold WEEKLY (and DAILY).
Our models indicate the index is trading in the "Tails" area of the LONG model, a reversal is probably imminent, but forecasts in this  price area are less reliable.
Accumulation can start from Monday's low prices (around 5100), the reversal will probably come next week.


EQD | The S&P500 WEEKLY Smashed The Tails Barrier, Reversal Due Soon

I have been working for +17 years as a quantitative researcher, offering my investment research insights to investors through two private companies I have founded (Retracement Levels Ltd. and QUANTRADING AG); more recently I worked as a Portfolio Manager at Capital Theory Investment Management, LLC, a CTA based in Austin, Texas (USA), where I developed and ran automated algorithmic trading strategies for the US Futures and Options markets. 

My research work is focused on the statistical study of the "persistence of trends" and "mean reversion" effects in global Equities, Futures, Indexes, Bonds and FX Spot markets. I have created an original proprietary process (called the "Market Reversal Matrix" or "MRM") that makes extensive use of probabilistic Bayesian models to predict short-term (1 day to few weeks) trend reversals.

I do not use any AI/machine learning processes in my work: all models and algorithms are built and supervised by humans. This approach is very labour-intensive but produces forecasts that have a clearly understandable/explainable rationale (no black-boxes).