The time of the week for a major release and tech update.
This bull market is stronger that many would have ever imagined. Monetary induced or a real recovery no matter. We are paid on price and price is moving relentlessly higher. Cash as an asset class remains very undesirable and therefore all asset markets irrelevant of data or risk continue to move higher.
The Swiss team were traveling last week but here below find their latest report. They do, up front, acknowledge that they have been “too cautious” on the strength of equity markets most recent bounce and they have updated their cyclical model to adjust for this strength.
“One consequence of the continued and exhaustive overshooting is that we expect our anticipated later December top to shift into early December, which we would see as the beginning of a distributive top building process that could last into January before starting a significant correction cycle into later Q1.”
Its right they look for the probable event of a distributive top but its also worth stating that the higher we rise in this near vertical manner the higher the probability there is of an unforeseen event causing the market to sell off in a dramatic style. You cannot forecast unforeseen macro events but assets markets usually put a price on risk. At present macro trend changing risks are high whereas the discount applied to these risks is at new record lows.
From a breadth perspective the Nasdaq (and particularly Nas100) is simply on fire to the upside. The breadth is so high now that its becoming contrarian and signals the index is in a parabolic phase.
We have, of course, seen this sort of mania before for tech issues. Whether this parabolic bull market for tech ends like the last one we cannot say yet but the more vertical this goes the higher the chance of the same sort of wash out ending. Most other indexes have scored negative divergence on the latest higher highs in price as the swiss team comment. The Sp500 is certainly less convincing than the nasdaq100 is. Although the level of strength, even here, is more convincing than i would have expected a month or two earlier. Its all indicative of an Q1 or even h2 market top, unexpected event aside, occurring.
The commodity complex is of great interest to all and they remain broadly bullish the sector in spite of the recent Aud breakdown.
“Generally, a break of the early November low at 2.95 would be bearish copper and would basically negate our whole commodity rebound scenario, so we would keep a close eye on copper as a key indicator for the commodity complex”!
Yes i would tend to agree that and note GS have a bullish bias of a +2 on copper via their weekly technical report. (Gold bearishly bias -2).
Fx they forecast a near term turn in the fortunes of the USD lead by a reversal in the usdjpy.
I realize many are waiting for this report so without delay here the report:
And here an excellent piece of work from the same house running comparative nos on equity performances:
And here a double update from Fitzpatrick whose allocations are doing nicely now having struggled earlier in the year.
And here his latest report:
And here last week’s isi report
And here GS with their regular tech weekly
And here their latest
And here the CS tech report
And here the latest regular MS fx tech report
And here the good JP fx tech wkly report:
And here Barcap
I do have other useful reports i want to update with in the next few days.
All the best
Rich