The latest report from the Swiss team is about as bearish a report as I have read for some time.
The final top call for the last remaining bull equity market is in place, according to the team ie the SP500 top is in place. The Asian markets are in melt down. European markets topped out some time ago.
Here a quick run through on the cyclical euro stocks that all uniformly failed to confirm the new DAX recent high.
http://www.bloomberg.com/quote/BMW:GR
http://www.bloomberg.com/quote/VOW:GR
http://www.bloomberg.com/quote/BAS:GR
http://www.bloomberg.com/quote/SAP:GR
http://www.bloomberg.com/quote/IFX:GR
http://www.bloomberg.com/quote/TKA:GR
The recent highs in indexes was clearly a chase of yield only. It did not reflect a global reflation of the real economy in anyway which has generally been worsening not improving to look at recent PMI surveys, sme lending etc.
The Swiss team are bullish on the inverse asset classes of bonds and the bullion offer value according to the team with the bullion possibly demonstrating that a long term bottom is in place.
No mention on the fx side of things but the USD strength here looks a very obvious trade. Long US$ bonds. US$ bond strength alongside gold strength is possible. Historically it has occurred as the two ultimate safe heaven asset classes which would imply a major market bearish move in inversely correlated assets. The Implications for nymex crude is also clear. It has shown relative strength in recent sessions but if this move is to escalate and the Swiss team are correct in their call for the global multi asset market deflationary trade to set sail then oil would potentially offer a beta and potentially alpha indeed to this bear trade.Oil futures are showing significant backwardation so the market is starting to discount this in forward contracts if not the current spot price.
Buckle up team. Hedge via covered options or index shorts. Aggressive traders get ready to select target indexes and or companies for what follows later this summer. On the plus side many sectors still show great price resilience which needs to be tested and broken. This buys some time and should in the near term produce significant bounces. The time to hedge is not today but the price evidence has shifted toward the downside on the medium term. Policy action can always over turn this but the global multi asset technical damage is now immense and so likely needs a reset to find fresh buyers, at the very least.
Here the latest report:
Rich
p.s. here a report from WF on the macro side of things
WeeklyEconomicFinancialCommentary_06212013
And comment here on today’s durable good nos:
And here comment on today’s US house nos:
(12 votes, average: 5.00 out of 5)
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