Update 1 – Breadth of the US Equity Market

While the picture still looks muddy the point of inflection, the moment of truth, seems to be very close. It will soon be clear if the 1 year EMA of the new lows (depicted in red in charts above) will cross over the 1 year EMA of the new highs (depicted in green in charts above) invalidating our hypothesis that the previous cross over was a signal to sell short equities. Please click here to continue reading.

Our View on Trend Following

Most momentum traders, or trend-followers, categorize themselves as long, medium, or short, term trend followers and approach markets with a view to predict and capture long/medium/short term trends. Please click here to continue reading.

Gold

Gold price charts and physical gold demand trends offer a dichotomous view on the future of gold price. On the one hand, the extremely lose [sic] monetary policies of the world, and the phenomenal 1st quarter performance of gold relative to every other major asset in the world makes for a very compelling bullish case and on the other hand the physical gold demand trends paint a very bleak, if not scary, picture. Please click here to continue reading.

Breadth of the US Equity Market

The seven+ year bull market in US equities, which was mostly propelled by the high, Fed induced, equity risk premium, massive financial engineering, and innovation in fracking, is beginning to show signs of cracking. Please click here to continue reading.

Global US Dollar Credit

In a paper published, in early 2015, by the Bank for International Settlements the authors successfully demonstrate that, while global banks are deleveraging, and reducing their US dollar credit to non-US borrowers, the Federal Reserve’s attempts at compressing the term premium, via its portfolio rebalancing channel, has pushed global bond investors away from low yielding US Treasuries and into higher yielding US dollar bonds issued by non-financials outside the US, more than offsetting the slowing credit growth of banks. Please click here to continue reading.

RBA – Chart Pack – April 2016

Here’s a great set of charts published by the Reserve Bank of Australia. Please click here for the chart pack: RBA CHART PACK – APRIL 2016

Beautiful Deleveraging

This paper was published, in early 2012, by the brilliant Mr. Ray Dalio and, in my opinion, belongs in the category of Timeless Classics. Just as one of the other great classics ‘The Wealth of Nations’ by Mr. Adam Smith, which offers a much broader understanding of the nature of human behaviour, trade, and economics, Mr. Dalio’s piece offers a much broader understanding of one of the many pieces of a giant puzzle called the World Economy, the deleveraging process.

Please click here for a link to this masterpiece: An In-Depth Look at Deleveragings