Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Cross Asset Strategy

<p>Are there fresh signs in markets that we are indeed going through a short-term wobble?</p>
<p>A close look at US yields and interest rate curves as well as the Gold price reveals that there is indeed some pain ahead before we settle into what is ultimately a bullish trend in equities.</p>

Are there fresh signs in markets that we are indeed going through a short-term wobble?
A close look at US yields and interest rate curves as well as the Gold price reveals that there is indeed some pain ahead before we settle into what is ultimately a bullish trend in equities.

Managing Director

Elan Gore

TMI Data Science

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media.  Our proprietary software, TMI Machine, is a text-mining platform designed with the buy-side & capital markets professional in mind, text-mining the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities.  TMI provides custom leading indicators and systematic trading strategies, operating at the nexus of linguistics & statistics drawing on vast experience in investment banking and hedge fund settings in senior quantitative and fundamental roles.  

TMI Data Science was founded by Elan Gore, an award-winning Senior Global Basic Materials Equity Analyst & China Economist with 15 years of experience in North American hedge funds & institutional managers; and Alessandro Porrino, Ph.D., an Algorithmic Trading Analyst and Programmer with 10 years of front-office experience ranging from complex FX option pricing to auto-hedging strategies at Bank of America Merrill Lynch and Standard Chartered.  Mr. Gore holds an MBA in Finance from New York University Stern School of Business, and Mr. Porrino holds a Ph.D. in Systems Engineering from Brunel University London.

Commodities

<ul>
<li>Last month our text-mined indicators highlighted a notable raw materials restocking underway for the second time since August; this theme did not slow down throughout December, ending the month at a new high</li>
<li>Though with very little discernible impact on commodities, our indicators saw Chinese macro sentiment peak earlier in December at +3x STDEV with some momentum lost on the margin since, driven by below-consensus Chinese retail sales and home price readings, continuing in recent days on lower-than-expected NBS and Caixin PMI releases</li>
<li>In the context of USD weakness, a wildly inflationary mindset in markets and a general restocking, commodity optimism has not wavered </li>
<li>Our commodity sentiment indicators saw broader momentum in December, with already-surging copper momentum joined by crude, aluminum, uranium and nickel; iron ore and steel may be coming off the boil, but markets remain extraordinarily tight</li>
<li>Gold sentiment appears to have fully stabilized after the post-election risk-on shock</li>
</ul><div class="content-highlight"><p>TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </p></div>


Last month our text-mined indicators highlighted a notable raw materials restocking underway for the second time since August; this theme did not slow down throughout December, ending the month at a new high
Though with very little discernible impact on commodities, our indicators saw Chinese macro sentiment peak earlier in December at +3x STDEV with some momentum lost on the margin since, driven by below-consensus Chinese retail sales and home price readings, continuing in recent days on lower-than-expected NBS and Caixin PMI releases
In the context of USD weakness, a wildly inflationary mindset in markets and a general restocking, commodity optimism has not wavered 
Our commodity sentiment indicators saw broader momentum in December, with already-surging copper momentum joined by crude, aluminum, uranium and nickel; iron ore and steel may be coming off the boil, but markets remain extraordinarily tight
Gold sentiment appears to have fully stabilized after the post-election risk-on shock
TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Indicators: Commodity Sentiment Review - Restocking On, But China Macro Momentum May Have Peaked

<ul>
<li>In last month's <a href="https://www.smartkarma.com/insights/tmi-snapshot-text-mining-the-thematics-behind-gold-s-disappointing-fall" target="_blank" data-smartkarma-citation="insights:45821" rel="noopener">TMI Snapshot: Text-Mining the Thematics Behind Gold's Disappointing Fall</a> we observed a sharp decline in mentions of gold as an inflation hedge relative to a dramatic increase in mentions of Bitcoin in the same context in the media</li>
<li>Given aggressive signaling of institutional BTC adoption since, we revisit the topic of BTC vs. gold across a few vectors in effort to characterize the state of relative sentiment </li>
<li>Sentiment on BTC as a store of value is up +2x STDEVs to its highest in nearly a year, while sentiment on gold as a store of value has fallen -1.6x STDEVs to levels last seen in April, with no signs of improvement yet; volumetrically, media discussion of BTC as a store of value hit an all-time high in November and continues to increase</li>
<li>Faint signs of gold stabilization are seen in the inflation discussion, where mentions of gold in the context of inflation saw negative momentum peak at -2x STDEVs in November but have been steadying since; BTC mentions in an inflation context continued to increase sharply</li>
<li>Mentions of BTC in the context of institutional adoption began to surge 3-4x STDEVs last month, and continue to increase at the same rapid pace</li>
<li>FOMO or not, extremely low institutional &amp; family office ownership of BTC vs. elevated gold ownership provide relative tailwinds for the cryptocurrency (absent material vol spikes) while gold positioning has only partially unwound</li>
<li>At least one noted strategist cites gold's underperformance of BTC as a reason to buy bullion here, but we have yet to see a significant catalyst</li>
</ul><div class="content-highlight"><p>TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </p></div>


In last month's TMI Snapshot: Text-Mining the Thematics Behind Gold's Disappointing Fall we observed a sharp decline in mentions of gold as an inflation hedge relative to a dramatic increase in mentions of Bitcoin in the same context in the media
Given aggressive signaling of institutional BTC adoption since, we revisit the topic of BTC vs. gold across a few vectors in effort to characterize the state of relative sentiment 
Sentiment on BTC as a store of value is up +2x STDEVs to its highest in nearly a year, while sentiment on gold as a store of value has fallen -1.6x STDEVs to levels last seen in April, with no signs of improvement yet; volumetrically, media discussion of BTC as a store of value hit an all-time high in November and continues to increase
Faint signs of gold stabilization are seen in the inflation discussion, where mentions of gold in the context of inflation saw negative momentum peak at -2x STDEVs in November but have been steadying since; BTC mentions in an inflation context continued to increase sharply
Mentions of BTC in the context of institutional adoption began to surge 3-4x STDEVs last month, and continue to increase at the same rapid pace
FOMO or not, extremely low institutional &amp; family office ownership of BTC vs. elevated gold ownership provide relative tailwinds for the cryptocurrency (absent material vol spikes) while gold positioning has only partially unwound
At least one noted strategist cites gold's underperformance of BTC as a reason to buy bullion here, but we have yet to see a significant catalyst
TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Snapshot:  Update on Bitcoin Vs. Gold Via Text Mining

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

<p>Gold is completing the final touches of a corrective cycle amid washed out sentiment readings and a plunge in flows. This sets up a nice contrarian buying opportunity.</p><p>Near term hurdles for gold stem from a USD bounce cycle and inflation expectations backing off.</p><p>Gold shares offer a more leveraged play. Bull wedge is clear in GDX as the proxy for gold shares with buy support near 34 and then again at a more extreme 31 support. A good macro set up that will reward by nearly 80%.</p>

Gold is completing the final touches of a corrective cycle amid washed out sentiment readings and a plunge in flows. This sets up a nice contrarian buying opportunity.Near term hurdles for gold stem from a USD bounce cycle and inflation expectations backing off.Gold shares offer a more leveraged play. Bull wedge is clear in GDX as the proxy for gold shares with buy support near 34 and then again at a more extreme 31 support. A good macro set up that will reward by nearly 80%.

<ul>
<li>Following the November melt-up, we text-mine for clues on inventory restocking dynamics going into year-end</li>
<li>While references to a general inventory restocking in the global financial media are up nearly +4x STDEVs, our data suggests this is the second notable raw materials restocking wave since the recovery began, following a more robust restocking seen in August; nonetheless, the current phase is abnormal relative to typical year-end seasonality, highlighting much-anticipated pent-up demand</li>
<li>Our short-term broad commodity sentiment indicator hit +2x STDEVs, its highest reading since January, on 11/23; this followed a significant spike in China macro sentiment earlier in November, which was preceded by a multi-year record in our Copper sentiment indicator in the first half of the month</li>
<li>Current readings see continued positive sentiment momentum in palladium, copper, aluminum and crude, while negative sentiment persists in pulp, uranium and silver</li>
<li>Our sentiment picture for iron ore and steel has been obfuscated by Australia-China tensions, having turned neutral after readings of +3x STDEV and +1.8x STDEV in recent weeks; but our news attributions also identify reports of seasonally declining BF utilization and end demand in recent weeks</li>
<li>While raw materials-specific and short-cycle industrial restocking may pause in the next 6-8 weeks, the broader global finished goods restocking is likely to remain a supportive factor keeping commodities trading in tighter ranges relative to winter averages </li>
</ul><div class="content-highlight"><p>TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </p></div>


Following the November melt-up, we text-mine for clues on inventory restocking dynamics going into year-end
While references to a general inventory restocking in the global financial media are up nearly +4x STDEVs, our data suggests this is the second notable raw materials restocking wave since the recovery began, following a more robust restocking seen in August; nonetheless, the current phase is abnormal relative to typical year-end seasonality, highlighting much-anticipated pent-up demand
Our short-term broad commodity sentiment indicator hit +2x STDEVs, its highest reading since January, on 11/23; this followed a significant spike in China macro sentiment earlier in November, which was preceded by a multi-year record in our Copper sentiment indicator in the first half of the month
Current readings see continued positive sentiment momentum in palladium, copper, aluminum and crude, while negative sentiment persists in pulp, uranium and silver
Our sentiment picture for iron ore and steel has been obfuscated by Australia-China tensions, having turned neutral after readings of +3x STDEV and +1.8x STDEV in recent weeks; but our news attributions also identify reports of seasonally declining BF utilization and end demand in recent weeks
While raw materials-specific and short-cycle industrial restocking may pause in the next 6-8 weeks, the broader global finished goods restocking is likely to remain a supportive factor keeping commodities trading in tighter ranges relative to winter averages 
TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Indicators: December Commodity Sentiment - Restocking into Winter on Pent-Up Demand Expectations

United States

Gold is a chemical element with the symbol Au (from Latin: aurum) and the atomic number 79. In its purest form, it is a bright, slightly reddish yellow, dense, soft, malleable and ductile metal. Chemically, gold is a transition metal and a group 11 element. It is one of the least reactive chemical elements, and is solid under standard conditions. The metal therefore occurs often in free elemental (native) form, as nuggets or grains, in rocks, in veins and in alluvial deposits. It occurs in a solid solution series with the native element silver (as electrum) and also naturally alloyed with copper and palladium. Less commonly, it occurs in minerals as gold compounds, often with tellurium (gold tellurides).

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Bonds & Gold Ready for a Bounce

A bounce in Bonds and Gold could be seen as a short term warning sign for equities in this market - still a time for caution ahead of better...

Shyam Devani

TMI Indicators: Commodity Sentiment Review - Restocking On, But China Macro Momentum May Have Peaked

TMI's commodity sentiment indicators saw improved breadth in December as restocking continues to drive reflation; but China macro momentum may have...

Elan Gore

TMI Snapshot: Update on Bitcoin Vs. Gold Via Text Mining

We text-mine for clues on gold vs. Bitcoin as competing stores of value. The divergence in sentiment remains unrelenting, with only faint signs of...

Elan Gore

Gold and GDX Macro Bull Set Up

Gold is completing the final touches of a corrective cycle amid washed out sentiment readings and a plunge in flows. This sets up a nice contrarian...

Thomas Schroeder

TMI Indicators: December Commodity Sentiment - Restocking into Winter on Pent-Up Demand Expectations

We text-mine for clues on the current restocking, and believe the anticipation of pent-up demand is likely to keep the commodities trading in a...

Elan Gore

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