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

FTSE China A50 Index / Technical Analysis

<a href="https://www.smartkarma.com/entities/ftse-china-a50-index" target="_blank" data-smartkarma-citation="entities:22905:1" rel="noopener">FTSE China A50 Index (XIN9I INDEX)</a> kissed the lower pattern long support zone at 16,500 amid maturing bull divergence that sets the stage for a counter trend risk to the underside of broken trendline that will act as the next big upside target and short zone.A share exhibit the higher conviction long set up with HK still vulnerble to any SPX pullback (dip and rally the bias into late April).Hong Kong - Conviction rests with buying a swing lower near HSI 27,500 and HSCEI 10,500-600 or a breakout now as we challenge the HSI 29,200 pivot barrier with 29,500 the next hurdle.

FTSE China A50 Index (XIN9I INDEX) kissed the lower pattern long support zone at 16,500 amid maturing bull divergence that sets the stage for a counter trend risk to the underside of broken trendline that will act as the next big upside target and short zone.A share exhibit the higher conviction long set up with HK still vulnerble to any SPX pullback (dip and rally the bias into late April).Hong Kong - Conviction rests with buying a swing lower near HSI 27,500 and HSCEI 10,500-600 or a breakout now as we challenge the HSI 29,200 pivot barrier with 29,500 the next hurdle.

A50 Long Signal and Hurdles to Backswing Target

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

The Stock Exchange of Thailand (SET) has commenced a market consultation on changing the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a>, SET100 and SETHD indices to free float market cap weighted indices from the upcoming rebalance in June.The market consultation document is short on detail, but the main points are the change in index calculation from full market cap weighted to free float market cap weighted, implementation of the changes in two tranches at the June and December reviews, and implementation of quarterly changes in free float for moves of +/-5%.The biggest uncertainty for us is whether the selection of the stocks for inclusion/exclusion will use the full market cap or the free float market cap.Using the full market cap for stock selection could see 3 changes at the upcoming June review, while using free float market cap for stock selection could result in up to 6 changes at the review. The two step implementation of the free float changes will dampen the index turnover but it will still be relatively high, ranging from a one-way turnover of 7.8% for changes in free float only to 9.52% if the stock selection methodology uses free float market cap.In this Insight, we look at the proposed changes and enumerate three scenarios, the changes they will entail, the impact on the stocks and the turnover for each scenario.

The Stock Exchange of Thailand (SET) has commenced a market consultation on changing the Stock Exchange of Thailand SET 50 Index (SET50 INDEX), SET100 and SETHD indices to free float market cap weighted indices from the upcoming rebalance in June.The market consultation document is short on detail, but the main points are the change in index calculation from full market cap weighted to free float market cap weighted, implementation of the changes in two tranches at the June and December reviews, and implementation of quarterly changes in free float for moves of +/-5%.The biggest uncertainty for us is whether the selection of the stocks for inclusion/exclusion will use the full market cap or the free float market cap.Using the full market cap for stock selection could see 3 changes at the upcoming June review, while using free float market cap for stock selection could result in up to 6 changes at the review. The two step implementation of the free float changes will dampen the index turnover but it will still be relatively high, ranging from a one-way turnover of 7.8% for changes in free float only to 9.52% if the stock selection methodology uses free float market cap.In this Insight, we look at the proposed changes and enumerate three scenarios, the changes they will entail, the impact on the stocks and the turnover for each scenario.

SET50 Index - Proposed Methodology Changes: Scenarios, Names Affected & Impact

We view A shares as the lead driver for HK to turn the corner toward a more bullish stance. HSI 31k short has met our ideal 28,800 target where we reduced the bulk of our short but do see risk of a final draw down to mark a key low. A50 and H shares are our long vehicles. A50 trendline and bull support stands out as the make or break point.

We view A shares as the lead driver for HK to turn the corner toward a more bullish stance. HSI 31k short has met our ideal 28,800 target where we reduced the bulk of our short but do see risk of a final draw down to mark a key low. A50 and H shares are our long vehicles. A50 trendline and bull support stands out as the make or break point.

Quantitative Analysis

The China equity index futures market has come a long way since index futures started to trade on the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a> in 2010. There have been booms and busts, volumes and open interest have soared and plummeted, rules have been relaxed and tightened and relaxed again, and the market continues to move forward.Currently, index futures trade on the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a>, the CSI500 Index, and the <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50 Index (SSE50 INDEX)</a>. There are no published statistics on the share of volume and open interest held by institutional and non-institutional investors, so we take a stab at trying to figure out broadly what it could be.Our analysis indicates that till mid 2015, most of the volume traded was driven by retail investors and they held a lions share of open interest too. Post the market crash and subsequent resurgence, retail investors share of volume traded and open interest has likely dropped substantially due to the market entry of more institutional investors, proprietary trading shops, and quant traders. Strategies employed by non-institutional investors mainly run counter to the retail flow and that has dampened the futures basis in the recent past.

The China equity index futures market has come a long way since index futures started to trade on the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) in 2010. There have been booms and busts, volumes and open interest have soared and plummeted, rules have been relaxed and tightened and relaxed again, and the market continues to move forward.Currently, index futures trade on the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX), the CSI500 Index, and the SSE50 Index (SSE50 INDEX). There are no published statistics on the share of volume and open interest held by institutional and non-institutional investors, so we take a stab at trying to figure out broadly what it could be.Our analysis indicates that till mid 2015, most of the volume traded was driven by retail investors and they held a lions share of open interest too. Post the market crash and subsequent resurgence, retail investors share of volume traded and open interest has likely dropped substantially due to the market entry of more institutional investors, proprietary trading shops, and quant traders. Strategies employed by non-institutional investors mainly run counter to the retail flow and that has dampened the futures basis in the recent past.

China Equity Index Futures: Who Holds the Open Interest?

<a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-composite-index" target="_blank" data-smartkarma-citation="entities:22907:1" rel="noopener">SSE Composite Index (SHCOMP INDEX)</a> showing impressive rally energy ahead of CNY, more importantly it shores up macro bull support off of the key 3,450 pivot support that targets new highs. This is a macro degree break, test and secondary impulse.Composite and A50 charts denote the bull support and driver for Asia. A50 shallow dip failed to hit the ideal 17,500 buy support zone and was breaking out above the 19k pivot level with 20,400 targeted. RSI saw a nice turn at support.

SSE Composite Index (SHCOMP INDEX) showing impressive rally energy ahead of CNY, more importantly it shores up macro bull support off of the key 3,450 pivot support that targets new highs. This is a macro degree break, test and secondary impulse.Composite and A50 charts denote the bull support and driver for Asia. A50 shallow dip failed to hit the ideal 17,500 buy support zone and was breaking out above the 19k pivot level with 20,400 targeted. RSI saw a nice turn at support.

Shanghai Composite Acceleration off of Buy Support

China

The FTSE China A50 Index includes the largest 50 A Share Chinese companies by total market cap. 

FTSE China A50 Index (XIN9I INDEX)

A50 Long Signal and Hurdles to Backswing Target

FTSE China A50 Index (XIN9I INDEX) kissed the lower pattern long support zone at 16,500 amid maturing bull divergence that sets the stage for a...

Thomas Schroeder

SET50 Index - Proposed Methodology Changes: Scenarios, Names Affected & Impact

The SET has commenced a market consultation on the proposed changes to make its indices free float market cap weighted. We look at the impact on...

Brian Freitas

China/HK Buy Levels Being Met

A shares are the lead driver for HK to turn the bull corner. HSI 31k short has met our ideal 28,800 target where we reduced the bulk of our short....

Thomas Schroeder

China Equity Index Futures: Who Holds the Open Interest?

We look at the change in the market landscape for the index futures in China and try to ascertain if retail investors still hold sway or if that...

Brian Freitas

Shanghai Composite Acceleration off of Buy Support

SSE Composite Index showing impressive rally energy that shores up macro bull support off of the key 3,450 support that targets new highs. A macro...

Thomas Schroeder