Head of Research and Global Chief Strategist, Steno Research

Andreas Steno

Head of Research and Global Chief Strategist

Macro and Geopolitical Research House

Steno Research

Steno Research is a new macro and geopolitical research house. We are based out of Copenhagen, Denmark, but have an international team and a strong network of sources and partners around the world. The team is lead by Andreas Steno, previous global head of strategy at Nordea Bank, and Mikkel Rosenvold, former chief consultant in the Danish Ministry of Finance.

Cross Asset Strategy

<ul><li>Happy Sunday and welcome to our flagship editorial! What a week.</li><li>The BoJ no longer has a firm guidance towards higher 10yr bond yields, the Fed accepted higher long bond yields as an excuse to pause and economic data has been abysmal.</li><li>That cocktail has so far allowed the everything rally to thrive in a way we haven’t seen in quarters, but the feedback loop introduced by the big central banks may limit the scope of the bear market rally.</li></ul>

Happy Sunday and welcome to our flagship editorial! What a week.The BoJ no longer has a firm guidance towards higher 10yr bond yields, the Fed accepted higher long bond yields as an excuse to pause and economic data has been abysmal.That cocktail has so far allowed the everything rally to thrive in a way we haven’t seen in quarters, but the feedback loop introduced by the big central banks may limit the scope of the bear market rally.

Steno Signals #72 – When a Recession Meets a Melt-Up in Equities and Bonds

Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

Equity Derivatives

<ul>
<li>The <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei</a> closed the month of October down, 4 months down in a row (CC=-4), very OVERSOLD MONTHLY. The 30600 support indicated in our last MONTHLY insight did hold somehow. </li>
<li>We think the Nikkei could continue to rally in November, but this explosive, fast rally, at one point will have to retrace back, before it can continue up. </li>
<li>The index could rally for 2 months, into December. The target prices for the end of the rally are near 34000.</li>
</ul>


The Nikkei closed the month of October down, 4 months down in a row (CC=-4), very OVERSOLD MONTHLY. The 30600 support indicated in our last MONTHLY insight did hold somehow. 
We think the Nikkei could continue to rally in November, but this explosive, fast rally, at one point will have to retrace back, before it can continue up. 
The index could rally for 2 months, into December. The target prices for the end of the rally are near 34000.


EQD | Nikkei 225 (NKY)'s November Rally: How Far Can It GO?

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

TSE Tokyo Price Index TOPIX / Technical Analysis

<ul>
<li>The MSCI ACWI index ACWI-US briefly fell below major support at $90.50-$91.50, though we do not consider it a "decisive" breakdown and we now see a false breakdown (bullish).</li>
<li>On MSCI ACWI (local currency), a false breakdown appears to already be in place, which is bullish as long as the index does not break to a new low.</li>
<li>MSCI EM (EEM-US) continues to hold above $36.50-$37 support, while MSCI ACWI ex-US (ACWX-US) and EAFE (EFA-US) remain above supports at $45 and $65-$66, respectively. Pullback is likely over.</li>
</ul>


The MSCI ACWI index ACWI-US briefly fell below major support at $90.50-$91.50, though we do not consider it a "decisive" breakdown and we now see a false breakdown (bullish).
On MSCI ACWI (local currency), a false breakdown appears to already be in place, which is bullish as long as the index does not break to a new low.
MSCI EM (EEM-US) continues to hold above $36.50-$37 support, while MSCI ACWI ex-US (ACWX-US) and EAFE (EFA-US) remain above supports at $45 and $65-$66, respectively. Pullback is likely over.


Japan Bullishly Inflecting; Constructive Outlook Intact; Global Pullback Likely Over

Quantitative Analysis

<ul>
<li>Numerous studies conducted over the past few decades have researched the “month of the year effect” in global stock markets, and tend to agree that some effects do exist.</li>
<li>Most studies however concur that seasonality, on its own, is a weak predictor of performance. We call these studies “Naïve Seasonality Analysis”, for reasons that we will explain here.</li>
<li>Based on the above premise, in this Smartkarma Original we are going to propose a methodology to improve seasonality research, to identify <em>when</em> specific months can deliver the best returns.</li>
</ul>


Numerous studies conducted over the past few decades have researched the “month of the year effect” in global stock markets, and tend to agree that some effects do exist.
Most studies however concur that seasonality, on its own, is a weak predictor of performance. We call these studies “Naïve Seasonality Analysis”, for reasons that we will explain here.
Based on the above premise, in this Smartkarma Original we are going to propose a methodology to improve seasonality research, to identify when specific months can deliver the best returns.


Influence of Monthly Time Patterns on Seasonal Effects in Asian Stock Markets: NKY and HSI

<ul>
<li>Last week, the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei</a> closed down at 30991.69 (CC=-2). The index's sell-off could end in November, marking a temporary bottom from which a rally could start.</li>
<li>MRM models say that if the Nikkei bounces this week, it could rise for 3 weeks and reach a price area between 31624 (Q3/CC=+1) and 32892 (Q3/Gen.Pattern Boxplot).</li>
<li>The upcoming rally comes as a reaction to quite OVERSOLD conditions, as previously discussed, but could be followed by another pullback. This insight points to where the rally may end.</li>
</ul>


Last week, the Nikkei closed down at 30991.69 (CC=-2). The index's sell-off could end in November, marking a temporary bottom from which a rally could start.
MRM models say that if the Nikkei bounces this week, it could rise for 3 weeks and reach a price area between 31624 (Q3/CC=+1) and 32892 (Q3/Gen.Pattern Boxplot).
The upcoming rally comes as a reaction to quite OVERSOLD conditions, as previously discussed, but could be followed by another pullback. This insight points to where the rally may end.


EQD | If the Nikkei Begins to Rally, Where Will It Encounter Resistance?

Japan

The Nikkei-225 Stock Average is a price-weighted average of 225 top-rated Japanese companies listed in the First Section of the Tokyo Stock Exchange. The Nikkei Stock Average was first published on May 16, 1949, where the average price was ¥176.21 with a divisor of 225. 

Nikkei 225 (NKY INDEX)

Steno Signals #72 – When a Recession Meets a Melt-Up in Equities and Bonds

The BoJ no longer has a firm guidance towards higher 10yr bond yields, the Fed accepted higher long bond yields as an excuse to pause and economic...

Steno Research

EQD | Nikkei 225 (NKY)'s November Rally: How Far Can It GO?

The Nikkei closed October down, 4 months down, OVERSOLD, now rallying in November but will retrace back if it goes up too fast. The rally could...

Nico Rosti

Japan Bullishly Inflecting; Constructive Outlook Intact; Global Pullback Likely Over

The MSCI $ACWI briefly fell below our $90.50 support but quickly reclaimed, suggesting a false breakdown and the likely end to this pullback in...

Vermilion Research

Influence of Monthly Time Patterns on Seasonal Effects in Asian Stock Markets: NKY and HSI

Numerous studies conducted over the past few decades have researched the “month of the year effect” in global stock markets, and tend to agree...

Nico Rosti

EQD | If the Nikkei Begins to Rally, Where Will It Encounter Resistance?

The Nikkei's recent sell-off may reach a temporary bottom in November, the following rally could last for 3 weeks, with target price in the 31624...

Nico Rosti

Steno Signals #72 – When a Recession Meets a Melt-Up in Equities and Bonds

The BoJ no longer has a firm guidance towards higher 10yr bond yields, the Fed accepted higher long bond yields as an excuse to pause and economic...

Steno Research

EQD | Nikkei 225 (NKY)'s November Rally: How Far Can It GO?

​The Nikkei closed October down, 4 months down, OVERSOLD, now rallying in November but will retrace back if it goes up too fast. The rally could...

Nico Rosti

Japan Bullishly Inflecting; Constructive Outlook Intact; Global Pullback Likely Over

​The MSCI $ACWI briefly fell below our $90.50 support but quickly reclaimed, suggesting a false breakdown and the likely end to this pullback in...

Vermilion Research

Influence of Monthly Time Patterns on Seasonal Effects in Asian Stock Markets: NKY and HSI

Numerous studies conducted over the past few decades have researched the “month of the year effect” in global stock markets, and tend to agree...

Nico Rosti

EQD | If the Nikkei Begins to Rally, Where Will It Encounter Resistance?

​The Nikkei's recent sell-off may reach a temporary bottom in November, the following rally could last for 3 weeks, with target price in the 31624...

Nico Rosti

The Nikkei closed October down, 4 months down, OVERSOLD, now rallying in November but will retrace back if it goes up too fast. The rally could...

The MSCI $ACWI briefly fell below our $90.50 support but quickly reclaimed, suggesting a false breakdown and the likely end to this pullback in...

The Nikkei's recent sell-off may reach a temporary bottom in November, the following rally could last for 3 weeks, with target price in the 31624...