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

US Treasury (10 Yr Generic) / Technical Analysis

<div>We have been bullish yield from early August with the US 10yr meeting our 1.50/55%  tactical target where a stall is due before resuming the yield rise. US 5yr yield exhibits a more aggressive bull wedge. </div><div></div><div>This yield spike is a key input into a DXY drive to and top near the 94 zone. A yield breakout above 1.55% would be more dollar supportive.</div><div></div><div>Headwinds: Equity weakness in October would induce a yield pullback from noted resistance points. Tamer inflation data would also be a driving force. </div><div></div><div>Yields will find it harder to rise in late Q4 given odds of a rate hike delay (shift to 2022) on slower growth and growing concern of a policy mistake.</div>

We have been bullish yield from early August with the US 10yr meeting our 1.50/55%  tactical target where a stall is due before resuming the yield rise. US 5yr yield exhibits a more aggressive bull wedge. This yield spike is a key input into a DXY drive to and top near the 94 zone. A yield breakout above 1.55% would be more dollar supportive.Headwinds: Equity weakness in October would induce a yield pullback from noted resistance points. Tamer inflation data would also be a driving force. Yields will find it harder to rise in late Q4 given odds of a rate hike delay (shift to 2022) on slower growth and growing concern of a policy mistake.

US Yield Spike Meeting Targets but More in Store After October Lull

Our SPX pullback view from 4,500+ (reduced long exposure) is meeting our 4,400 pullback objective where we expected a tactical rally if this level holds. We are seeing more ominous pressure points build after a bounce attempt.DJI and RTY have been our short plays from early September highs. Plan to hold these shorts as we try the long side at SPX 4,400 +/-. USD add call on September 3 (we called to buy the USD on dips) reaching for the DXY 94 PT.Trendline and price pivot support critical to hold early this week. A break would call to press on our short group in Europe and Asia.Bear divergence and MACD break of support stands out as a key risk- off concern.AAII bear sentiment and sell volumes spiked on Friday (futures expiry is a likely culprit of noise).US 10yr yield breakout above 1.37% targets 1.50%.Not only is market breadth and divergence a problem spot but the US faces government debt ceiling jitters, workforce vaccine backlash and a bond yield push above 1.37% (inflation concerns resurface) that could add to or be a catalyst to the weak technical posture.A key inflection point is at hand.

Our SPX pullback view from 4,500+ (reduced long exposure) is meeting our 4,400 pullback objective where we expected a tactical rally if this level holds. We are seeing more ominous pressure points build after a bounce attempt.DJI and RTY have been our short plays from early September highs. Plan to hold these shorts as we try the long side at SPX 4,400 +/-. USD add call on September 3 (we called to buy the USD on dips) reaching for the DXY 94 PT.Trendline and price pivot support critical to hold early this week. A break would call to press on our short group in Europe and Asia.Bear divergence and MACD break of support stands out as a key risk- off concern.AAII bear sentiment and sell volumes spiked on Friday (futures expiry is a likely culprit of noise).US 10yr yield breakout above 1.37% targets 1.50%.Not only is market breadth and divergence a problem spot but the US faces government debt ceiling jitters, workforce vaccine backlash and a bond yield push above 1.37% (inflation concerns resurface) that could add to or be a catalyst to the weak technical posture.A key inflection point is at hand.

Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

Yesterday's downside inflation surprise in the US yesterday led to a rally in US Treasuries. EM rates lagged the move, leading to the EM-US 10y spread rising close to its widest in a decade when adjusted for the beta. The spread has been wider twice before, both of which were during risk-off episodes. This time around, the divergence is unusual as it has not coincided with a period marked by risk aversion, rather the US rates volatility has been falling. We thus continue to find a diversified basket of EM local debt to be a better asset to own than DM rates.Separately, the attached file is a snapshot of the EM 10y rates market in which we seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to an EM rates index.

Yesterday's downside inflation surprise in the US yesterday led to a rally in US Treasuries. EM rates lagged the move, leading to the EM-US 10y spread rising close to its widest in a decade when adjusted for the beta. The spread has been wider twice before, both of which were during risk-off episodes. This time around, the divergence is unusual as it has not coincided with a period marked by risk aversion, rather the US rates volatility has been falling. We thus continue to find a diversified basket of EM local debt to be a better asset to own than DM rates.Separately, the attached file is a snapshot of the EM 10y rates market in which we seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to an EM rates index.

Rates 10y Dashboard: EM-US 10y Spread Close to the Widest in a Decade

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.

The Russell 2000 (IWM) has been moving sideways for 7 months between $208 and $234.50, emblematic of the mixed market environment that we still find ourselves in. As long as $208 support holds we remain constructive on the overall market. On the plus side, conditions have been improving over the past two weeks -- not getting worse (more on this below). This increases the odds of a breakout above $234.50 on the IWM in the coming weeks or months, which would signal the start of a new broad-based bull market.Charts Highlighted: EEM, JD, NFLX, TSLA, YZCAY, BTU, HCC, ARCH, ARLP, CG, ARES, AB, CNS, VRTS, BSIG, VCTR, FDUS, PLD, REXR, FR, STAG, IIPR, TRNO, PSA, EXR, CUBE, LSI, and NSA

The Russell 2000 (IWM) has been moving sideways for 7 months between $208 and $234.50, emblematic of the mixed market environment that we still find ourselves in. As long as $208 support holds we remain constructive on the overall market. On the plus side, conditions have been improving over the past two weeks -- not getting worse (more on this below). This increases the odds of a breakout above $234.50 on the IWM in the coming weeks or months, which would signal the start of a new broad-based bull market.Charts Highlighted: EEM, JD, NFLX, TSLA, YZCAY, BTU, HCC, ARCH, ARLP, CG, ARES, AB, CNS, VRTS, BSIG, VCTR, FDUS, PLD, REXR, FR, STAG, IIPR, TRNO, PSA, EXR, CUBE, LSI, and NSA

Conditions Continue To Improve; EM Buy Signal; Growth Outperforming; Gold Vs. SPX Downtrend Intact

Founder

Olivier Desbarres

Exacting. Excellent. Exceeding. Exemplary.

4X Global Research

4X Global Research was founded in 2017 to provide institutional and corporate clients with the substantive research, high-quality analysis and thoughtful insight on Emerging and G20 economies and financial markets they need to make informed and timely decisions and gain an edge in their investments.

Federal Reserve Chairperson Jerome Powell’s pre-prepared opening <a href="https://www.federalreserve.gov/newsevents/speech/powell20210827a.htm" target="_blank" rel="noopener">speech</a>at the Jackson Hole Symposium on Friday afternoon was a key litmus test for the central bank. Powell took yet another small step towards an eventual tapering this year of the Fed’s asset purchases and a tightening of arguably extremely loose monetary policy while pouring cold water on any talk of policy rate hikes, broadly in line with our expectations. Price action in US rates, equity and FX markets in the past four days would suggest that Powell has successfully cleared yet another important hurdle. US Treasury yields across the maturity spectrum are down since Thursday’s close in the bottom half of their post 16th June Fed policy meeting range, the US Dollar has weakened about 0.7% to a 3-week low and the S&amp;P 500 is hovering near a record-high (see Figure 1). <a href="https://www.chicagofed.org/publications/nfci/index" target="_blank" rel="noopener">National financial conditions</a> remain very easy and supportive of domestic economic growth. Notably recent market moves have been orderly, with volatility still pretty modest. Perhaps unsurprisingly given low US Treasury yields and buoyant US (and global) equities, Emerging Market currencies, particularly high-yielders, have outperformed in the past month.The next hurdle for the Fed and financial markets is the 22nd September policy meeting, with the spike in market volatility following the 16th June meeting still fresh in their minds. We think the Fed will refrain from giving a more specific timeline for the start of its taper and do so only at its <a href="https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm" target="_blank" rel="noopener">3rd November</a> meeting to retain some data-dependent policy flexibility. However, we expect the Fed’s updated dot-chart to show a further hawkish shift in terms of the appropriate timing for policy rate hikes. Whether this jars, even if temporarily, with Powell’s disassociation between QE and interest rate policy is open to debate.We are for now sticking to our core scenario that the Fed will only start hiking its policy rate in 2023 but that the gap between the start of the taper and the start of the rate hiking cycle will be smaller than the 23 months gap in 2014-2015.Nevertheless, the Fed will want to engineer a slow landing – music to the ears of doves and bulls but arguably a concern for hawks fearful of the Fed and financial markets stalling.

Federal Reserve Chairperson Jerome Powell’s pre-prepared opening speechat the Jackson Hole Symposium on Friday afternoon was a key litmus test for the central bank. Powell took yet another small step towards an eventual tapering this year of the Fed’s asset purchases and a tightening of arguably extremely loose monetary policy while pouring cold water on any talk of policy rate hikes, broadly in line with our expectations. Price action in US rates, equity and FX markets in the past four days would suggest that Powell has successfully cleared yet another important hurdle. US Treasury yields across the maturity spectrum are down since Thursday’s close in the bottom half of their post 16th June Fed policy meeting range, the US Dollar has weakened about 0.7% to a 3-week low and the S&amp;P 500 is hovering near a record-high (see Figure 1). National financial conditions remain very easy and supportive of domestic economic growth. Notably recent market moves have been orderly, with volatility still pretty modest. Perhaps unsurprisingly given low US Treasury yields and buoyant US (and global) equities, Emerging Market currencies, particularly high-yielders, have outperformed in the past month.The next hurdle for the Fed and financial markets is the 22nd September policy meeting, with the spike in market volatility following the 16th June meeting still fresh in their minds. We think the Fed will refrain from giving a more specific timeline for the start of its taper and do so only at its 3rd November meeting to retain some data-dependent policy flexibility. However, we expect the Fed’s updated dot-chart to show a further hawkish shift in terms of the appropriate timing for policy rate hikes. Whether this jars, even if temporarily, with Powell’s disassociation between QE and interest rate policy is open to debate.We are for now sticking to our core scenario that the Fed will only start hiking its policy rate in 2023 but that the gap between the start of the taper and the start of the rate hiking cycle will be smaller than the 23 months gap in 2014-2015.Nevertheless, the Fed will want to engineer a slow landing – music to the ears of doves and bulls but arguably a concern for hawks fearful of the Fed and financial markets stalling. 

Powell Put in Play but Greater Challenges Ahead

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

US Treasury (10 Yr Generic) (GT10 GOVT)

US Yield Spike Meeting Targets but More in Store After October Lull

US 10yr break above 1.37% is meeting our 1.50/55% target where a stall is due before resuming the yield rise. US 5yr yield exhibits a more...

Thomas Schroeder

SPX 4,400 Big Pivot for Global Risk

SPX pullback view from 4,500+ (reduced long exposure) is meeting our 4,400 target where we see a tactical rally if this level holds. More ominous...

Thomas Schroeder

Rates 10y Dashboard: EM-US 10y Spread Close to the Widest in a Decade

With US yields rallying following the CPI data, the spread of EM rates to the US widened further. We continue to find a diversified basket of EM...

Gautam Jain, PhD, CFA

Conditions Continue To Improve; EM Buy Signal; Growth Outperforming; Gold Vs. SPX Downtrend Intact

Emerging markets (EEM) appear to be bottoming; one attractive buy candidate is JD.com (JD). We also highlight buy opportunities within Energy...

Vermilion Research

Powell Put in Play but Greater Challenges Ahead

Powell passed Jackson Hole test - market vol has remained subdued, rates have fallen and equities rallied. But Fed faces sterner tests as it ambles...

Olivier Desbarres

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)