Technical Analysis

In this briefing:

1. SPX Fade from Macro Pivot Highs
2. Gold Fresh Support Points
3. Crude Oil Growth Barometer

1. SPX Fade from Macro Pivot Highs

SPX is pressing into the dual top zone at 2,950 and a make or break point for the global cycle. After the break above 2,800 we view this as another important juncture for the US cycle.

RSI near that 70 resistance is the ideal fade zone with MACD resistance noted above with the trendline marking an key inflection point given we have yet to fully unwind bear divergence.

Core sectors are still underperforming as long as we stay below 2,950.

US 5 year yield is resting in key pivot support at 1.80% and will act as a bounce/break signals for the 10yr in a lead manner. We outline clear medium term resistance and support points on a pivotal yield turn.

2. Gold Fresh Support Points

We wanted to update fresh add levels to gold in light of upside pressure on the macro breakout point and the lack of a pullback to work with.

More tactical support points and upside targets are featured as well as our base case macro upside target levels once we clear 1,370.

We see a number of factors that support a gold breakout. Spec positioning is light, central bank demand, USD lacking an impulse for direction, diminishing rising rate risk and disappointment after the G20 meeting.

We have been adding in some gold shares which continue to outperform gold and will impulsive higher once gold breaks out.

3. Crude Oil Growth Barometer

Our bearish view on WTI from the 67 area is playing out nicely, however our bigger concern is the signal oil is sending regarding future economic growth when combined with plunging bond yields (warning of recession).

WTI’s recent bounce to 54 was touted as a fresh short zone for a break to new lows. Oil’s roadmap is laid out with a tradable bounce from new lows in the shape of a counter trend rise. Once this rise is complete we see future weakness threatening the WTI late 2019 low.

Weekly cycle indicators are just rolling over and that is a bigger macro negative for oil after we see a counter trend recovery attempt that is mapped out in the daily chart cycle. Energy shares have been a short theme and will once again offer a good short set up once a bounce cycle terminates.

In this briefing:

1. USD/Thai Baht Macro Cycle Low
2. U.S. Equities: Mixed Signals Punctuate Muted Outlook
3. Short Taiwan Tech Set Ups
4. Nifty Impulse Sell Signals with Macro Risk
5. Japan Restrictions to South Korea – Chart Points

1. USD/Thai Baht Macro Cycle Low

THB (USDTHB CURNCY) below 31 is flagging valuation concerns with high conviction chart bottoming signals. The macro cycle is due to bottom near the 30.50 level with risk toward the lower 30 area as the risk limit area. 

Micro and macro cycle bull divergence is maturing in the daily and weekly charts and forms when the trend is near a terminal point stemming from diminishing USD sell volumes and momentum (THB tends to spike into a low however) as the market finds itself very long the THB.

USD/THB macro cycle is etching out a cycle low at a time when intervention risk is rising to stem the Baht’s strength.

A USD cycle low will provide headwinds for the SET rally and front run an equity peak. Exports plays on our radar.

2. U.S. Equities: Mixed Signals Punctuate Muted Outlook

While the S&P 500 has hit marginal new highs, price action of the S&P 500 and the price and RS of several Sectors/subsectors is similar to the periods leading up to the October 2018 and May 2019 breakdowns. We draw several similarities in today’s report, and we continue to believe upside is likely to be muted from here barring additional positive developments.

3. Short Taiwan Tech Set Ups

The following tech stocks in Taiwan are nearing a counter trend terminal point for the rally. We outline short set ups with support pivots and resistance/short levels that will act as downside or sell triggers.

Taiwan Semiconductor Manufacturing Company (TSMC) (2330 TT) , Catcher Technology (2474 TT) , Hon Hai Precision Industry (2317 TT) , Au Optronics (2409 TT) and Largan Precision (3008 TT) .

This group of stocks exhibit corrective rallies on poor buy volumes and viewed as an underlying negative. Recent upside in Taiwan tech from May shows a lethargic and overlapping structure associated with dead cat bounces with new lows in store.

Any NDX false upside breakout will play into the Taiwan tech cycle as will a SOX break below 1,440 (trigger support).

4. Nifty Impulse Sell Signals with Macro Risk

In our recent Nifty insight Buy Nifty Weakness but Watch Out Overhead , we outlined that the Nifty was due to reach for a minor new high but to watch out overhead as macro bear signals were mounting.

Weekly MACD divergence is one of the most powerful trend signals. Nifty has not confirmed new highs for years now, as upside momentum begins to deteriorate (less buy conviction, waning buy volume and extreme optimism are why such divergences form).

This webcast outlines key tactical pivot and trade levels/action points as well as the bearish downside impulsive noted in the banking sector and Nifty over recent sessions. It is this bear impulsive that raises alarm bells and warns that the macro bear cycle is close at hand.

From the 12,000+ top zone with risk to 12,500 we expect a decline of over 20%. Odds of a macro peak and hard downturn have increased to 85%.

USD/INR has met bull turn support at 68.30-50 where the USD will find support. Rise above 70 would represent an upside breakout.

5. Japan Restrictions to South Korea – Chart Points

This webcast delves into near term inflection chart points for Samsung Electronics (005930 KS)Lg Electronics (066570 KS)SK Hynix Inc (000660 KS) and Fast Retailing (9983 JP) linked to Douglas Kim‘s insight The Dangerous Truth of Japan’s Restrictions of Key Chemical Materials to South Korea? .

SEC’s key rejection at 47k was a focus level to turn from long to short and called to turn the bias in the Kospi back to negative.

Pressure in this group only compounds the drivers for the bearish Korea cycle that has resumed course.

In this briefing:

1. Gold Fresh Support Points
2. Crude Oil Growth Barometer
3. Global Ex-U.S. Equity Strategy: Cautiously Optimistic Outlook Intact

1. Gold Fresh Support Points

We wanted to update fresh add levels to gold in light of upside pressure on the macro breakout point and the lack of a pullback to work with.

More tactical support points and upside targets are featured as well as our base case macro upside target levels once we clear 1,370.

We see a number of factors that support a gold breakout. Spec positioning is light, central bank demand, USD lacking an impulse for direction, diminishing rising rate risk and disappointment after the G20 meeting.

We have been adding in some gold shares which continue to outperform gold and will impulsive higher once gold breaks out.

2. Crude Oil Growth Barometer

Our bearish view on WTI from the 67 area is playing out nicely, however our bigger concern is the signal oil is sending regarding future economic growth when combined with plunging bond yields (warning of recession).

WTI’s recent bounce to 54 was touted as a fresh short zone for a break to new lows. Oil’s roadmap is laid out with a tradable bounce from new lows in the shape of a counter trend rise. Once this rise is complete we see future weakness threatening the WTI late 2019 low.

Weekly cycle indicators are just rolling over and that is a bigger macro negative for oil after we see a counter trend recovery attempt that is mapped out in the daily chart cycle. Energy shares have been a short theme and will once again offer a good short set up once a bounce cycle terminates.

3. Global Ex-U.S. Equity Strategy: Cautiously Optimistic Outlook Intact

Despite negative recent developments, we have remained steadfast in our belief that weakness in May has presented an attractive time to add exposure. In our June International Strategy, we highlight various themes which lead to this belief, along with areas of the market where we see actionable opportunities within our favorite Groups, spanning the Consumer Staples, Technology, Consumer Discretionary, Services, Health Care, and Financial Sectors.

In this briefing:

1. U.S. Equities: Mixed Signals Punctuate Muted Outlook
2. Short Taiwan Tech Set Ups
3. Nifty Impulse Sell Signals with Macro Risk
4. Japan Restrictions to South Korea – Chart Points
5. All-Time Closing Highs Fails To Impress

1. U.S. Equities: Mixed Signals Punctuate Muted Outlook

While the S&P 500 has hit marginal new highs, price action of the S&P 500 and the price and RS of several Sectors/subsectors is similar to the periods leading up to the October 2018 and May 2019 breakdowns. We draw several similarities in today’s report, and we continue to believe upside is likely to be muted from here barring additional positive developments.

2. Short Taiwan Tech Set Ups

The following tech stocks in Taiwan are nearing a counter trend terminal point for the rally. We outline short set ups with support pivots and resistance/short levels that will act as downside or sell triggers.

Taiwan Semiconductor Manufacturing Company (TSMC) (2330 TT) , Catcher Technology (2474 TT) , Hon Hai Precision Industry (2317 TT) , Au Optronics (2409 TT) and Largan Precision (3008 TT) .

This group of stocks exhibit corrective rallies on poor buy volumes and viewed as an underlying negative. Recent upside in Taiwan tech from May shows a lethargic and overlapping structure associated with dead cat bounces with new lows in store.

Any NDX false upside breakout will play into the Taiwan tech cycle as will a SOX break below 1,440 (trigger support).

3. Nifty Impulse Sell Signals with Macro Risk

In our recent Nifty insight Buy Nifty Weakness but Watch Out Overhead , we outlined that the Nifty was due to reach for a minor new high but to watch out overhead as macro bear signals were mounting.

Weekly MACD divergence is one of the most powerful trend signals. Nifty has not confirmed new highs for years now, as upside momentum begins to deteriorate (less buy conviction, waning buy volume and extreme optimism are why such divergences form).

This webcast outlines key tactical pivot and trade levels/action points as well as the bearish downside impulsive noted in the banking sector and Nifty over recent sessions. It is this bear impulsive that raises alarm bells and warns that the macro bear cycle is close at hand.

From the 12,000+ top zone with risk to 12,500 we expect a decline of over 20%. Odds of a macro peak and hard downturn have increased to 85%.

USD/INR has met bull turn support at 68.30-50 where the USD will find support. Rise above 70 would represent an upside breakout.

4. Japan Restrictions to South Korea – Chart Points

This webcast delves into near term inflection chart points for Samsung Electronics (005930 KS)Lg Electronics (066570 KS)SK Hynix Inc (000660 KS) and Fast Retailing (9983 JP) linked to Douglas Kim‘s insight The Dangerous Truth of Japan’s Restrictions of Key Chemical Materials to South Korea? .

SEC’s key rejection at 47k was a focus level to turn from long to short and called to turn the bias in the Kospi back to negative.

Pressure in this group only compounds the drivers for the bearish Korea cycle that has resumed course.

5. All-Time Closing Highs Fails To Impress

The S&P 500 made a new all-time closing high following the largely as-expected U.S.-China trade cease-fire agreement, but it did so unconvincingly. We would not call it a breakout as the market closed well off of the opening highs and not one cyclical Sector is decisively in new high territory. Overall, the market is sending mixed signals. Barring additional positive developments we believe upside is likely to be muted from here. In today’s report we highlight attractive Groups and stocks within Health Care, Services, and Technology: Diagnostic Imaging, Construction & Engineering, Large-Cap, and Solar Energy.

In this briefing:

1. Short Taiwan Tech Set Ups
2. Nifty Impulse Sell Signals with Macro Risk
3. Japan Restrictions to South Korea – Chart Points
4. All-Time Closing Highs Fails To Impress
5. Medipal Holdings Upside to New High with Trend Non Confirmations Maturing

1. Short Taiwan Tech Set Ups

The following tech stocks in Taiwan are nearing a counter trend terminal point for the rally. We outline short set ups with support pivots and resistance/short levels that will act as downside or sell triggers.

Taiwan Semiconductor Manufacturing Company (TSMC) (2330 TT) , Catcher Technology (2474 TT) , Hon Hai Precision Industry (2317 TT) , Au Optronics (2409 TT) and Largan Precision (3008 TT) .

This group of stocks exhibit corrective rallies on poor buy volumes and viewed as an underlying negative. Recent upside in Taiwan tech from May shows a lethargic and overlapping structure associated with dead cat bounces with new lows in store.

Any NDX false upside breakout will play into the Taiwan tech cycle as will a SOX break below 1,440 (trigger support).

2. Nifty Impulse Sell Signals with Macro Risk

In our recent Nifty insight Buy Nifty Weakness but Watch Out Overhead , we outlined that the Nifty was due to reach for a minor new high but to watch out overhead as macro bear signals were mounting.

Weekly MACD divergence is one of the most powerful trend signals. Nifty has not confirmed new highs for years now, as upside momentum begins to deteriorate (less buy conviction, waning buy volume and extreme optimism are why such divergences form).

This webcast outlines key tactical pivot and trade levels/action points as well as the bearish downside impulsive noted in the banking sector and Nifty over recent sessions. It is this bear impulsive that raises alarm bells and warns that the macro bear cycle is close at hand.

From the 12,000+ top zone with risk to 12,500 we expect a decline of over 20%. Odds of a macro peak and hard downturn have increased to 85%.

USD/INR has met bull turn support at 68.30-50 where the USD will find support. Rise above 70 would represent an upside breakout.

3. Japan Restrictions to South Korea – Chart Points

This webcast delves into near term inflection chart points for Samsung Electronics (005930 KS)Lg Electronics (066570 KS)SK Hynix Inc (000660 KS) and Fast Retailing (9983 JP) linked to Douglas Kim‘s insight The Dangerous Truth of Japan’s Restrictions of Key Chemical Materials to South Korea? .

SEC’s key rejection at 47k was a focus level to turn from long to short and called to turn the bias in the Kospi back to negative.

Pressure in this group only compounds the drivers for the bearish Korea cycle that has resumed course.

4. All-Time Closing Highs Fails To Impress

The S&P 500 made a new all-time closing high following the largely as-expected U.S.-China trade cease-fire agreement, but it did so unconvincingly. We would not call it a breakout as the market closed well off of the opening highs and not one cyclical Sector is decisively in new high territory. Overall, the market is sending mixed signals. Barring additional positive developments we believe upside is likely to be muted from here. In today’s report we highlight attractive Groups and stocks within Health Care, Services, and Technology: Diagnostic Imaging, Construction & Engineering, Large-Cap, and Solar Energy.

5. Medipal Holdings Upside to New High with Trend Non Confirmations Maturing

Medipal Holdings (7459 JP) shows a clear up trend with upside momentum concerns brewing given non confirmation of recent highs by trending models.

Our more tactical view is bullish off of noted trendline support at 2,300-50 for a try on a minor new high. Buying weakness is the game plan for a new high with a stop below trendline support. A new high shows projection to 2,890 and risk to a marginally higher level.

It is this minor new high that we envision a potential intermediate cycle peak that would lead to a break below the current trendline support as bear divergence matures. It is this primary trendline support that will inflect the macro cycle and seek out secondary support if broken.

In this briefing:

1. Crude Oil Growth Barometer
2. Global Ex-U.S. Equity Strategy: Cautiously Optimistic Outlook Intact

1. Crude Oil Growth Barometer

Our bearish view on WTI from the 67 area is playing out nicely, however our bigger concern is the signal oil is sending regarding future economic growth when combined with plunging bond yields (warning of recession).

WTI’s recent bounce to 54 was touted as a fresh short zone for a break to new lows. Oil’s roadmap is laid out with a tradable bounce from new lows in the shape of a counter trend rise. Once this rise is complete we see future weakness threatening the WTI late 2019 low.

Weekly cycle indicators are just rolling over and that is a bigger macro negative for oil after we see a counter trend recovery attempt that is mapped out in the daily chart cycle. Energy shares have been a short theme and will once again offer a good short set up once a bounce cycle terminates.

2. Global Ex-U.S. Equity Strategy: Cautiously Optimistic Outlook Intact

Despite negative recent developments, we have remained steadfast in our belief that weakness in May has presented an attractive time to add exposure. In our June International Strategy, we highlight various themes which lead to this belief, along with areas of the market where we see actionable opportunities within our favorite Groups, spanning the Consumer Staples, Technology, Consumer Discretionary, Services, Health Care, and Financial Sectors.

In this briefing:

1. Global Ex-U.S. Equity Strategy: Cautiously Optimistic Outlook Intact

1. Global Ex-U.S. Equity Strategy: Cautiously Optimistic Outlook Intact

Despite negative recent developments, we have remained steadfast in our belief that weakness in May has presented an attractive time to add exposure. In our June International Strategy, we highlight various themes which lead to this belief, along with areas of the market where we see actionable opportunities within our favorite Groups, spanning the Consumer Staples, Technology, Consumer Discretionary, Services, Health Care, and Financial Sectors.

In this briefing:

1. Nifty Impulse Sell Signals with Macro Risk
2. Japan Restrictions to South Korea – Chart Points
3. All-Time Closing Highs Fails To Impress
4. Medipal Holdings Upside to New High with Trend Non Confirmations Maturing
5. Where to Sell the USD Post Bounce

1. Nifty Impulse Sell Signals with Macro Risk

In our recent Nifty insight Buy Nifty Weakness but Watch Out Overhead , we outlined that the Nifty was due to reach for a minor new high but to watch out overhead as macro bear signals were mounting.

Weekly MACD divergence is one of the most powerful trend signals. Nifty has not confirmed new highs for years now, as upside momentum begins to deteriorate (less buy conviction, waning buy volume and extreme optimism are why such divergences form).

This webcast outlines key tactical pivot and trade levels/action points as well as the bearish downside impulsive noted in the banking sector and Nifty over recent sessions. It is this bear impulsive that raises alarm bells and warns that the macro bear cycle is close at hand.

From the 12,000+ top zone with risk to 12,500 we expect a decline of over 20%. Odds of a macro peak and hard downturn have increased to 85%.

USD/INR has met bull turn support at 68.30-50 where the USD will find support. Rise above 70 would represent an upside breakout.

2. Japan Restrictions to South Korea – Chart Points

This webcast delves into near term inflection chart points for Samsung Electronics (005930 KS)Lg Electronics (066570 KS)SK Hynix Inc (000660 KS) and Fast Retailing (9983 JP) linked to Douglas Kim‘s insight The Dangerous Truth of Japan’s Restrictions of Key Chemical Materials to South Korea? .

SEC’s key rejection at 47k was a focus level to turn from long to short and called to turn the bias in the Kospi back to negative.

Pressure in this group only compounds the drivers for the bearish Korea cycle that has resumed course.

3. All-Time Closing Highs Fails To Impress

The S&P 500 made a new all-time closing high following the largely as-expected U.S.-China trade cease-fire agreement, but it did so unconvincingly. We would not call it a breakout as the market closed well off of the opening highs and not one cyclical Sector is decisively in new high territory. Overall, the market is sending mixed signals. Barring additional positive developments we believe upside is likely to be muted from here. In today’s report we highlight attractive Groups and stocks within Health Care, Services, and Technology: Diagnostic Imaging, Construction & Engineering, Large-Cap, and Solar Energy.

4. Medipal Holdings Upside to New High with Trend Non Confirmations Maturing

Medipal Holdings (7459 JP) shows a clear up trend with upside momentum concerns brewing given non confirmation of recent highs by trending models.

Our more tactical view is bullish off of noted trendline support at 2,300-50 for a try on a minor new high. Buying weakness is the game plan for a new high with a stop below trendline support. A new high shows projection to 2,890 and risk to a marginally higher level.

It is this minor new high that we envision a potential intermediate cycle peak that would lead to a break below the current trendline support as bear divergence matures. It is this primary trendline support that will inflect the macro cycle and seek out secondary support if broken.

5. Where to Sell the USD Post Bounce

DXY weekly cycle is breaking down on the back of non confirmation in trending indicators and the break of rising wedge support (falling wedge resistance the case of the Euro). Fresh Euro buy support lies near or just under 1.13.

This webcast outlines what currencies in Asia we are trading a USD bounce and where to set intermediate short levels with a focus in the USD/SGD and USD/KRW near respective resistance points at 1.36 and 1,170.

USD/THB is moving into a more strategic low and leading the USD bottom cycle in Asia with a focus on the 30.50 level. We closed our short from 32.00.

EM FX short term lows are visible in a number of 5 wave counts that call for a dollar bounce and one that sets up a short in line with our DXY shift. 

We like the CAD on a USD bounce as the top commodity currency.

Strategy points – Euro above 1.13 is bearish DXY (below 96.50). Weekly DXY cycle rolling over and calls for selling USD rallies. Sterling may have difficulty at 1.28. USD/JPY 109/108 pivotal for global risk (keep in mind the USD/JPY bearish formation is of a macro degree). US 10yr yield looks very oversold into weakness below 2% and may be a variable that helps the USD bounce near term. Our bet is for a bounce to 2.18% with scope to 2.30% (remain macro bearish yield to 1.62%).

In this briefing:

1. Japan Restrictions to South Korea – Chart Points
2. All-Time Closing Highs Fails To Impress
3. Medipal Holdings Upside to New High with Trend Non Confirmations Maturing
4. Where to Sell the USD Post Bounce
5. U.S.Dollar Weakness A Tailwind For International Markets

1. Japan Restrictions to South Korea – Chart Points

This webcast delves into near term inflection chart points for Samsung Electronics (005930 KS)Lg Electronics (066570 KS)SK Hynix Inc (000660 KS) and Fast Retailing (9983 JP) linked to Douglas Kim‘s insight The Dangerous Truth of Japan’s Restrictions of Key Chemical Materials to South Korea? .

SEC’s key rejection at 47k was a focus level to turn from long to short and called to turn the bias in the Kospi back to negative.

Pressure in this group only compounds the drivers for the bearish Korea cycle that has resumed course.

2. All-Time Closing Highs Fails To Impress

The S&P 500 made a new all-time closing high following the largely as-expected U.S.-China trade cease-fire agreement, but it did so unconvincingly. We would not call it a breakout as the market closed well off of the opening highs and not one cyclical Sector is decisively in new high territory. Overall, the market is sending mixed signals. Barring additional positive developments we believe upside is likely to be muted from here. In today’s report we highlight attractive Groups and stocks within Health Care, Services, and Technology: Diagnostic Imaging, Construction & Engineering, Large-Cap, and Solar Energy.

3. Medipal Holdings Upside to New High with Trend Non Confirmations Maturing

Medipal Holdings (7459 JP) shows a clear up trend with upside momentum concerns brewing given non confirmation of recent highs by trending models.

Our more tactical view is bullish off of noted trendline support at 2,300-50 for a try on a minor new high. Buying weakness is the game plan for a new high with a stop below trendline support. A new high shows projection to 2,890 and risk to a marginally higher level.

It is this minor new high that we envision a potential intermediate cycle peak that would lead to a break below the current trendline support as bear divergence matures. It is this primary trendline support that will inflect the macro cycle and seek out secondary support if broken.

4. Where to Sell the USD Post Bounce

DXY weekly cycle is breaking down on the back of non confirmation in trending indicators and the break of rising wedge support (falling wedge resistance the case of the Euro). Fresh Euro buy support lies near or just under 1.13.

This webcast outlines what currencies in Asia we are trading a USD bounce and where to set intermediate short levels with a focus in the USD/SGD and USD/KRW near respective resistance points at 1.36 and 1,170.

USD/THB is moving into a more strategic low and leading the USD bottom cycle in Asia with a focus on the 30.50 level. We closed our short from 32.00.

EM FX short term lows are visible in a number of 5 wave counts that call for a dollar bounce and one that sets up a short in line with our DXY shift. 

We like the CAD on a USD bounce as the top commodity currency.

Strategy points – Euro above 1.13 is bearish DXY (below 96.50). Weekly DXY cycle rolling over and calls for selling USD rallies. Sterling may have difficulty at 1.28. USD/JPY 109/108 pivotal for global risk (keep in mind the USD/JPY bearish formation is of a macro degree). US 10yr yield looks very oversold into weakness below 2% and may be a variable that helps the USD bounce near term. Our bet is for a bounce to 2.18% with scope to 2.30% (remain macro bearish yield to 1.62%).

5. U.S.Dollar Weakness A Tailwind For International Markets

Markets are showing signs of weakening at logical resistance as we anticipated in last week’s Int’l Compass – we recommend being selective in new purchases. At the same time we are seeing a number of indicators that are giving signals conducive to higher equity prices, meaning global equities may be gearing up for an eventual breakout topside resistance. In this report we highlight some attractive and actionable themes (Miners, consumer staples, and several attractive individual set ups in Thailand) along with indicators that support our overall constructive outlook.

In this briefing:

1. Int’l Human Resources & Employment Services Stocks Are Bottoming — Add Exposure

1. Int’l Human Resources & Employment Services Stocks Are Bottoming — Add Exposure

Our international Human Resources & Employment Services Groups are showing signs of price and RS bottoms throughout Japan, Europe, and the UK. We believe short-term pullbacks in the names highlighted today should be bought, particularly in light of the Fed hinting at increased flexibility and the potential for improving trade headlines. 

Today we highlight our favorite setups within our int’l HR & Employment Services Groups: Recruit Holdings Co., Ltd. (6098-JP), PERSOL HOLDINGS CO. LTD. (2181-JP), Meitec Corporation (9744-JP), Teleperformance SE (TEP-FR), Randstad NV (RAND-NL), Adecco Group AG (ADEN-CH), and PageGroup PLC (PAGE-GB). Add exposure.