“In order of importance to me are: 1) the long term trend, 2) the current chart pattern, and 3) picking a good spot to buy or sell.”
Ed Seykota
EQUITY MARKETS – INDICES
Very interesting dynamics out there.
Europe and the broader developed markets went into uptrends last week, while the US mostly sat there, chewing through yet another AI capex scare that threw the chips and memory names around. Again.
The leadership change across Asia continues too. South Korea is still stuck in a volatile downtrend, and so are Taiwan and Japan. The only one trending up is China, and in particular the large-cap tech trading in Hong Kong.
Otherwise, not much changes. The global AI race is on, the money keeps pouring down the datacenter chain, and the economy stays as K-shaped as it gets.
SHORT-TERM TREND CHANGES SINCE LAST WEEK
• MSCI EAFE – DEVELOPED MARKETS: sideways ➝ uptrend
• DAX – GERMANY: sideways ➝ uptrend
MEDIUM-TERM TREND CHANGES SINCE LAST WEEK
• MSCI EM – EMERGING MARKETS: sideways ➝ uptrend
COT CHANGES SINCE LAST WEEK
• NONE
Highlight for the week, shown below. 👇
FOREX
Well, the dollar finally cracked. It took yen intervention to do it, but that breakout test is answered, for now.
The DXY lost its uptrend on both timeframes, with the euro, the yen, and pretty much everything else crawling out of their downtrends. Now we need a follow-through, a ceasefire would likely do it.
And gold, finally. What was just a hint the week before turned into the real thing last week, easing out of its downtrend at last. Not backing up the truck yet, but a potentially topping dollar here is the green light we’ve been waiting on. Getting ready to take our first positions in a long while.
SHORT-TERM TREND CHANGES SINCE LAST WEEK
• DXY – US DOLLAR INDEX: uptrend ➝ sideways
• EUR/USD – EURO: downtrend ➝ sideways
• CHF/USD – SWISS FRANC: downtrend ➝ sideways
• JPY/USD – JAPANESE YEN: downtrend ➝ sideways
• MXN/USD – MEXICAN PESO: sideways ➝ uptrend
• BRL/USD – BRAZILIAN REAL: uptrend ➝ sideways
• NZD/USD – NEW ZEALAND DOLLAR: sideways ➝ uptrend
• AU/USD – GOLD: downtrend ➝ sideways
• ETH/USD – ETHEREUM: uptrend ➝ sideways
• INR/USD – INDIAN RUPEE: downtrend ➝ sideways
• SGD/USD – SINGAPORE DOLLAR: sideways ➝ uptrend
• PLN/USD – POLISH ZLOTY: downtrend ➝ sideways
• SEK/USD – SWEDISH KRONA: downtrend ➝ sideways
MEDIUM-TERM TREND CHANGES SINCE LAST WEEK
• DXY – US DOLLAR INDEX: uptrend ➝ sideways
• JPY/USD – JAPANESE YEN: downtrend ➝ sideways
• MXN/USD – MEXICAN PESO: sideways ➝ uptrend
• SGD/USD – SINGAPORE DOLLAR: downtrend ➝ sideways
• RUB/USD – RUSSIAN RUBLE: sideways ➝ downtrend
COT CHANGES SINCE LAST WEEK
• NZD/USD – NEW ZEALAND DOLLAR: neutral ➝ positive
Highlight for the week, shown below. 👇
INDUSTRIAL METALS
The stabilization is turning into rotation now.
Zinc and nickel broke into uptrends, and nickel, the one we called exhausted last week, is suddenly the one leading, COT and all. Platinum firmed up too, joining palladium.
The other side, aluminum slipped back to sideways and iron ore cracked on China, so it’s not all one way. And silver, oh silver, we’ll just have to wait for it to turn, it’d likely be following the gold move.
Copper is still the anchor, still strong. Still a supply story more than a demand one, and a dollar rolling over only helps. We said we were done just holding and starting to hunt for longs, well, now we’re putting them on wherever the trend lets us.
SHORT-TERM TREND CHANGES SINCE LAST WEEK
• PLATINUM – UNITED STATES: downtrend ➝ sideways
• ALUMINUM – UNITED STATES: uptrend ➝ sideways
• IRON ORE, 61% – CHINA: sideways ➝ downtrend
• ZINC – LME, UNITED KINGDOM: sideways ➝ uptrend
• NICKEL – LME, UNITED KINGDOM: sideways ➝ uptrend
MEDIUM-TERM TREND CHANGES SINCE LAST WEEK
• ALUMINUM – UNITED STATES: uptrend ➝ sideways
• ZINC – LME, UNITED KINGDOM: sideways ➝ uptrend
COT CHANGES SINCE LAST WEEK
• NICKEL – LME, UNITED KINGDOM: neutral ➝ positive
Highlight for the week, shown below. 👇
ENERGIES
Same movie, different week. Strikes, talks, or no talks, just pause, then strikes again. Oil price swinging double digits, both ways, and still finishing right where it started, no trend changes anywhere in the complex.
And this is the part that still gets me, oil this elevated, with barely any speculative length and producers still refusing to hedge. Just remarkable.
We keep trading small for now, with the core long-term energy equity positions staying on, and we’re comfortable with that.
SHORT-TERM TREND CHANGES SINCE LAST WEEK
• NONE
MEDIUM-TERM TREND CHANGES SINCE LAST WEEK
• NONE
COT CHANGES SINCE LAST WEEK
• NONE
Highlight for the week, shown below. 👇
TREASURIES
The central bank meetings came and went, the Fed held, skipped the guidance, and the long end voted with its feet, just kept grinding higher. If they won’t raise rates, the market will do it for them.
We’ve flagged for a while that bonds simply can’t hold a rally, even when the data hands them one. The market keeps pricing the easing that always shows up when something breaks, plus the war and what it does to oil. Same structural story as ever, more deficits, more issuance, more supply.
And the private sector is still at the debt party, ordering another round of tequila. We take no longs here, save the odd trade. Let’s see how it ends.
SHORT-TERM TREND CHANGES SINCE LAST WEEK
• NONE
MEDIUM-TERM TREND CHANGES SINCE LAST WEEK
• NONE
COT CHANGES SINCE LAST WEEK
• NONE
Highlight for the week, shown below. 👇
AGRICULTURE
Round two took a breather.
The grains had just caught up to the softs, the whole thing was running, and then this week it all pulled back together, wheat, corn, soybeans, meal, canola, sugar, all sliding from short-term uptrends back to sideways. Soybean oil went even further, it actually rolled over into a downtrend.
Doesn’t move me too much. We often see a pause, you even want after a move that broad. The fundamentals haven’t moved, the fertilizer and energy damage is already done, and El Niño is still sitting out there.
We stay long what we’ve built, started in the softs, spread into wheat, and we sit tight and wait for the next setup. That’s the system.
SHORT-TERM TREND CHANGES SINCE LAST WEEK
• ORANGE JUICE – UNITED STATES: downtrend ➝ sideways
• SUGAR NO. 11 – UNITED STATES: uptrend ➝ sideways
• LUMBER – UNITED STATES: uptrend ➝ sideways
• WHEAT – UNITED STATES: uptrend ➝ sideways
• CORN – UNITED STATES: uptrend ➝ sideways
• SOYBEANS – UNITED STATES: uptrend ➝ sideways
• SOYBEAN OIL – UNITED STATES: uptrend ➝ downtrend
• SOYBEAN MEAL – UNITED STATES: uptrend ➝ sideways
• CANOLA – CANADA: uptrend ➝ sideways
MEDIUM-TERM TREND CHANGES SINCE LAST WEEK
• UREA FERTILIZER – UNITED STATES: sideways ➝ downtrend
• SUGAR NO. 11 – UNITED STATES: sideways ➝ uptrend
• SOYBEAN OIL – UNITED STATES: uptrend ➝ sideways
• SOYBEAN MEAL – UNITED STATES: sideways ➝ uptrend
COT CHANGES SINCE LAST WEEK
• SOYBEAN OIL – UNITED STATES: neutral ➝ negative
Highlight for the week, shown below. 👇
That’s it for now. Stay safe out there!
Kacper Piotr Kaminski, Cerlogic Markets Research – intel.cerlogic.com
This publication is for informational and educational purposes only and does not constitute investment advice. Markets involve risk, and every participant is responsible for their own decisions.
Thank you, Piotr.
Slight correction: VIX is now sideways in the short-term.