Top 5 Charts to Help You Understand the Current State of Global Markets
Raoul Pal | Apr 24, 2023 19:41
In this week’s newsletter, we’re going to run through the top 5 market charts on our radar right now.
Let’s dive right in...
h2 GMI Chart 1: Bond Yields/h2US 2-year bond yields seem to be following a similar pattern as in 2000...
... the 10-year is also tracking this period closely...
... and when you consider that the aggregate speculative short position in US Treasuries just reached the most extreme level on record as a percentage of total open interest, the bond bull thesis is, in our opinion, becoming stronger by the day...
Additionally, DeMark daily 9 Setups have recently been quite successful in identifying inflection points on 10-year yields, and a new one was triggered on Thursday – something to keep an eye on...
Carbon is still messing around ahead of a larger break higher... eventually. If we break above 102 the targeted move is 133, roughly 50% higher from current levels. Definitely another one to watch...
Get The App
The chart of the S&P Regional Banking ETF (NYSE:KRE) is not a bullish... it still feels like consolidation before a break lower...
GMI Chart 4: Dollar Index
The US dollar index (DXY) looks to be forming a big head-and-shoulders top. A break of 101 will lead to significant downside (but all within a secular dollar bull market). This should give risk assets a tailwind...
Global equities just look like the mirror image of the DXY and appear to be forming a large head-and-shoulders bottom. Again, all eyes on a potential DXY breakdown of 101. That’s the signal to watch for and will probably suggest equities head much higher from here...
We’ll also throw in this chart on Ethereum that, as we’ve been flagging for quite some time, continues to trade a lot like Bitcoin during the 2014-2016 period...
The final two charts we'll leave you to mull over deal with positioning. At -7% of total open interest, speculative short positioning for the S&P 500 has just reached its highest level since August 2011...
Also, according to the April BofA Fund Manager Survey, everyone is still SUPER bearish despite the slow grind higher in equities as we continue to climb the “wall of worry”.
Looking at the data, the pain trade is clearly still higher, not lower...
Next week, as we are writing the May GMI Monthly, we will not release a weekly update but, as ever, we will share something special with you from one of our recent GMI Monthly publications. Stay tuned!
***
Want to read these the moment they come out? Sign up entirely free for my newsletter, Short Excerpts From Global Macro Investor here. New articles published every single Sunday.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.