2016 can be another year of weak performance for the emerging markets. USD/CNY chart will have significant impact on emerging market currencies and equities. In the second half of 2015, sharp devaluation of the Yuan resulted in a sell-off in emerging market equities. Current technical outlook for the USD/CNY suggests further devaluation for the Chinese currency […]
First half of 2016 can be a volatile time for developed market bonds. Yields can move higher from current levels. I’m not sure what could be the economic trigger for such price action but charts suggest possible trend periods in the coming months. Here are the charts I will be following in the first quarter […]
Dow Jones Averages are price weighted indices, while most of the broad market indices such as S&P 500 and Nasdaq 100 are market-cap weighted. In a price-weighted index higher prices will influence the direction of the average more than lower prices, regardless of the actual size of the company. Dow Jones Composite Index measures changes within […]
Weak energy and metal prices continue to put pressure on the Canadian economy and its currency. Since the beginning of 2011, Canadian dollar has been losing ground against the U.S. dollar (for earlier analysis on USD/CAD). 1.3040 was an important resistance – levels that were seen during the 2008 financial meltdown. In the last quarter […]
Emerging markets are experiencing renewed weakness after three months of sideways consolidation. MSCI Emerging Markets index sold-off between May and August 2015. Since August the index rebounded but hardly reached the strong resistance area formed by several long-term trend lines. In August, 850-900 area was broken down with a long monthly price action. Three months […]
Silver is likely to outperform Gold prices in the coming months. Long-term chart of SILVER/GOLD suggests the ratio is at a major turning point. Multi-decade support reversed the ratio three times over the past two decades and this could be the fourth time. Reversal from the strong support in the past resulted in an approximately 1.5x-1.6x outperformance […]
Since the beginning of 2011, developed market equities have been performing better than emerging markets. This trend is still intact. Though there is one emerging European equity market that is showing clear strength against its peers. That is HUNGARY. Budapest SE index is ready for another upward leg, after an initial breakout followed by a pullback. […]
Weak energy prices are putting pressure on oil exporting economies. Kuwait and Nigeria are two of the large weights in the MSCI Frontier Markets index. Both countries indices are testing critical long-term support levels. Already weak stock market performance can continue in the following months if there are further breakdowns. Saudi Arabia, another major oil […]
Following one month of positive price action, weakness resumed in the emerging market equities. Until previously broken support levels are breached on the upside, strength in emerging market equities will be classified as counter-trend move. In other words, MSCI Emerging Markets index should clear 860-900 area on the upside to reverse the larger-scale downtrend. Since the beginning […]
Small caps show relative weakness vs. the large caps when investors move out of riskier/high-beta names and into relatively safe large caps. Opposite can be said during small cap strength vs. large caps. There are two ways to capture this relationship to understand if there is a possibility of small cap outperformance in the following […]
