Should History Hold, USDMXN at Multi-Decade Channel Resistance Signals Potential for Pivot Higher in Risk Assets, Inflation
In the first chart below I show USDMXN (USD vs. Peso). For nearly two decades back to the latter part of the 90s USDMXN has traveled in an upward-sloping channel b/t lines (1) and (2). Over time it has reached…...
Has Russia Signaled the end of the Global Emerging Market Bear Cycle?
Over and over we have used the DJI over the course of 1904-1914 as an analogy to emerging markets (via EEM as a proxy) from 2004-current. Conversely, we’ve belabored the idea that 1937 and/or 1974 are the best analogies for…...
Channeling Wayne Gretzky
Over the past few months we’ve outlined in increasing detail and conviction within the site’s bear market category that the global bull cycle from 2009 had likely come to its end in 2015. The framework we’ve used in building that case…...
SSEC Has Another ~20% of Additional Downside and is Likey to Remain in Relative Free-Fall
On the heels of our late Dec-15 post that suggested China’s depression was set to intensify in early 2016, I’ve updated that view via the SSEC plot below. The chart pattern over the past 18 months – base, large run…...
Nimr al-Nimr as Franz Ferdinand (Echoes of 1914 Update)
As far back as 7/23/15, three weeks before the CNH devaluation and a full four weeks before global risk assets began plunging, I laid out what I thought was a compelling case for the period of 2004-2015 for emerging market equities…...
USDCNH Likely to Reach Low $7s Before Any Abatement in Chinese Currency Depreciation
I have talked at length on the site about the deflationary forces behind CNH depreciation vs. the USD. My contention is that so long as a regime of CNH depreciation vs. USD is in place, global risk assets will remain…...
TED Spreads Lead & The Real Driver Behind The Fed’s Decision to Hike Rates
I’ve written a good deal this week about TED spreads blowing out significantly recently. Today I wanted to look at snapshots of the last few times TED spreads have blown out like they are now to see how the equity…...
China’s Depression Set to Intensify in the Early Part of 2016?
Based on the significant deterioration over the past year or two in electricity production in China alone, some might assume the country is in depression. Comparing the SSEC’s decline off its Jun-15 high to the move the SPX took off…...
Global Deflation and Gold as a Function of Chinese Electricity Production
In the chart below I plot monthly Chinese electricity production (white) with gold (yellow) in the top panel. In the two panels below that I plot the 24 mo and 12 mo RoCs for Chinese electricity production, respectively. Note that…...
CNH Weakness Regime = Inexorable March Toward Greater Global Financial Stress
In the chart below I plot the following over the past year: USDCNH (inverted to show Yuan weakening; white) JNK (pink) Deutsche Bank (DB) 5 Yr CDS (inverted, so decline = CDS climbing; orange) SPX (red) TED spread (inverted, so decline…...