Working Thesis for 2015
It’s that time again. Time to put pen to paper and make our best attempt at crystal-balling the upcoming year. If we had to name 2015 or give it a theme we’d probably call it “The Year of Capitulation”. By…...
IBEX to Outperform SPX
In the chart below the ratio of the IBEX vs. SPX is attempting to break above long-term resistance line (1). Look at how well-behaved the ratio b/t these two assets has been across this line historically. Also note the precipitous…...
Predictable
Such were the materially large moves in Ukraine’s equity and FX markets over the past ~10 trading days, per the transparent technical patterns in the chart below, which portended that both were on the verge of transpiring. Of course, the…
More Thoughts on Global Equity Allocations
Over the past two months or so we have become increasingly bearish / less bullish on the U.S. from an intermediate-term cyclical standpoint. We first began questioning the remaining intermediate-term upside of this 46 month cyclical rally in the U.S. in…...
Global Equity Spread-Trade Update
I want to reiterate my belief that Europe, like China, is set to out-perform U.S. equities moving forward. That thesis remains grounded in the chart below, which shows the ratio b/t the Vanguard Euro Vipers ETF and the SPX. The…...
Spread Trade Idea in Global Equities
As you know, I’ve gotten structurally bearish over the past two weeks. Even if I’m wrong, I’m of the opinion that any U.S. equity upside is going to be more limited from current levels, likely no higher than Dow 16,250…...
Time for Euro Financials to Surprise, but in Which Direction?
In later April we suggested over-weighting this group in general and pointed to RBS specifically. Since that time the Dow Jones Euro Financial Index is up ~800 bps vs. a ~700 bps increase in the SPX. Not tremendous. However, RBS…...
Europe No Longer a Critical Global Macro Driver?
Times sure do change. Europe, for all of 2010-2012, was “the” key driver to global macro trends. Everything seemed to revolve around one peripheral country’s crisis after the next. That’s not the case anymore. The phrase “Euro-zone debt crisis” seems…...
What to Make of the Recent Decline in Euro Financials?
Put this together yesterday, failed to get it posted. Anyhow, believe it’s time to over-weight this group again, as we did last summer before it was trendy to “buy Europe“. That call led to huge alpha being generated by being…...
Analog Update – SPX/Dow Remain on Track for Materially More Upside this Year
In the chart below I’ve updated the 1988/1989 4th/5th consecutive annual gain analog. Seems as if we completely just skipped over the ~400 bps correction the Dow had in this recent ~1 month window in 1989 and are apt to…...