Potential Cyclical High In Place for SPX Relative to Crude
The chart below shows the long-term ratio of the SPX vs. crude. The pattern is well-defined in that it develops a large left shoulder over the course of 1985-1997 (SPX out-performance), followed by a distinct head from 1997-2000 (acceleration of…...
CNH in Macro Driver Seat, Has Potential to Create Global Deflation Under PBoC Devaluation Campaign
The relationship b/t the USD and CNH increasingly appears to be the single most important global macro input factor. USD’s relevance has always been well appreciated but the closer I examine it v-a-v CNH, and China in general, the more significant…...
Absent Incremental QE from B-of-J, USDJPY Threatening a Major, Sustained Move Lower
The USDJPY cross closed above its 12 mo MA for every month beginning with Oct-12 and ending Aug-15. That’s a massive three year up-trend. However, in all of the charts below it’s technicals appear quite bearish and in my view, threaten a…...
PMs Appear Green-Lit to Advance
In the chart below take note of the simple fact that the DXY index (USD) appears poised to break down from a consolidation/flag pattern formed by lines (1) and (2) through much of 2015 at inset (A) while at inset (B), it is…...
Nikkei Update
I wanted to update some of my Nikkei work, specifically the analogs comparing the DJI from Feb-26 through its Aug-29 top to the Nikkei from May-13 until current. Rather than spend time reviewing the original logic of why it made…...
USDJPY Testing 35-Year Resistance
Below we have weekly close and monthly HLC views of USDJPY. On each we find lines (1) and (2) resistance. Line (1) is 35-year resistance for USDJPY dating back to ~1978. Combined with line (2) which runs to ~200, the…...
Yen Has Reached Multi-Decade Support
In the monthly chart below the Japanese Yen has reached multi-decade support lines (1) and (2) after breaking down in the past two weeks from the bearish-looking flag/consolidation pattern we had recently highlighted in this post. Line (2) dates to…...
Consolidation of Important FX Cross Nearing Conclusion
We’ve discussed the prospects for and likelihood of Yen weakness going back to summer 2012 and our general belief here has been a simple one: so long as reflation is and remains the core pillar of Abenomics, so too must the…...
Global Macro & Cycle Round-Up
Last week we highlighted the USD and the critical long-term swing resistance it was pressing against. As it turns out, the USD blew past that resistance later in the week, per the chart below. In that chart, note that said…...
Potential for Sustained Yuan Weakness Likely Signals End of 20-Year Global Economic Paradigm, Nascent Beginnings of New One
The Chinese Yuan, and all of its concomitant strength, was likely the most important global macro asset of the past 20 years, 1994 to present day. It effectively defined a global economic paradigm with the following implications for the West…...