Airline Outperformance vs. Railroads to Continue, Accelerate
This post is a spread trade dedicated to two components of the DJ Transportation Index. In the chart below the ratio of the DJ Railroad Index vs. the DJ Airline Index is breaking below key, long-term support lines (1)-(3). Given…...
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…...
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…...
30s10s Curve Steepener a Prelude to Higher Gold Prices
In the chart below I’ve plotted the ratio b/t the yield on 30 (TYX) and 10 (TNX) year treasuries over time. The ratio is simply another way to look at the bps spread diff b/t the two. Note that at each…...
After Brief Respite, Rates Set to Rise Again
After a brief respite, I believe rates are set to rise again, especially on the long bond. This was a thesis we originally laid out here on 6/15/15. That day rates on the 30 yr closed at 3.09% vs. the…...
Commodities/EMs Likely Near a Bottom
The operative word here is near. In the chart below the CRB Index is fast approaching long-term support on a monthly basis. Support dates back to the 1999 and 2002 lows for commodities. In addition, the ratio of crude vs. gold…...
Clubber Lang May Finally Be Ready to Fight
On 7/29/14 we highlighted Mr. T as an increasingly attractive long. At the time we didn’t openly advocate an immediate position in the name, but said the following: “Would look to purchase T on a break-out this week assuming it…...
Continue to Favor Telco Equipment & With It a New Long Idea in the Industry
Late last year on 12/23 we had a post that suggested the DJ Telco Equipment Index would be a source of relative out-performance vs. the SPX in 2015. Our proxy for that call, the IGN ETF, has delivered +725 bps…...
Europe Relative Strength Worth Monitoring
In our 2015 working thesis post we highlighted the interesting technical set-up in Europe. Specifically, we highlighted this ratio chart of the STOXX600 vs. SPX which was sitting on 25-yr channel support at the time and suggested if ever Europe had…...
Cap-Weighted (Topix), Not Price (Nikkei), to Lead way in Japan
Moving forward, I believe various market-cap weighted Topix indexes will out-perform the price-weighted Nikkei. As such, in an ideal world we’d own the Topix. However, that brings with it complexities. For one, there is no liquid USD-denominated domestic product to express this…...