Macro Dragon: The Key Technical Levels... 2650 / 2800
Macro Dragon = Cross-Asset Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.
Macro Dragon: The Key Technical Levels... 2650 / 2800
Folks as a pin going forward during this turbulent times, let us please remember:
The Covid-19 crisis with all its challenges, stress, chaos & opportunities will also eventually pass. What defines humanity & ourselves as individuals is how we both individually & collectively act under adversity. Think of how you want to look back over this period, doing your part to keep your family healthy, society healthy & functioning. Keeping a cool head, when others are losing theirs, maintaining an objective list of positive aspects & negative aspects of the policy responses & economic shock the world is / could go through. And lastly gratitude, sympathy & empathy for one another. Parts of Asia got / are getting through this & so too shall the RoW.
The one big positive from all this, is it reminds us we are all One. Plus we are not at the top of the food chain. Covid-19 does not care if you are rich, poor, what your ethnicity & skin color are, what passport/s you hold, nor what you age or profession is. Our greatest achievements are almost always those that we collectively do with others & sometimes as in this case, potentially as species.
Lastly keep your mind open to growth & opportunities.
Top of Mind…
- Bear Market Regime or the lows are in, one thing is for sure, we have broken some key technical lvl on stocks. On the SPX we have now had two consecutive closes above the key fibo lvl of 38.2% of 2650.89, even if yest pull back at -0.16% was a touch above that at 2659
- So that 2650 lvl is a key support for the bulls & key resistance for the bears. To the topside its the even more critical 50.0% retracement lvl of 2793. So basically this key 2650 – 2800 range is going to be key in determining whether we break out of it to the upside, a clear sign that the bulls are back & the lows are clearly in, or if we dip back below indicating things are once again less clear
- The Fibo retracement range on a daily candle bar chart (top wick to bottom wick is from 3393.52 to 2191.86
- Obviously recent rally – rightly or wrongly – has been around the perception that we are likely through the worst in NY after two consecutive days of falling deaths, then we got the highest one-day total o/n by 731 (and that was +100)
- However as we have flagged before on Macro Dragon, its not about the death count for the market (that’s a lagging indicator), it being on the other side of peak velocity & the price action is telling us that we are there – at least in regards to NY. Not all regions are equal in the US, so poorer states with larger concentration of minorities will likely have a much lower weighting in regards to the US Equity markets moves
- So now its really about when the economy is opening up, as well as whether the consensus view on a V-shaped recovery (which we disagree with) is priced in correctly – not sure how long we have to wait & what the pricing would be, i.e. if the US shutdown is extended until June or Jul, what then for equities?
- Bojo is still in ICU. China recorded its first day with no death from Covid-19 this year & is set to lift the lock-down on Wuhan – basically 3m after a complete & systematic quarantine. Japan is setting the bell-curve again, with a fiscal policy initiative that is c. 20% of GDP - this is around the levels that most countries will get to. Blackstone's CEO says we could see -$5 trn (c. 25%) wiped out of US GDP...
- We shall see. Strong convictions loosely held
- One more day until the long good Friday wkd – think we could all use some downtime
We could continue to be in a gang buster period of volatility both to the up & down side until at least mid-Apr to back-end of May. Some, time decay is needed in the system, both from a Covid-19 spread (past peak velocity upwards), even bigger & even better government / fiscal / monetary policy response, to overall heads of governments giving this the 2nd & 3rd order consequences thinking that it needs. This to shall pass. Keep you minds & hearts open
Good luck to everyone out there, be nimble & position accordingly
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.