2014: Continuation of the liquidity driven rally.

Happy New year 2014!
Nikkei - my favorite long - was the top market of 2013, and still is.
S&P, long signal confirmed in April and broke first target 1750 and now heading to 1850/2000
Eurostoxx broke 2012/2011 highs and is heading slowly towards 3300
Both were cautious long , and the expected correction in H2 never came, with no sell signal  triggered

Gold, long in the summer went up to be back where it was. Stop not triggered, still a - contrarian buy.


Nikkei Monthly chart: Keep the long

Broke downtrend line, the momentum is still up heading towards 18500, then 21000
Overbought, but still upward momentum

Keep the long










S&P500 Monthly: first target reached 1750

S&P500, overbought, is heading towards 1850-2000 area.

Keep the long














Eurostoxx 50 Monthly: Broke 2012 highs

Heading towards 3300- 3500 area.
Momentum still up though market is overbought.

Keep long













Conclusions: Not many changes vs my previous recommendations, ie, keep long on Japan , still my favorite long, then US, and Europe ( in that order) has some further espace. Gold is now a contrarian BUY.
USD chart has no clear signals


Happy investing

Jean

七転び八起き (Nanakorobi yaoki)...Fall 7 times, stand up 8. Keep Nikkei. New long in gold.

Last month Nikkei corrected and stopped on support (Fibo retracement), I recommended a BUY in my previous update. 
The chart did not lie (again), and Nikkei rebounded 2000 points since then... No change in my long recommendation, now that Super Abe has all the power to throw his 3rd arrow...I keep my long for the next level 17000-18000 area for the Nikkei...

European markets and US markets continue their slow rally, some upside and no change in my targets. Be vigilant though.

The new development for this month is a long in Gold who fell and rebounded on a support (1250's). I bought Gold confidently for long term with the previous high (1700's) as target.
The best would be to buy physical gold, but I bought a Physical Gold ETF, PHAU.L which is a share of tracker who owns the bullion...

I think the Equity market rally is not supported by real good fundamentals(top line not there), but mainly QE/liquidity driven, hence a long in Gold is a good hedge. A strong correction is expected in 2013H2...

Finally, in jan 2013, I mentioned about a long in Peugeot (~5€) , the share is now >8.5 €, and still has further upside.10€, then 15€ are the next targets.

In short: Keep invested in Japan, buy gold...


Happy investing, and BONNES VACANCES...

What goes up fast, fall fast... Buy Opportunity on Nikkei

In my last month blog, I noted that Nikkei rose too quickly and I cautioned that a market that goes up fast, falls faster...The problem is that I did not knew when...
It is therefore necessary to have a solid investment plan:
1) Clarify your investment time frame (mine is 6-12 months)
2) Use appropriate charts timescale (monthly for me)
3) Have a target, a stop on each of the investment, BEFORE  you buy or short...and review them regularly
Remember, emotion is the enemy of any investor, as we tend to take our loss too slow, and take our profit too fast..so have a plan...

In the Nikkei case, a 3-6 months investor would/may have taken profit , as Nikkei reached the first target last month. In my case, I keep it as long as stop are not triggered, and currently the index is on  a support.

Nikkei Weekly chart: On support, BUY

The index corrected spectacularly fast to test fibo retracement and 20 week moving average. The index is extrememely oversold.
For those who missed the rally, it is the opportunity to Buy...

Though I always make up my own mind, it is reassuring to know that Mr Soros just took a long position in Japan (and short on Yen)





Gold Miners monthly charts: Further downside

As the index broke the last support, it is heading towards 2008 lows....Too early to Buy gold...














US 10Year Bond Yield weekly chart: Bonds about to fall?

The US 10yr yield chart is developping a bottom. (Yield graph is the inverse of Bond price)

A break up of current level will accelerate the sell off in bonds.









Dollar Index Monthly chart: USD to fall?

There is a negative divergence on the Dollar index, in other words there is a warning signal on the USD... It needs to fall below 79 to confirm the reversal.. which I doubt as....

a fall in USD vs Yen for instance is against Super Abe's plan...





Conclusion:
Buy (or increase longs in)  Nikkei, keep the longs in US, Europe.. Don't buy the bonds as likely to fall, and it is still too early to buy gold.


Happy investing...

Yoku Yatta Abe san! Japan is Top performer on the month again as I expected!

What a month again: Japan led global markets, S&P500 confirmed the break, DAX is still testing the historical highs, Gold collapsed against all odds...But Two warnings signs for a coming reversal are to note: 1) Japan jumped -too?- quickly to my first target ...remember: what goes up fast tends to fall fast(er).... 2) I was concerned that a disappointing Q1 reporting would trigger a correction...Well reporting were not great but Markets stubbornly ignored them...Eventually, fundamental catches up and market will go where it should...

=> Japan is still the best Long to have, then far after Europe, & US...I also keep an eye on gold which despite the correction has further downside... Not yet a buy...


Nikkei Monthly Chart:

Nikkei continues its rally and is now at the last Fibonacci  retracement 14,000, that's 30% since my long recommendation in Feb...It is overbought with still upward momemtum...Next target is the 17-18000 area.
Keep the long








S&P500 Quarterly chart:

 Last month, S&P broke an historical high, the recommendation was to buy for the agressive investors, and for the other to wait for a month... Well we have it...Buy Signal for the less aggressive punters...
The index is overbought with upward momemtum as well.... Targets are 1750 then 1850






Eurostoxx Monthly Chart:

Heading slowly towards 3000...Same as above...Overbought, up momemtum....












CRB Commodity index Monthly:

Commodities are falling slowly, and still has some (10%) downside...At the same time the USD index is moving upward slowly...














Conclusion: Long Japan for a further 30% upside.. Cautious long in Europe, and US

Banzaiiiiii, Shoow me the Money....Japan broke! US breaking...Europe is Europe...

Nikkei broke a 4 year range and fled two months in a row, at one point it was up 15%...Justified or not from a fundamental point of view, it has further to go...Super Abe will support it whatever it takes..
S&P500 broke a historical high, DAX is close to it and the rest of Europe is timid. 
With the tragedy in Cyprus, the Bozo's of Spain, Italy and France (Have they ever learnt Economy 101?), it is amazing that European indeces have not collapsed. I digress but People deserve the leaders they have chosen...The truth is that Courage is what is lacking to our leaders (should I call them annuitants) ... Sorry, back to $$$$:
No change of view since my previous blog in early Feb: Japan is still my top favorite, Europe is still a Buy, but I am cautious on this one, and US, well if Ithe S&P stays above the current level in April, I'd Buy. Please note again, that I have a 6-12 months investment time frame.

Nikkei Monthly Chart: The best Long in global equities

The index, as expected, continued to rise and jumped to the next resistance (the 50% Fibo retracement ..again Fibonacci, do you start to believe in this?)
The momentum on 2-3 months is still upward. In the short term, the market is to correct a bit as overbought.Which means Buy on weakness
The trouble is that many are recommending buy on weakness, so we may not see a correction...

The next target is still the same: 14000 and then 17000. 
Japan is the best country to be invested in, it was the top performer of the  indeces I follow (the best ones were in Africa, difficult ones to invest in). 


 S&P quarterly: Breaking historical high... Beware of the bull trap though

The index has closed above historical high (tested twice, in 2000, and 2007). I would wait and see if this level is confirmed, if confirmed, the next target is 1750's....

There is one thing I do not like to do, it is to bet on break! especially when it is historical highs ( or lows)

The upward momentum is not strong, and S&P 500 is pretty overbought, so I would wait a month to buy. But that is my style, agressive punters can Buy now, and close the long if market corrects...

 


DAX quarterly chart: Testing historical high...

 The mighty German index tested an historical high, but it closed in March near March low, not very bullish, which makes me doubt that DAX will break up...

The index is overbought, and momentum is waning. And we have a negative divergence in weekly chart. In plain English it means DAX will correct.

The Eurostoxx, and CAC indeces, which I recommended as a cautious BUY, are so boring that I did not feel like attaching a chart: They tried to move up to later close back to Feb level. Still a long though...



Conclusion: Keep Long position in Japan, Buy further on correction, with 30% upside for the next 6 months. 
Keep the longs in Europe, but like the previous update, be ready to exit on correction. 
US is a Buy now for agressive investors, and for the others, wait for a confirmation of current the level.
We are entering into the 1Q earnings release period...I doubt that European companies will surprise positively...
I am still long Japan, Europe
Happy investing!

After a shy bear in 2012, a timid bull in 2013...

BANZAI! Japan bottoming up, Europe aussi, but US at the top & loosing steam, Korea reversing...Commodities are testing resistance & may break up...and 10Y  bonds are starting to fall...
The signals are pretty clear: Buy Japan, Europe...In that order
The technician - that I am - have just diligently listen to the signal and bought, but 2013 is not 2009. 
In Feb 2009, I bought with confidence (when most were panicking)...I was one month too early admittedly, but I eventually doubled faster than I expected...
This time the charts are also clear, but I am not as confident as in 2009 for fundamental reasons...So I will be extra careful to cut my positions if wrong....


Nikkei Quarterly chart

Nikkei has broken up a 4 year range, with momentum that is still upward.
The index is heading in the next 2 quarters towards the top a 10 year downtrend, ie around 14000 ... the next resistance is 17000.

Is Mr Abe going to as strong as Super Mario? 











Eurostoxx 50 monthly chart
 

Last month I highlighted the index was testing a key resistance, well the break is confirmed and momentum is still positive.
Target is  3000 in the next couple of months, then next resistance is around 3300...













S&P500 Quarterly chart

S&P is at the top of a 13 year range, and overbought. As a rule I do not bet on break.
So though momentum is still upward, it is not a buy. I 'd say a sell if you were long as we test the highs...


 













CRB Index monthly

The CRB index (composed of commodities) is trying to break a downtrend with positive momentum

















Conclusion:
Buy Nikkei for 30% upside for the next 6 months, Buy Europe (CAC, or Eurostoxx50) for 15% upside, with more confidence on the Nikkei.
I would not buy US, I think it is to underperform, and if you are long , Sell....

Happy investing!

2012, a shy Bear vs Super Mario - 2013, critical resistance tested

Happy new year!  
We start 2013 with a potential defeat of the Bear by Super Mario. European markets did not touched the target I expected and rebounded straight to a critical level where we are now: we are at the resistance, the last retracement of the March 2011 - Sept 2011 fall. If the current level is maintained we can say that a bottom has been formed and we are heading to March 2011 highs, in the next few months, and 30% upside for the 12-18 months ahead...
For those who look at patterns, a double bottom have been confirmed last month.
In Asia Pacific, including Japan, we are already at the previous high.. 
S&P500 is close to 2007 high, is overbought, and sentiment is at his high...


Eurostoxx 50 Monthly Chart: 

The chart shows a break of the last key resistance, ie the last fibonacci retracement of the 2011 March high to 2011 Sept. Index is overbought. If level is confirmed, it is heading towards 2011 high

VIX index:Lots of complacency...

A record low level of the VIX index, ie an extremely positive sentiment on the S&P500, coupled with the (close to top) level of the S&P is a toppish sign.


Dollar Index monthly: range bound

The dollar index has been in a range and is overbought on one indicator and oversold on another, no strong move is expected

 















 CRB (Commodity) Index monthly

The index has positive momentum, close to overbought and resistance, no strong move expected, the downtrend started in 2011 is still intact, but tested...Likely to stay in a range...
















Conclusion:
US, Asia indeces are close to top and overbought, now we need
to watch the European indices, if their current levels confirmed in the next few weeks, they will lead the rally, and bottom is confirmed.
But even with a Buy signal, I am not as confident buyer as I was in Feb 2009, for fundamental (!!!) reason (Multiples are high, and did some DCF's on some major stocks in Europe and they are more than fair)...
My shorts have been stopped, I am still cash, and have little long in stocks that have been slammed (eg Peugeot...)