The Ultra-Low-Cost Global Investment Portfolio

As Index Fund pioneer Jack Bogle and other professional investors have pointed out for decades and investment research has shown, low costs and fees are paramount in maximizing real investment returns long-term. Why are costs so important, especially for the long-term investor?

Why costs matter in investing

Let’s do a simple comparison of two exemplary investment portfolios to show the impact of costs in the long-term.

Portfolio 1Portfolio 2
Total Value$500K$500K
Total expense ratio1.5% p.a.0.1% p.a.
Annual expense amount:$7,500$500

The portfolios show expenses of $500 vs. $7,500 annually, that’s a whopping $7,000 difference every year. If that does not shock you right away, take that $7,000 over 30 years reinvested at 6% p.a. and you arrive at a difference of more than $550,000, which is the cost-based outperformance of Portfolio 2, assuming equal returns.

You would need exceptional, consistently higher returns in the high-cost investment in order to just offset the cost disadvantage – good luck with that. Research has shown that you simply cannot expect that, so you give away a fortune over a lifetime of investing as your portfolio grows in size! Just one simple investment rule – sticking to a low cost asset allocation – may save you thousands of Dollars per year, which you can invest instead.

How to keep costs low

In a diversified investment portfolio, or in other words, a global asset allocation, keeping costs low can be tricky, as the universe of investable financial instruments expands daily. To make matters worse, if you want to include Real Estate and Commodities in addition to Equities and bonds in your allocation, costs can increase significantly.

However, thanks to the emergence of low-cost Index Funds and ETFs, building an ultra-low-cost global investment portfolio is now more than doable for the average investor.

So let’s check out a few allocations. I will not discuss the weights of the various asset classes and the selected ETFs in detail. For the purpose of this article, we just focus on low costs and diversification among asset classes.

The portfolios below clearly represent a diversified allocation for a long-term, capital-building investors. For retired investors aiming for capital preservation and lower volatility, a lower Equities-weight may be suitable.

1. “The World’s lowest cost portfolio”

This portfolio was published by Matt Hougan on etf.com in 2017. At a total expense ratio of just 0.05% p.a. you are already close to zero costs with this allocation.

Asset ClassWeightFundTickerTER
U.S. Equity40%iShares Core S&P Total
U.S. Market ETF
ITOT0.03%
Developed
Markets Equity
30%SPDR S&P World ex-US ETFGWL0.04%
Emerging
Markets Equity
5%SPDR Portfolio Emerging
Markets ETF
SPEM0.11%
Fixed Income15%Schwab U.S. Aggregate BondSCHZ0.04%
REITs5%Schwab U.S. REIT ETFSCHH0.07%
Commodities5%GraniteShares Bloomberg
Commodity Broad Strategy
No K-1 ETF
COMB0.25%
Combined weighted fee0.05%

Source: etf.com

2. Lower costs by getting paid for ETF holdings

This portfolio builds on the approach shown above and was published in a recent article by Ryan Kirlin on alphaarchitect.com. It includes a US Equities ETF that currently pays you 0.05% p.a. just to hold it. Though this may be temporary only, it also shows where fees could be headed. Why not negative fees in an age of negative interest rates?

Asset ClassWeightFundTickerTER
U.S. Equity40%Salt Low truBeta US
Market Fund
LSLT-0.05%
Developed
Markets Equity
30%SPDR Portfolio Developed
World ex-US ETF
SPDW0.04%
Emerging
Markets Equity
5%SPDR Portfolio Emerging
Markets ETF
SPEM0.11%
Fixed Income15%Vanguard Total Bond
market ETF
BND0.04%
REITs5%Schwab U.S. REIT ETFSCHH0.07%
Commodities5%GraniteShares Bloomberg
Commodity Broad
Strategy No K-1 ETF
COMB0.25%
Combined weighted Fee0.0195%

Source: alphaarchitect.com

This portfolio drives fees even further down – almost close to zero with a weighted fee of 0.0195% p.a.

3. An ultra-low-cost option for Europeans

The low-cost portfolios above are quite US- and US-Dollar-focused in all asset classes. Furthermore, not all of these ETFs may be accessible to retail investors in Europe. Especially in the bonds & REITs-section, a more global approach may be suitable, although it comes with slightly higher costs. The selection below should be tradeable for most European investors through the online broker of their choice:

Asset ClassWeightFundTER
U.S. Equity20%Invesco S&P 500 UCITS ETF USD0.05%
Developed
Markets Equity
20%SPDR MSCI World UCITS ETF USD0.12%
European Equity30%Invesco EURO STOXX 50 ETF EUR0.05%
Emerging
Markets Equity
5%iShares Core MSCI Emerging
Markets IMI UCITS ETF USD
0.18%
Fixed Income15%SPDR Bloomberg Barclays Global
Aggregate Bond EUR Hedged
UCITS ETF
0.10%
REITs5%Think Global Real Estate UCITS
ETF EUR
0.25%
Commodities5%ishares Diversified Commodity
Swap UCITS ETF USD
0.19%
Combined weighted fee0.095%

At a combined total expense ratio of 0.095% this portfolio is considerably more expensive than portfolios 1 and 2 above, but it is still very low-cost and way cheaper than lots of the alternatives out there.

The good thing is, it will probably only get cheaper further down the road, with the zero-cost-ETF-portfolio not too far away anymore. Think of ETFs whatever you want (ETFs Pros & Cons may be a topic for another post), but at least the retail investor has a choice now, e.g. to invest in a globally diversified portfolio at below 0.1% fees p.a. Isn’t that great? – Compare that to the dark ages of the 20th century where as retail investor you may have had to pay up to 2.5% p.a. for your mutual fund selection, which very likely delivered nothing but underperformance for you and excess profits for Wall Street.

Disclaimer: Personal opinion, no investment advice.

Financial Markets Trend Report #11

Global Financial Markets trend analysis – issue 11, October edition. Based on market data from Oct 11-14, 2019. Focusing on monthly and weekly timeframes. Long term buy and sell signals based on plain technical trend analysis. Global stocks, bonds, forex, crypto, commodities. Subjective, for information only, no investment advice.

How it works:

Depending on your investment time horizon, monthly, weekly or daily analysis might be useful. For example, if you focus on medium-term investments from a few months to a year, you might prioritize weekly charts and signals and use the bigger monthly picture for reference or confirmation. Daily charts can add value in timing entries and exits in this case. The technical picture may vary between timeframes and present itself either conflicting or confirming.

definitions:

uptrend = price > 200 day/40 week/10 month moving average. Uptrend stronger, if supported by rising moving averages and RSI.

downtrend = price < 200 day moving average. Downtrend stronger, if moving averages and RSI falling.

Weekly Trend Buy signal = 4 week exponential moving average (EMA 4) crosses 40 week/200 day moving average (SMA 200) from below.

Weekly Trend Sell signal = 4 week exponential moving average (EMA 4) crosses 40 week/200 day moving average (SMA 200) from above.

Monthly Trend Buy Signal: price climbing above 10 month/200 day moving average (SMA 200).

Monthly Trend Sell Signal: price falling below 10 month moving average.

price data: for trend changes as well as buy and sell signals, closing prices are considered (on each timeframe).

Click on charts to enlarge.

I) Global stock markets

US – S&P500 – SPX

S&P 500 long-term view – monthly chart

SPX monthly chart – Oct 11, 2019.

status: uptrend with monthly trend buy signal active since June 2019.
outlook: SPX is contained in an up-channel since mid-2009, which would lead to around 3600 on the upside and approx. 2700 on the downside. The last test occured on the downside in December 2018 at 2450. For now, the bearish divergence of RSI with price is ongoing. Since 2018, every new high in price was accompanied by lower RSI levels, signalling underlying technical weakness.

S&P 500 intermediate-term view – weekly chart

SPX weekly chart – Oct 11, 2019.

status: uptrend with weekly trend buy signal from February 2019 still active.
outlook: price broke the 2019 uptrendline but bounced on the 40 week/200day-moving average with RSI showing continued bearish divergence.

US – Russell 2000 – RUT

Russell 2000 long-term view – monthly chart

Russell 2000 monthly chart – Oct 11, 2019.

status: downtrend with monthly trend sell signal active since August 31, 2019.
outlook: price slightly below its 10 month moving average and close to its uptrendline from 2009, at the lower end of a big upward channel. If it shall remain intact, 1400 should not be broken to the downside. On the upside, 2000 would be a logical target for a new all time high and a test of the upper channel line. From this perspective reward/risk for Longs in RUT seems not too bad.

Russell 2000 intermediate term-view weekly chart

RUT weekly chart – Oct 11, 2019.

status: downtrend with weekly trend sell signal active since Sep 30, 2019.
outlook: 2019 trendline broken to the downside with price trading slightly below its 40 week/200 day moving average. 1600 is to break for Bulls on a weekly close, whereas 1400 seems to be the line in the sand to the downside.

Europe – Eurostoxx50 – ESTX50

Eurostoxx 50 long-term view – monthly chart

Eurostoxx 50 monthly chart – Oct 11, 2019.

status: uptrend with monthly buy signal active since March 2019.
outlook: A monthly close above the 2009 downtrendline would be important for Bulls. The 10 month moving average has been valid support in recent months.

Eurostoxx 50 intermediate term view – weekly chart

Eurostoxx 50 weekly chart - October 14, 2019.
Eurostoxx 50 weekly chart – October 14, 2019.

status: uptrend with weekly buy signal from March 11, 2019 still active.

Germany – DAX

DAX long-term view – monthly chart

DAX monthly chart – Oct 11, 2019.

status: uptrend with monthly trend buy signal active since April 2019.
outlook: 10 month moving average acting as support with price trying to break above the 2017/2018 downtrendline. DAX has broken its multi-year uptrend from 2009 in October 2018 – a retest of this important trendline from below would more or less coincide with a retest of the All-time-highs around 13500.

DAX intermediate term view – weekly chart

DAX weekly chart – Oct 11, 2019.

status: uptrend with weekly trend buy signal from April 1, 2019 still active.
outlook: RSI lagging behind price for a smal divergence, no breakout above the downtrendline yet. 11700-11900 is a strong support zone which should hold for the bullish case to remain valid.

Emerging Markets – EEM

EEM long-term view – monthly chart

EEM monthly chart – Oct 11, 2019.

status: downtrend with monthly trend sell signal active since August 2019.
status: market trying to stay above its long-term downtrend-line (part of a massive ascending triangle that formed since 2008), right below the 200 day moving average. Holding the uptrend-line in RSI may be key to realize a lasting breakout. The 35-36 area is crucial on the downside (2009 uptrendline).

EEM intermediate term view – weekly chart

EEM weekly chart – Oct 11, 2019.

status: downtrend with weekly trend sell signal active since Aug 5, 2019.
outlook: price is right at resistance below the 40 week average. A break above 43 would be very bullish. If we reverse to the downside, 35-36 would be a logical initial target area for a retest of the long-term uptrendline from 2009 (see monthly chart above).

II) Bonds

Long-term 20+ years US treasury bonds – TLT

TLT monthly chart

TLT monthly chart – Oct 11, 2019.

status: strong uptrend with monthly trend buy signal from December 2018 still active.
outlook: RSI in overbought zone increasing the likelyhood for a deeper correction of more than 15% like in 2009 and 2015, which may already be on the way. The upper trendline from 2009 indicates a little more upside into 150-160 though.

TLT weekly chart

TLT weekly chart – Oct 11, 2019.

status: uptrend with weekly buy signal active since December 24, 2018.
outlook: RSI broke its uptrendline from 2018, so a retest of the 130-135 area, where 40 week moving average and 2018 uptrendline meet, seems likely.

US intermediate term bonds 7-10yr IEF

IEF monthly chart

IEF monthly chart – Oct 11, 2019.

status: uptrend with monthly trend buy signal active since December 2018.

IEF weekly chart

IEF weekly chart – Oct 11, 2019.

status: strong uptrend with weekly trend buy signal active since December 3, 2018.
outlook: RSI already came down from overbought zone significantly with price holding its steep uptrendline so far.

Eurozone Bonds – VETY EUR GOV ETF

VETY weekly chart

VETY Eurozone Government Bonds weekly chart – Oct 11, 2019.

status: uptrend with active trend buy signal since week of December 17, 2018.
outlook: RSI in correction mode leading price towards a retest of the 2018 uptrendline and potentially its 40 week moving average.

Emerging Markets Bonds – VDET ETF

VDET weekly chart

VDET weekly chart – Oct 11, 2019.

status: uptrend with trend buy signal active since week of Jan 14, 2019.
status: price has broken its steep 2018/2019 uptrendline (dotted now) along with RSI. A retest of the 40 week moving average could be next.

III) Metals & Commodities

Gold

Gold monthly chart

Gold monthly chart – Oct 11, 2019.

status: uptrend with monthly trend buy signal active since end of December 2018.
outlook: Gold broke out of its multi-year downtrend at the end of 2017 and has been rising since mid 2018. Slightly overbought right now but not overextended. The 10 month moving average currently at 1382 should hold for a continued rise.

Gold weekly chart

Gold weekly chart – Oct 11, 2019.

status: strong uptrend with weekly trend buy signal active since week of December 24, 2019.
outlook: RSI heading down from overbought levels.

Copper

Copper long-term view – monthly chart

Copper monthly chart – Oct 11, 2019.

status: downtrend with monthly trend sell signal active since May 2019.
outlook: Copper is below the 10 month moving average, nearing its long-term uptrend-line from 2009. A break of the trendline at 2.40-2.45 would be very bearish. For Bulls to gain control, a breakout of the giant triangle and above 3.10 would be needed. The copper price (“Doctor Copper“) still seems to be a key indicator for Equities, so interesting to watch how it reacts in this decision zone.

Copper intermediate-term view – weekly chart

Copper weekly chart – Oct 11, 2019.

status: downtrend with weekly trend sell signal active since May 24, 2019.
outlook: As seen on the monthly chart, Copper tries to bounce from its long-term uptrend-line. On the other hand, we are clearly in a downtrend since mid-2018 and price has broken the 2016 uptrend-line, which is very significant due to multiple successful tests in the last three years. The short-term bullishness could be seen as a retest of this trendline from below. It coincides with the 200 day/40 week-moving average above, so there is quite some resistance for the Bulls to overcome.

Crude Oil – WTI

Crude Oil monthly chart

Crude Oil monthly chart – Oct 14, 2019.

status: downtrend with monthly sell signal active since August 31, 2019.
outlook: Crude Oil hit a low in early 2016, rising from 25 USD to over 70 USD. However, we are seeing lower highs since the peak in 2008. Price is now approaching an uptrendline from 2016 – $50-51 should hold if Bulls want to get in control again and aim for another full retest of the upper channel line at around $80. Below $42-43 the low $20s might be open for a test of the lower boundary.

Crude Oil weekly chart

Crude Oil weekly chart – Oct 14, 2019.

status: downtrend with weekly trend sell signal active since Aug 2, 2019.
outlook: RSI broke its uptrend slightly and price below 40 week moving average. $50-51 area should hold for a bullish scenario to play out in the coming weeks.

IV) FX Markets

Euro/US-Dollar – EURUSD

EURUSD monthly chart

EURUSD monthly chart – Oct 14, 2019.

status: downtrend with monthly trend sell signal active since July 2019.
outlook: Multi-year downtrend with lower highs and lower lows marked by a big downtrend-channel. Currently around 1.20 and 1.00 are logical targets up and down, with the latter being more likely as long as price stays below its 10 month moving average.

EURUSD weekly chart

EURUSD weekly chart – Oct 14, 2019.

status: downtrend with weekly trend sell signal active since May 18, 2018.
outlook: lower trendline of the 2018 falling wedge tested and bounce. A break above the 40 week average would come along with a bullish breakout of the wedge.

British Pound/US-Dollar – GBPUSD

GBPUSD monthly chart

GBPUSD monthly chart – Oct 14, 2019.

status: downtrend with monthly trend sell signal active since May 2019.
outlook: The big falling wedge since 2008 marks the upper and lower boundaries in the big picture. Below its 10 month moving average, GBPUSD could be headed for 1.14 and below. However, the downtrendline from 2014 has been broken to the upside and still acts as support in the 1.19-1.20 area. If it holds and Bulls can recapture the 10 month average currently around 1.27 and falling, 1.40-1.45 is the bigger target on the upside.

GBPUSD weekly chart

GBPUSD weekly chart – Oct 14, 2019.

status: downtrend with weekly trend sell signal active since May 17, 2019.
outlook: Bulls are close to catching the 200 day moving average and break out above the 2018 downtrendline. On the downside, 1.19-1.20 is the line in the sand and upon a break 1.14 and lower is open.

V) Crypto Markets

Bitcoin/US-Dollar – BTCUSD (Bitstamp)

BTCUSD weekly chart

BTCUSD weekly chart – Oct 14, 2019.

status: uptrend with weekly buy signal active since May 3, 2019.
outlook: Price is very close to the 40 week moving average (currently around 7400 and rising), which should for the bullish case to remain valid.

Ethereum/US-Dollar – ETHUSD (Bitfinex)

ETHUSD weekly chart

ETHUSD weekly chart – Oct 14, 2019.

status: downtrend with weekly sell signal active since September 23, 2019.
outlook: price has dropped below the 40 week moving average end of September but is still sticking around. Bulls would need to recapture 200 and ultimately overcome the downtrendline around 240-250 in order to start another big run to the upside.

Ripple/US-Dollar – XRPUSD (Bitstamp)

XRPUSD weekly chart

XRPUSD weekly chart – Oct 14, 2019.

status: downtrend with weekly sell signal active since Jul 19, 2019.
outlook: The important 0.22-0.23 level held so far, with the 40 week average currently at 0.32 representing the next upside target. A new uptrend with price trading above the 40 week average together with overcoming the 2018 downtrendline around 0.40-0.45 would be very bullish long-term.

XRPBTC weekly chart

XRPBTC weekly chart – Oct 14, 2019.

status: downtrend with weekly sell signal active since April 5, 2019.
outlook: Very interesting chart as XRPBTC tested its long-term uptrendline recently and started to advance again, breaking the 2019 downtrendline but still well below its 40 week average. If you are bullish on XRP long-term, this is a logical buy spot, as long trades have a great reward/risk-ratio here, provided the upper channel-line is the long-term target.

Bitcoin price – make or break?

Time for a Bitcoin price analysis, as BTCUSD is testing its 200 day moving average right now for the first time since the break above it in early April 2019, hitting a support zone:

  • 200 day moving average
  • 2019 uptrendline
  • An uptrendline from 2015 which has already been broken and recaptured, now acting as support – please see weekly chart below. It is an interesting long-term trendline to keep in mind.
Bitcoin price analysis – BTCUSD daily chart – Sep 25, 2019.
BTCUSD weekly chart – Sep 25, 2019.

It is the first test of the 200 day moving average from above since March 2018, when BTCUSD broke down below the 200 day MA and stayed there for about a year.

Obviously, it is bearish that Bitcoin broke down from the major triangle it formed since June on the daily chart – but if you are bullish in the long-term, this is also a logical spot to buy. On this note, RSI hit the oversold zone on the daily chart for the first time since November 2018. Over the course of the last couple of years, basically every oversold RSI reading was followed by a significant low and a rally shortly after.

Scenarios from here?

Bullish: if we bounce from the support zone , 9600-10000 is a natural resistance zone (the triangle BTC broke down from), a break above would be very bullish and would target the latest highs around 13500 to 14000.

Bearish: the potential target according to the triangle breakdown would be around 5000.

Global Trend Report #10

Market trend analysis – issue 10, September edition – a bit later in the month than usual, due to vacation time and some changes in the methodology. I will now include longer-term trendlines on some charts as they seem to add value to the big picture and help to determine “decision zones”. Also MACD-settings have been adjusted at certain instruments to smooth out some noise. As I stated in the intro to Market Trend Reports, I am not dogmatic about methods and details like indicator settings. Based on market data from Sep 6-10, 2019. Early month analysis focusing on monthly and weekly timeframes. Global stocks, bonds, forex, crypto, commodities. Subjective, for information only, no investment advice.

How it works:

Depending on your investment time horizon, monthly, weekly or daily analysis might be useful. For example, if you focus on medium-term investments from a few months to a year, you might prioritize weekly charts and MACD signals and use the bigger monthly picture for reference or confirmation. The daily charts and MACD signals can add value in timing entries and exits in this case. The technical picture may vary between timeframes and present itself either conflicting or confirming.

definitions:

uptrend = price > 200 day/40 week/10 month moving average. Uptrend stronger, if supported by rising MACD and RSI indicators.

downtrend = price < 200 day moving average. Downtrend stronger, if MACD and RSI falling.

MACD buy signal = MACD line (blue) crosses signal line (orange) from below.

MACD sell signal = MACD crosses signal line from above.

price data: for trend changes as well as buy and sell signals, closing prices are considered (on each timeframe).

Note: MACD and RSI with individual settings. Different settings may lead to different signals.

Click on charts to enlarge.

I) Global stock markets

US – S&P500 – SPX

S&P 500 long-term view – monthly chart

SPX monthly chart – Sep 6, 2019.

status: uptrend with monthly MACD buy signal active since June 2019.
outlook: bearish divergence of MACD and RSI with price continues. Since 2018, every new high in price was accompanied by lower MACD and RSI levels, signalling underlying technical weakness.

S&P 500 intermediate-term view – weekly chart

SPX weekly chart – Sep 6, 2019.

status: uptrend with MACD sell signal active since week of Aug 5, 2019.
outlook: price dropped below the 2019 trendline and is testing it from below right now. Also RSI is showing a clear bearish divergence on every new high in price. This week may be crucial to see whether price can re-capture the 2019 trendline and break out to new highs, or if we see at least another test of the 200 day moving average around the 2800-2825 area.

US – Russell 2000 – RUT

Russell 2000 long-term view – monthly chart

Russel 2000 long-term view – Sep 6, 2019.

status: downtrend with MACD sell signal from Oct 2018 still active.
outlook: Technically, RUT is in a bear market since September 2018 with price around 15% off its highs and below its 200 day moving average. You could see the rallye in 2019 as bear market rallye. Crucial for the bulls to hold the long-term trendline from 2009 around 1400-1425.

Russell 2000 intermediate term-view weekly chart

RUT weekly chart – Sep 6, 2019.

status: downtrend with weekly MACD sell signal active since week of Aug 5.
outlook: 2019 trendline broken to the downside along with MACD sell signal in August. Bulls would need to re-capture the 200 day MA and break above 1600 on a weekly close to invalidate the bear market thesis and open up a window to new highs.

Europe – Eurostoxx50 – ESTX50

Eurostoxx 50 long-term view – monthly chart

Eurostoxx50 monthly chart – Sep 6, 2019.

status: uptrend with MACD buy signal active since April 2019.
outlook: market on the brink of breaking out above the 2009 downtrend-line on the third attempt since 2015 at lower highs. Confirmation of a potential breakout in RSI will be important.

Eurostoxx 50 intermediate term view – weekly chart

Eurostoxx50 weekly chart – Sep 6, 2019.

status: uptrend with MACD sell signal active since week of Aug 29, 2019.

Germany – DAX

DAX long-term view – monthly chart

DAX monthly chart – Sep 6, 2019.

status: uptrend with MACD buy signal active since May 2019.
outlook: 10 month moving average holding for now with price trying to push for new highs. Please note DAX has clearly broken its multi-year uptrend from 2009.

DAX intermediate term view – weekly chart

status: uptrend with MACD sell signal active since week of July 15, 2019. MACD close to new weekly buy signal.
outlook: price has broken out above the 2018 downtrend-line, RSI hasn’t confirmed yet. Bulls need to hold 200 day MA and 2019 uptrend-line around 11700-11800 area.

Emerging Markets – EEM

EEM long-term view – monthly chart

EEM monthly chart – Sep 6, 2019.

status: downtrend with monthly MACD sell signal from May 2018 still active.
status: market trying to stay above its long-term downtrend-line (part of a massive ascending triangle that formed since 2008), right below the 200 day moving average. Holding the dotted uptrend-line in RSI may be key for bulls to realize a lasting breakout. On the downside watch out for the 35-36 area (lower trendline).

EEM intermediate term view – weekly chart

EEM weekly chart – Sep 6, 2019

status: downtrend with weak MACD sell signal active since weak of July 29, 2019.
outlook: a break above 43.50 would open up a new high-window but for now bears are still in control.

II) Bonds

Long-term 20+ years US treasury bonds – TLT

TLT monthly chart

TLT monthly chart – Sep 9, 2019.

status: strong uptrend with MACD buy signal active since November 2018.
outlook: RSI in overbought zone for the third time in 10 years. In 2009 and 2015 there was a deeper correction of more than 15% at these RSI levels. The upper trendline from 2009 suggests a little more upside into 150-160 though.

TLT weekly chart

TLT weekly chart – Sep 9, 2019.

status: strong uptrend with MACD buy signal active since last week of November 2018.
outlook: RSI quite overextended and with price this far from its 200 day MA a correction would not be a surprise and also not violate the underlying bullishness of the market.

US intermediate term bonds 7-10yr IEF

IEF monthly chart

IEF monthly chart – Sep 9, 2019.

IEF weekly chart

IEF weekly chart – Sep 9, 2019.

status: strong uptrend with MACD buy signal active since week of November 17, 2018.
outlook: RSI in overbought area for the first time since 2016, a correction is overdue.

Eurozone Bonds – VETY EUR GOV ETF

VETY weekly chart

VETY weekly chart – Sep 9, 2019.

status: uptrend with active MACD buy signal since end of November, 2018. outlook: RSI overbought and price far above 40 week/200 day moving average. Very strong trend in 2019 with first signs of exhaustion – MACD and RSI turning down from very high levels.

Emerging Markets Bonds – VDET ETF

VDET weekly chart

VDET weekly chart – Sep 9, 2019.

status: strong uptrend with MACD sell signal active since week of Aug 19, 2019.
status: RSI already came down from overbought levels. Make or break zone, price will soon either break 2018-2019 uptrend-line heading for 200 day moving average as first downside target or breakout to the upside for new highs.

III) Metals & Commodities

Gold

Gold monthly chart

Gold monthly chart – Sep 9, 2019.

status: strong uptrend with monthly MACD buy signal active since January 2019. RSI in overbought zone for the first time since August 2011.
outlook: Gold broke out of its multi-year downtrend at the end of 2017 and has been rising since mid 2018. Slightly overbought right now but not overextended. The 10 month moving average currently at 1364 should hold for a continued rise.

Gold weekly chart

Gold weekly chart – Sep 9, 2019.

status: uptrend with MACD buy signal active since June 03, 2019.
outlook: RSI overbought with some signs of exhaustion, heading down. The short-term uptrend is very steep and a correction or sideways movement might be healthy for the longer-term uptrend.

Copper

Copper monthly chart

Copper monthly chart – Sep 10, 2019.

status: downtrend with MACD sell signal active since May 1, 2019.
outlook: Copper is interesting. It’s below the 10 month moving average and bounced a bit up, very close to its long-term uptrend-line from 2009. For Bulls to gain control, a breakout of the giant triangle and above 3.10 would be needed. A break of the huge trendline at 2.40-2.45 to the downside would be very bearish. Watch RSI and MACD for divergences. Copper price (“Doctor Copper“) still seems to be a key precursory indicator for Equities, like mentioned in the last report.

Copper weekly chart

Copper weekly chart – Sep 10, 2019.

status: downtrend with MACD sell signal still active.
outlook: There is some bullishness in the short-term, as MACD tries to pull-off a new buy signal this week. Keep the monthly chart in mind, as Copper tries to bounce from its long-term uptrend-line. On the other hand, we are clearly in a downtrend since mid-2018 and price has broken the 2016 uptrend-line, which is very significant due to multiple successful tests in the last three years. The short-term bullishness could be seen as a retest of this trendline from below. It coincides with the 200 day/40 week-moving average above, so there is quite some resistance for the Bulls to overcome.

Crude Oil – WTI

Crude Oil monthly chart

Crude Oil monthly chart – Sep 10, 2019.

status: uptrend by a small margin with weakening long-term MACD sell signal from Oct 1, 2018 still active.
outlook: In the big picture, Oil broke its long-term uptrend-line from 1998 finally in 2012, hitting a low in early 2016. Though there was a huge bounce from around $25 into the $70s, we are still registering lower highs since the peak in 2008. Now it is interesting to watch whether Oil can hold the 10 month moving average and break out above its 2018 downtrend-line. This would open up a test of the upper boundary of the giant range Oil is trading in since 2009, in the $75-80 area. RSI would have to play along, currently also exactly at the 2018 downtrend-line. On the downside, $50-51 should hold, below $42-43 the low $20s might be open for a test of the lower boundary.

Crude Oil weekly chart

Crude Oil weekly chart – Sep 10, 2019.

status: new uptrend with weekly MACD buy signal active since week of Sep 9, 2019.
outlook: Price heading for a test of the 2018 downtrend-line, 40 week moving average should hold if Bulls want to get in control. RSI as broken out of the 2018 downtrend-line, which has failed twice this year already.

IV) FX Markets

Euro/US-Dollar – EURUSD

EURUSD monthly chart

EURUSD monthly chart – Sep 10, 2019.

status: downtrend with MACD sell signal active since June 2018.
outlook: Multi-year downtrend with lower highs and lower lows marked by a big downtrend-channel. As long as Bulls cannot recapture the 10 month moving average and go for the upper boundary of the channel again, parity and lower (0.90-0.95 depending on the time horizon) is open.

EURUSD weekly chart

status: downtrend with MACD sell signal active since July 22, 2019.
outlook: lower trendline of the 2018 falling wedge tested and bounce. A break above the 40 week average would come along with a bullish breakout of the wedge.

British Pound/US-Dollar – GBPUSD

GBPUSD monthly chart

GBPUSD monthly chart – Sep 10, 2019.

status: downtrend with MACD sell signal active since May 1, 2019.
outlook: GBP lost more than 40% of its value against the US-Dollar over the last decade. The big falling wedge since 2008 marks the upper and lower boundaries in the big picture. Below its 10 month moving average, GBPUSD could be headed for 1.14 and below. However, the downtrendline from 2014 has been broken to the upside and still acts as support in the 1.19-1.20 area. If it holds and Bulls can recapture the 10 month average currently around 1.27 and falling, 1.40 is the bigger target on the upside.

GBPUSD weekly chart

GBPUSD weekly chart – Sep 10, 2019.

status: downtrend with new MACD buy signal active since Sep 9, 2019.
oulook: Referring to the monthly picture, Bulls want to catch the 200 day moving average and break out above the 2018 downtrendline and break above the 1.27-1.28 area. On the downside, 1.19-1.20 is the line in the sand and upon a break 1.14 and lower is open.

V) Crypto Markets

Bitcoin/US-Dollar – BTCUSD (Bitstamp)

BTCUSD weekly chart

BTCUSD weekly chart – Sep 10, 2019.

status: uptrend with MACD sell signal active since Aug 12, 2019.
outlook: RSI came down from overbought levels along with price. Bull should hold 9300-9500 level and break out above 11000 in order to stay in control. Upon a breakdown from the small “summer triangle” below 9300 a retest of the 200 day moving average should be open, currently around 6800 and rising.

Ethereum/US-Dollar – ETHUSD (Bitfinex)

ETHUSD weekly chart

ETHUSD weekly chart – Sep 10, 2019.

status: no clear trend with MACD sell signal active since July 15, 2019.
outlook: 40 week moving average retest in progress with 2019 uptrendline broken. Bulls want to bounce from here in order to avoid potential downside window below $100 again.

Ripple/US-Dollar – XRPUSD (Bitstamp)

XRPUSD weekly chart

XRPUSD weekly chart – Sep 10, 2019.

status: downtrend with weak MACD sell signal active since Jul 8, 2019.
outlook: 0.22-0.23 seems to be the line in the sand to the downside, the level were XRPs big advance started from in 2017. In order for Bulls to gain control again, the 200 day moving average around 0.33 is the first target with a break of 0.45-0.50 needed for overcoming the 2018 downtrendline, which has been major resistance over the course of the last 18 months.

Global Trend Report #9

Market trend analysis – issue 9, summer edition. Based on market data from Aug 2-Aug 4, 2019. Early month analysis focusing on weekly and monthly timeframes. Global stocks, bonds, forex, crypto, commodities. Subjective, for information only, no investment advice.

How it works:

Depending on your investment time horizon, monthly, weekly or daily analysis might be useful. For example, if you focus on medium-term investments from a few months to a year, you might prioritize weekly charts and MACD signals and use the bigger monthly picture for reference or confirmation. The daily charts and MACD signals can add value in timing entries and exits in this case. The technical picture may vary between timeframes and present itself either conflicting or confirming.

definitions:

uptrend = price > 200 day/40 week/10 month moving average. Uptrend stronger, if supported by rising MACD and RSI indicators.

downtrend = price < 200 day moving average. Downtrend stronger, if MACD and RSI falling.

MACD buy signal = MACD line (blue) crosses signal line (orange) from below.

MACD sell signal = MACD crosses signal line from above.

price data: for trend changes as well as buy and sell signals, closing prices are considered (on each timeframe).

Note: MACD and RSI with individual settings. Different settings may lead to different signals.

Click on charts to enlarge.

I) Global stock markets

US – S&P500 – SPX

S&P 500 monthly chart

SPX monthly chart – Aug 2, 2019.

status: uptrend with MACD buy signal active since June 2019.
outlook: bearish divergence of MACD and RSI with price continues, favoring either a downturn or more range-bound price action.

S&P 500 weekly chart

SPX weekly chart – Aug 2, 2019.

status: uptrend with MACD buy signal active since week of June 24, 2019.
outlook: MACD close to weekly sell signal with RSI turning down confirming somewhat toppy price action in the monthly chart.

US – Russell 2000 – RUT

Russell 2000 monthly chart

RUT monthly chart – Aug 2, 2019.

status: price close to 10 month average, still on uptrend – with MACD sell signal from Oct 2018 still active.

Russell 2000 weekly chart

RUT weekly chart – Aug 2, 2019.

status: new weekly MACD sell signal by a tiny margin active since Aug 2. Potential new downtrend could be effected soon with price close to 40 week average.

Europe – Eurostoxx50 – ESTX50

Eurostoxx 50 monthly chart

Eurostoxx 50 monthly chart – Aug 2, 2019.

status: uptrend with MACD buy signal active since April 2019.

Eurostoxx 50 weekly chart

Eurostoxx 50 weekly chart – Aug 2, 2019.

status: uptrend with new MACD sell signal active since Aug 2, 2019.
outlook: retest of 40 week moving average likely next.

Germany – DAX

DAX monthly chart

DAX monthly chart – Aug 2, 2019.

status: uptrend with weak weekly MACD buy signal active since May 2019. Outlook: price reverting back to 10 month moving average for a retest of the existing uptrend.

DAX weekly chart

DAX weekly chart – Aug 2, 2019.

status: uptrend with MACD sell signal active since week of July 15, 2019.

Emerging Markets – EEM

EEM monthly chart

EEM monthly chart – Aug 2, 2019.

status: downtrend with monthly MACD sell signal from May 2018 still active.

EEM weekly chart

EEM weekly chart – Aug 2, 2019.

status: downtrend with new MACD sell signal active since Aug 2, 2019.

II) Bonds

US 30 year bonds (US30)

weekly chart

US 30 year bonds weekly chart – Aug 2, 2019.

status: healthy uptrend with MACD buy signal active since May 28, 2019.
outlook: RSI still strong and rising with price well above 200 day moving average.

US 10 year bonds (US10)

weekly chart

US 10 year bonds – Aug 2, 2019.

status: strong uptrend with MACD buy signal active since May 28, 2019.

Eurozone Bonds – VETY EUR GOV ETF

VETY weekly chart

VETY Eurozone Govt bonds – Aug 2, 2019.

status: uptrend with active MACD buy signal since May 20, 2019. RSI overbought and price far above 40 week moving average. Very strong trend in 2019 with no signs of exhaustion yet.

Emerging Markets Bonds – VDET ETF

VDET weekly chart

VDET weekly chart – Aug 2, 2019.

status: strong uptrend with MACD buy signal active since week of June 3, 2019. RSI on overbought levels for the first time since June 2017. No signs of weakness yet.

III) Metals & Commodities

Gold

Gold monthly chart

Gold monthly chart – Aug 2, 2019.

status: strong uptrend with monthly MACD buy signal active since January 2019. RSI rising and very close to overbought levels for the first time since August 2011.

Gold weekly chart

Gold weekly chart – Aug 2, 2019.

status: uptrend with MACD buy signal active since June 03, 2019. RSI holding up in overbought territory so far. No signs of exhaustion yet.

Copper

Copper monthly chart

Copper monthly chart – Aug 2, 2019.

status: downtrend with MACD sell signal active since May 1, 2019. RSI still weak. Price is back at 2015 levels. Mid 2018, when copper started a half-year downtrend, Equities followed with a weak last quarter in 2018.

Copper weekly chart

Copper weekly chart – Aug 2, 2019.

status: downtrend with weekly MACD sell signal active since week of July 29, 2019.

Crude Oil – WTI

Crude Oil monthly chart

Crude Oil monthly chart – Aug 2, 2019.

status: downtrend by a small margin with weakening long-term MACD sell signal from Oct 1, 2018 still active. Price trying to conquer 10 month / 200 day moving average for a potential new uptrend. Ongoing fight of bulls and bears without a clear indication of outcome right now.

Crude Oil weekly chart

Crude Oil weekly chart – Aug 2, 2019.

status: downtrend with weekly MACD sell signal active since Jul 15, 2019. Price failed multiple times above 40 week moving average since April, bears still in control for now.

Wheat

Wheat monthly chart

Wheat monthly chart – Aug 2, 2019.

status: weak uptrend with no clear MACD signal. Last clear monthly signal was a sell in February 2019.

Wheat weekly chart

Wheat weekly chart – Aug 2, 2019.

status: weak uptrend with new weekly MACD sell signal active since week of Jul 29, 2019. Make or break area right at 40 week / 200 day moving average. Price should bounce from here if uptrend is still valid.

IV) FX Markets

Euro/US-Dollar – EURUSD

EURUSD monthly chart

EURUSD monthly chart – Aug 2, 2019.

status: long-term downtrend and MACD sell signal active since May 2018. RSI flattening out a bit on low levels with no signs of a bottom yet.

EURUSD weekly chart

EURUSD weekly chart – Aug 2, 2019.

status: downtrend with MACD sell signal active since July 22, 2019. Price well below 40 week / 200 day moving average. RSI showing tiny (bullish) divergence (April vs. July lows) without any upside indication yet.

British Pound/US-Dollar – GBPUSD

GBPUSD monthly chart

GBPUSD monthly chart – Aug 2, 2019.

status: monthly downtrend with MACD sell signal active since May 1, 2019. Sterling close to a retest of 2016/2017 lows around 1.19-1.20.

GBPUSD weekly chart

GBPUSD monthly chart – Aug 2, 2019.

status: downtrend with MACD sell signal active since April 15, 2019.

V) Crypto Markets

Bitcoin/US-Dollar – BTCUSD (Bitstamp)

BTCUSD weekly chart

BTCUSD weekly chart – Aug 4, 2019.

status: strong uptrend with very weak MACD sell signal active since Jul 22, 2019. First weekly MACD sell signal since November 2018 with RSI heading down from overbought levels. Strong rebound in price in the last week of July though. Price is still far above 200 day moving average, which would be a logical target on any deeper down move. On the upside there is really not a lot between 14K and the all-time-highs around 20K.

Ethereum/US-Dollar – ETHUSD (Bitfinex)

ETHUSD weekly chart

ETHUSD weekly chart – Aug 4, 2019.

status: uptrend with MACD sell signal active since July 15, 2019. Price has been quite close to 40 week moving average recently; full retest and bounce seems likely move from here.

Ripple/US-Dollar – XRPUSD (Bitstamp)

XRPUSD weekly chart

XRPUSD weekly chart – Aug 4, 2019.

status: dowmtrend with weak MACD sell signal active since Jul 8, 2019. Price sticking around close to 40 week moving average, trending nowhere for around a year already. Similar price action to May 2017-Dec 2017. Seems ripe for a substantial breakout either way.