Global Trend Report 01/2020

New month, new year, new decade. In this short, technical trend analysis, we take a look at various asset classes and their trends at the beginning of 2020. The trend assessment below is based on a simple, binary metric:

up trend = price > 40 week average (SMA 40)
down trend = price < SMA 40

In a trend following strategy – which might be useful for achieving buy and hold-like returns with lower volatility – you would want to buy, sell or sell short upon trend changes. Also, trend changes can be used for re-balancing existing investment portfolios in order to maximize risk-adjusted returns. The market timing status below is characterized by another simple metric:

buy = recent 4-week-Exponential Moving Average (EMA 4) cross above SMA 40 (within the last 2 weeks)
sell = recent EMA 4 cross below SMA 40 (within the last 2 weeks)
hold = wait for next buy or sell signal

Global stock markets

Basically all major stock markets are in long-term uptrends. Developed markets like the US and Europe are far above their 40 week/200 day moving averages. Recent trend buy signals according to the definition above were generated on the Shanghai Composite and Hong Kong indexes.

markettrendtiming
S&P 500 – SPXuphold
Nasdaq100 – NDXuphold
Russell 2000 – RUTuphold
Germany – DAXuphold
UK – FTSE100uphold
Europe – Eurostoxx50 – ESTX50uphold
Japan – Nikkeiuphold
China – Shanghai Compositeupbuy
HK – Hang Sengupbuy

Stock market to watch: Hong Kong

The Hang Seng Index started a new uptrend in December with a new buy signal generated on Dec 23, 2019 (EMA 4 > SMA 200). The trend signals in 2019 were not sustainable, let’s see if 2020 allows for a new longer-term uptrend.

Hang Seng Index - January 7, 2020. A trend buy signal was generated on Dec 23, 2019.
Hang Seng Index – January 7, 2020

For a recent fundamental analysis on Global stock markets and their valuations, please check out the Global Value Portfolio for 2020.

Global bond markets

Global fixed income markets are mostly in existing uptrends as well but there are some markets which are quite close to their 40 week moving averages, so there could be some sell signals not too far ahead.

markettrend timing
US 10 year GOVT bonds (IEF)uphold
Vanguard Eurozone ETF (VETY)uphold
US Treasury bonds ETF (VUTY)uphold
BIV Vanguard Intermediate Term bonds ETF (BIV)uphold
Vanguard Emerging Markets bonds ETF (VDET)uphold
Vanguard Extended Duration bonds ETF (EDV)uphold
Vanguard Euro Corporate bonds (VECP)uphold
ishares Inflation Link Govt Bond (IBC1)uphold

Bond ETF to watch: EDV

EDV tracks and holds long-term US government bonds with a duration from 20 to 30 years. The 40 week uptrend was tested recently for the first time since February 2019 – so far the uptrend remains intact.

EDV Vanguard World Fund Extended Duration ETF - January 7, 2020. Price touched its 40 week average recently.
EDV weekly chart – January 7, 2020.

Commodities & Metals

market trend timing
Invesco DB Commodities Index (DBC)uphold
Crude OILuphold
GOLDuphold
SILVERuphold
COPPERuphold

Metal to watch: Copper

Copper initiated a new uptrend in December 2019 accompanied by a trend buy signal. Price also broke above its downtrendline from 2018 which should act as first line of support, the 40 week moving average is the second defense right below.

Copper weekly chart - January 7, 2020. New uptrend in Copper started in December 2019.
Copper weekly chart – January 7, 2020.

Forex & Crypto Markets

The US-Dollar (USD) showed remarkable relative strength throughout 2019. At least in the short term there is some weakness in USD heading into 2020 as major currencies like the British Pound, the Canadian and the Australian Dollar and the Euro, are all on new or recent uptrends against the Dollar.

market trend timing
EURUSDuphold
GBPUSDuphold
USDCADdownhold
AUDUSDuphold
BTCUSDdownhold
ETHUSDdownhold
XRPUSDdownhold

Currency pairs to watch: EURUSD and AUDUSD

EURUSD is on the verge of breaking its longer-term downtrend, which has been active since April 2018. A weekly close above 1.1150 on January 10 would very likely generate a new trend buy signal (EMA 4 > SMA 40).

EURUSD weekly chart with potential buy signal - January 7, 2020
EURUSD weekly chart – Jan 7, 2020.

The Australian Dollar broke above its 40 week average at the end of December 2019 with price heading back down again. EMA 4 and SMA 40 are basically at the same level. Price would have to close above 0.69 this week for a confirmed buy signal.

Australian Dollar/US-Dollar weekly chart - January 7, 2020.
AUDUSD weekly chart – January 7, 2020.

Real Estate (REITs)

European REITs are in a very strong uptrend with price far above the 40 week moving average. Some reversion to the mean could be expected from this level.

market trend action
US – VNQuphold
Europe – XDERuphold

REIT to watch: VNQ

VNQ has been in a strong uptrend for about a year and has recently tested the 40 week moving average for the first time. A new downtrend and a potential trend sell signal are not far away and could be triggered upon a weekly close below 90.

VNQ Vanguard Index Funds Real Estate - weekly chart, January 7, 2020.
VNQ weekly chart – January 7, 2020.

The Global value portfolio 2020

As the stock markets seem to be set for ending the decade at or near All-Time-highs, let’s see where we can find the greatest value going into the next decade. Therefore we look at the CAPE ratio (basically a P/E ratio, smoothed out over a 10 year period) of global stock markets and aim to construct a simple value portfolio covering the cheapest stock markets with ETFs.

Comparing Global CAPE ratios

The CAPE ratio is commonly used for comparing the valuation of international stock markets and therefore we will use it in this short analysis. We want to set up a global portfolio investing in the cheapest stock markets worldwide. These markets are not all depressed, but valuations are considerably lower than in the US, where the CAPE ratio is currently around 30, which is very high historically. Meb Faber has a great podcast on using the CAPE ratio as a timing system, including great resources for Global Stock Valuations.

By investing in cheaper countries around the world, we may be able to reduce the downside risk of our investments considerably. Furthermore, the concept of mean reversion would also favor such a strategy, as valuations can be expected to converge somewhat over time.

So here are the cheapest stock markets around the world and their CAPE-ratios:

CountryCAPE Oct 2019% of World Market Caprel. share of Market Cap in %
Oman7.40,025%0,1%
Turkey7.60,197%0,79%
Russia7.70,761%3,04%
Czech Republic9.80,05%**0,2%
Poland11.20,212%0,85%
Jordan11.70,03%0,12%
South Korea12.11,867%7,46%
Qatar12.50,215%0,86%
United Arab Emirates13.90,31%*1,24%
Spain14.00,956%3,82%
Egypt14.00,055%0,22%
Singapore14.00,908%3,63%
China14.58,35%33,38%
Malaysia14.80,526%2,1%
Hong Kong14.9.5,04%20,15%
Chile15.10,331%1,32%
United Kingdom15.84,5%*17,99%
Israel15.90,248%0,99%
Norway16.00,353%1,41%
Morocco16.00,081%0,32%
25,02%100%

CAPE data: starcapital.de
Market Cap data: Worldbank.org
* Source: Seeking Alpha
** estimate based on 2008 data from Worldbank.org

Building the portfolio

In the table above we have listed countries with a CAPE ratio below 16.0 in order to find the cheapest markets in world. The resulting portfolio covers about 25 percent of the current Global Market Capitalization according to data from Worldbank.org, therefore 75% of global stock markets are currently on CAPE ratios above 16.0 and not considered for our purpose. The portfolio mainly consists of Emerging Market countries, which represents an interesting diversification to any portfolio currently focusing on the US or other, more expensive markets.

The relative Market Cap percentages within the portfolio show that China, Hong Kong, United Kingdom, South Korea, Singapore, Spain and Russia cover about 80 percent of the portfolio.

From theory to practice

We could use country-specific ETFs to cover the markets listed in the table above and at least for the major countries this would be feasible in a relatively efficient way. However, not all of the countries can be covered by low-cost investments in specific ETFs, so for simplification it makes sense to use regional ETFs. Let’s take a look at some regions and their combined CAPE ratios (data source: Starcapital.de):

MarketCAPE
Emerging Europe9.7
BRICs14.6
Emerging Markets World15.1

The Simple CAPE investment strategy

Invest equal-weighted in an Emerging Europe ETF, a BRICs ETF and an Emerging Markets World ETF.

3 options below:

ishares MSCI Eastern Europe Capped UCITS ETF
Vanguard FTSE Emerging Markets UCITS ETF
ishares BRIC 50 UCITS ETF

This strategy makes sense from a valuation-perspective long-term but may come with considerable risk and volatility in the short- and medium term. However, especially as an addition to existing investments in more expensive regions of the world like the US, it represents an interesting diversification.

Update February 24, 2020: Thanks to Stonevest.org for pointing out that the simple CAPE Strategy above is very concentrated on China and Russia. This might be ok considering the relatively low CAPE ratios of these countries but there is certainly the argument for more diversification. Thus you could for example add a UK-focused ETF and reduce the weight of the BRICs.

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.

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.

Global Trend Report #8

Market trend analysis – issue 8, based on market data from June 28-July 3, 2019. End of July analysis focusing on monthly weekly and weekly timeframes only. Daily charts where more detail may be useful. 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 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.

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

MACD buy signal = MACD crosses signal line from below. Green dotted line in MACD area on chart.

MACD sell signal = MACD crosses signal line from above. Red dotted line in MACD area on the chart.

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

MACD and RSI with individual settings.

Click on charts to enlarge.

I) Global stock markets

US – S&P500 – SPX

S&P 500 monthly chart

SPX monthly chart – July 2, 2019.

status: uptrend with new MACD buy signal active since June 28, 2019.
outlook: price bounced strongly at 200 day MA. Big bearish divergence in RSI needs to resolve positively in order to confirm MACD buy signal or it will be short-lived.

S&P 500 weekly chart

SPX weekly chart – July 2, 2019.

status: uptrend with MACD new buy signal active since week of June 24, 2019.
outlook: Conflicting signals. Price at new highs not confirmed by RSI yet, which is showing a longer-term bearish divergence since early 2018.

US – Nasdaq100 – NDX

Nasdaq 100 monthly chart

Nasdaq 100 monthly chart – July 3, 2019.

status: uptrend with potential new MACD buy signal in July 2019.
outlook: Price bounced at 40 week average, uptrend continued. Like in SPX, bearish divergence between price and RSI.

Nasdaq 100 weekly chart

Nasdaq 100 weekly chart – July 3, 2019.

status: uptrend with new MACD buy signal active since July 1, 2019.
outlook: price at highs but RSI lagging behind a bit for a divergence, which should resolve if a significant breakout above the April highs at 7850 materializes.

US – Russell 2000 – RUT

Russell 2000 monthly chart

Russell 2000 monthly chart – July 3, 2019.

status: uptrend with long-term MACD sell signal from Oct 2018 weakening but still active.

Russell 2000 weekly chart

Russell 2000 weekly chart – Jul 3, 2019.

status: uptrend with new MACD buy signal active since July 1, 2019.

Europe – Eurostoxx50 – ESTX50

Eurostoxx 50 monthly chart

Eurostoxx 50 monthly chart – July 3, 2019.

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

Eurostoxx 50 weekly chart

Eurostoxx 50 weekly chart – July 3, 2019.

status: uptrend with MACD buy signal active since week of July 1, 2019.

Germany – DAX

DAX monthly chart

DAX monthly chart – July 3, 2019.

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

DAX weekly chart

DAX weekly chart – July 3, 2019.

status: uptrend with MACD buy signal active since week of June 24, 2019.

Emerging Markets – EEM

EEM monthly chart

EEM monthly chart – July 3, 2019.

status: uptrend with long-term MACD sell signal from May 2018 weak, but still active. Potential new buy signal in July 2019, depending on this months’ close.

EEM weekly chart

EEM weekly chart – July 3, 2019.

status: uptrend with MACD buy signal active since week of June 24, 2019.

II) Bonds

US 30 year bonds (US30)

monthly chart

US 30 yr bonds monthly chart – July 3, 2019.

status: uptrend with MACD buy signal active since Dec 2018.

weekly chart

US 30 yr bonds weekly chart – July 3, 2019.

status: strong uptrend with MACD buy signal active since May 20, 2019.

US 10 year bonds (US10)

monthly chart

US 10 yr bonds monthly chart – July 3, 2019.

status: uptrend with MACD buy signal active since Nov 1, 2018.

weekly chart

US 10 yr bonds weekly chart – July 3, 2019.

status: uptrend with MACD buy signal active since May 27, 2019.

Eurozone Bonds – VETY EUR GOV ETF

VETY monthly chart

VETY Eurozone Government monthly chart – July 3, 2019.

status: uptrend with active MACD buy signal since May 1, 2019.

VETY weekly chart

VETY Eurozone Government weekly chart – July 3, 2019.

status: uptrend with active MACD buy signal since May 6, 2019.
outlook: RSI extremely strong in overbought area.

Emerging Markets Bonds – VDET ETF

VDET monthly chart

VDET monthly chart – July 3, 2019.

status: strong uptrend with active MACD buy signal.

VDET weekly chart

VDET weekly chart – July 3, 2019.

status: strong uptrend with MACD buy signal active since week of June 3, 2019.

III) Metals

Gold

Gold monthly chart

Gold monthly chart – July 3, 2019.

status: uptrend with MACD buy signal active since Jan 1, 2019.
outlook: RSI rising and close to overbought levels for the first time since 2011.

Gold weekly chart

Gold weekly chart – July 3, 2019.

status: strong uptrend with MACD buy signal active since June 3, 2019.
outlook: Weekly RSI overbought on highest levels since Sep 2011.

Copper

Copper monthly chart

Copper monthly chart – July 3, 2019.

status: downtrend with MACD sell signal active since May 1, 2019.

Copper weekly chart

Copper weekly chart – July 3, 2019.

status: downtrend with MACD sell signal active since April 29, 2019.
outlook: price failed at 200 day MA for now with RSI heading down again.

IV) FX Markets

Euro/US-Dollar – EURUSD

EURUSD monthly chart

EURUSD monthly chart – July 3, 2019.

status: no clear trend with price right at 200 day moving average. Long-term MACD sell signal from May 2018 still active.

EURUSD weekly chart

EURUSD weekly chart – July 3, 2019.

status: no clear trend after a weak close above the 200 day moving average last week. MACD buy signal active since week of May 20, 2019.
outlook: price battling at the 200 day MA. MACD buy signal and RSI rising indicating a possible new uptrend after a definitive break above 200 day MA.

British Pound/US-Dollar – GBPUSD

GBPUSD monthly chart

GBPUSD monthly chart – July 3, 2019.

status: downtrend with weak MACD sell signal active since May 1, 2019.
outlook: weak RSI supporting long-term downtrend, which is weakening somewhat, as flat MACD (but still negative MACD) shows.

GBPUSD weekly chart

GBPUSD weekly chart – July 3, 2019.

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

V) Crypto Markets

Bitcoin/US-Dollar – BTCUSD (Bitstamp)

BTCUSD monthly chart

BTCUSD monthly chart – July 3, 2019.

status: uptrend with MACD buy signal active since May 1, 2019.
outlook: Healthy uptrend with RSI not overbought yet.

BTCUSD weekly chart

BTCUSD weekly chart – July 3, 2019

status: uptrend MACD buy signal active since week of Jan 21, 2019.
outlook: weekly buy signal has been active for almost 6 months. Price is now far above 200 day moving average with RSI flattening out on high levels in overbought area.

Ethereum/US-Dollar – ETHUSD (Bitfinex)

ETHUSD monthly chart

ETHUSD monthly chart – July 2, 2019.

status: uptrend with potential new monthly MACD buy signal in July 2019 (depending on the July close).
outlook: with MACD and RSI turning up, bullish long-term picture overall.

ETHUSD weekly chart

ETHUSD weekly chart – July 2, 2019.

status: uptrend with MACD buy signal since Dec 17, 2018.
outlook: Steady rise from Dec 2018 lows. With RSI nearing overbought area a pause in the rise up would not be a surprise and a correction down to retest 200 day moving average would not change the overall bullish outlook.

Ripple/US-Dollar – XRPUSD (Bitstamp)

XRPUSD monthly chart

XRPUSD monthly chart – July 2, 2019.

status: weak uptrend with weak MACD sell signal active.

XRPUSD weekly chart

XRPUSD weekly chart – July 2, 2019.

status: uptrend with weak MACD buy signal active since Feb 18, 2019.
outlook: RSI rather flat along with MACD. Price hovering around 200 day moving average.

VI) Commodities

Crude Oil – WTI

Crude Oil monthly chart

Crude Oil monthly chart – July 2, 2019.

status: no clear trend (right at 200 day moving average) with MACD sell signal from Oct 1, 2018 still active.
outlook: monthly sell signal has been active for quite some time. Price slightly above its 10 month average now, weakening the MACD sell signal.

Crude Oil weekly chart

Crude Oil weekly chart – July 2, 2019.

status: no clear trend (right at 200 day moving average) with MACD seel signal active since week of May 20, 2019.

Wheat

Wheat monthly chart

US Wheat monthly chart – July 2, 2019.

status: uptrend with weak MACD buy signal active since June 28, 2019.
outlook: MACD and RSI confirming bullish picture.

Wheat weekly chart

Wheat weekly chart – July 2, 2019.

status: uptrend with MACD buy signal active since May 20, 2019.
outlook: RSI turning down and price on the way to retest 200 day moving average. Should hold to confirm bullish monthly picture.

VII) Real Estate

US REITs – MSCI US REIT Index – RMZ

RMZ monthly chart

MSCI US REIT Index – RMZ monthly chart – July 3, 2019.

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

RMZ weekly chart

MSCI US REIT Index – RMZ weekly chart – July 3, 2019.

status: uptrend with weak MACD sell signal active since May 6, 2019. price relatively stable since April with RSI and MACD still strong.

Global Real Estate – Nasdaq Global Real Estate Index

NQG8600 monthly chart

Nasdaq Global Real Estate monthly chart – July 3, 2019.

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

NQG8600 weekly chart

Nasdaq Global Real Estate weekly chart – July 3, 2019.

status: uptrend with new MACD buy signal active since July 1, 2019. RSI very strong near overbought zone.