Hey it’s Kieran! another week is upon us. It’s Martin Luther King day in the US today with some markets closing early (Indices & Metals mainly) but most markets are open business as usual, and work behind the scenes on our new product continues non-stop. More to share on this soon! The current Traderseed Challenges are going nowhere though, so jump in and test your skills!
Weekly Watchlist
Retail sales data on Wednesday and bank earnings on Tuesday & Wednesday will be the highlight of a holiday shortened week. We’ll also get data on US housing starts and existing home sales on Thursday, alongside US Unemployment numbers the same day. European inflation numbers are out on Wednesday and ECB president Lagarde has 4 key speeches scattered throughout the week.
The Macro View
Positioning continues to trend towards neutral. We’ll likely need at least a few weeks here or positioning to go ‘Light’ for another sustained leg up from here, however the current equities bull run still ‘feels’ pretty strong.
Finally some Outflows. -$7bn in outflows from equity markets last week, leaving the market net $-841 million over the past 4 weeks. Certainly not panic selling. A pretty orderly pull back so far.
Market Breadth falling. S&P500 stocks above the 20 day moving average has fallen hard lately. This is a fresh 2 month low.
Asset Managers remain heavily long. History would dictate that some of these longs need to be flushed out before another sustained up-leg could commence.
ETF Flows flashing a warning signal. Interesting chart showing that when ETF flows top, the S&P 500 usually sees a short term pull back. ETF Flows put in a big top at the end of last year, however no pull back in the S&P 500 has materialised yet.
Retail buyers are not afraid though. Retail buying of single-stocks spiked again last week and now look very extended.
The 3 waves of inflation of the 1970s. Long time readers will recognise this chart of the 3 waves of inflation that I have shared over the last year or so. After the initial wave, inflation had more or less normalised and markets had priced in a return to normal. However what followed was two more massive waves, and a decade of panic and despair in the markets. Always keep an open mind. Have a great week everyone.
I hope you found this interesting and useful. As ever, keep your risk management top of mind, trade safe, and stay nimble out there.
Have a good week!
Kieran
www.traderseed.io
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