Ucap Hong Kong Asset Management Limited Weekly Technical 20 th September 2016
Highlights Chart of the Week MSCI World The market remains below the resistance level at 1 725, increasing the probability of a reversal during the weeks to come. We highly recommend to remain extremely cautious in this context and be partially to totally protected. Chart Of the Week : Emergingsvs S&P 500 We have been monitoring the relative performance of Emerging Markets vs the S&P 500 for some time and have been waiting for an attractive entry point. We recommend to trade this market neutral pair trade by being Long MSCI EM ETF vs S&P 500 ETF packaged in a Mini future certificate including leverage or not. Equity Markets S&P 500 Monthly & Daily As we had been expecting for a whole 8 weeks, we have reached out 1st support target level at 2 130. The close of the month will determine whether the break out is still in play. Global Markets US T-Note Daily The T-Note is testing its support as the Fed has become more hawkish. Stay moderately long for the time being unless we break 130-00 on a weekly basis. Dollar Index Weekly The US Dollar Index has rebounded ahead of the September FOMC meeting. We continue to expect the index to reach 100.50 within the next quarter. The strong support level still lies at 92. Given the diversification within the index, it is easier to play it than buy individual pairs given recent volatility.
Global Equities YTD Performance Review Equity Indices Value Local YTD % Chg USD YTD % Chg EUR YTD % Chg North America Dow Jones 18'163 4.24% 4.24% 1.30% S&P 500 2'149 4.87% 4.87% 1.92% Nasdaq 100 4'805 4.61% 4.61% 1.67% Europe EuroStoxx 50 2'966-9.16% -6.56% -9.16% FTSE 6'814 9.15% -2.09% -6.10% SMI 8'196-7.06% -4.98% -7.65% DAX 10'374-3.44% -0.67% -3.44% CAC 4'394-5.24% -2.52% -5.24% MIB 16'399-23.43% -21.24% -23.43% IBEX 8'716-8.68% -6.07% -8.68% Asia & Emergings Nikkei 16'519-13.21% 2.54% -0.36% HSCEI 9'748 0.90% 0.80% -2.07% Kospi 254 5.64% 11.08% 7.86% TAIEX 9'153 9.77% 14.89% 11.65% IBOV 57'632 32.95% 61.38% 56.88% Nifty 8'808 10.85% 9.62% 6.55% Russian RTS 12'986 11.58% 25.91% 21.24% MSCI EM 36.93 14.71% 14.71% 11.48% MSCI World 1'696 2.02% 2.02% -0.85%
Chart Of the Week: MSCI World Monthly The market remains below the resistance level at 1 725, increasing the probability of a reversal during the weeks to come. We highly recommend to remain extremely cautious in this context and be partially to totally protected.
Chart Of the Week: Emergingsvs S&P 500 We have been monitoring the relative performance of Emerging Markets vs the S&P 500 for some time and have been waiting for an attractive entry point. We recommend to trade this market neutral pair trade by being Long MSCI EM ETF vs S&P 500 ETF packaged in a Mini future certificate including leverage or not.
Equity Markets
S&P 500 Monthly& Daily As we had been expecting for a whole 8 weeks, we have reached out 1st support target level at 2 130. The close of the month will determine whether the break out is still in play.
Nasdaq 100 Monthly& Daily The Nasdaq remains below its 16 year resistance level. The support zone is located in the range of 4 500 to 4 600 where we believe the market should initially consolidate to. Stay nimble
DJ Euro Stoxx50 Monthly The Eurostoxx50 remains in a downtrend and remains below the Weekly & Monthly Resistance level at 3 080 3 100.
DJ Euro StoxxBanks Daily The EurostoxxBanks Index rejected the 100.00 resistance mark last week & remains in the global downtrend we are observing since the breakdown of September 2015. We recommend to sell rallies and even keep a small short position to neutralise Europe Beta risk until we break 110.00.
Nikkei 225 Weekly We have no conviction opinion linked to the Japanese market but have started buying USDJPY since we reached our buying target below 101. We believe the currency could weaken considerably over the coming year, indirectly helping equities to outperform on a relative basis.
Global Markets
US T-Note Daily The T-Note is testing its support as the Fed has become more hawkish. Stay moderately long for the time being unless we break 130-00 on a weekly basis.
US High Yield Tracker Weekly US High Yield has lived a strong rally since the break out that took place in the zone of USD 82.00. We believe prices should be topping out in the USD 87 to 89 zone as yields reach a level of 5.00%.
German 10Y Bond Rates Weekly The German 10y government bond yield as rebounded slightly above the 0% mark. The massive ECB QE program and the low inflation environment point to low rates for a long time rates will stay low for a long time.
US Swap Curve Weekly The US 2Y-10Y Swap curve continues to flatten has interest rate hikes expectations are low over the next years.
Dollar Index - Weekly The US Dollar Index has rebounded ahead of the September FOMC meeting. We continue to expect the index to reach 100.50 within the next quarter. The strong support level still lies at 92. Given the diversification within the index, it is easier to play it than buy individual pairs given recent volatility.
EURUSD Weekly The pair remains in the same range and the moves are clearly driven by US rate hike probabilities. Remain nimble trading and take advantage of volatility spikes.
USDJPY Monthly The Dollar/Yen seems has bottomed out and should eventually return to 120. The Japanese central bank has left the door open for further action in September and the long-term support has held. Stay long.
GBPUSD Monthly The Cable closed the month of June below the 20-year neckline. The path is now officially opened to head towards our target set at 1.05/1.10 over the next 18 months. We recommend buying protection or short GBPUSD on strength & build a medium-term short position.
Gold Weekly Consolidation is pursuing on the basis of decorrelation with the US Dollar. We need 1 or 2 weeks close above 1 340 in order to make the next move. Range trade the underlying in the mean time.
WTI CrudeOil Monthly We continue to play the $40-$50 range on the WTI until a longer term pattern emerges.
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