Winners Announced

The Technical Analyst announced the winners and runners-up of the 2014 awards at its annual awards dinner that took place on April 24 at the Le Meridien Piccadilly Hotel, London W1.

Latest Research and Commentary


Correction due for overbought Bunds

The strong rally in the Bund price this year has produced an overbought condition which will likely lead to a correction in the coming weeks, says Maxine Viemont at BNP Paribas. Meanwhile, the Nikkei stands poised for an upside breakout to target 20,000.
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10yr US Treasury yield to hold firm

Despite breaking below its May 2014 low, the 10-year US Treasury yield outlook for Q4 is stronger once 2.54% is breached, says analysts at 4CAST. Meanwhile, further losses are expected for EUR/USD following a downward break below its uptrend from July 2012.

S&P bull run intact but possible sell-off scenario

With the S&P500 reaching a critical stage next year testing its equilibrium fair value level, two scenarios present themselves for the longer-term outlook, explains Peter Lee at UBS. One of these will mean a huge sell-off to around 1200 before the bull run continues. He also presents evidence for the continuation of the commodities super cycle.

FX vs. equity spread signals relative DAX strength

An increase in the EUR/USD-DAX Currency-Equity Diffusion Index suggests that the DAX may be ready to outperform the S&P500, says Mike Sacchitello at Stone McCarthy Research Associates. An extreme reading of this index has a good record at anticipating subsequent moves, he explains.
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Bearish S&P500 divergence vs. Consumers

This year’s divergence between the S&P500 Consumer Discretionary Index and the main S&P500 index is a bearish signal for stocks, according to Riccardo Ronco at Aviate Global. Such a divergence also took place in 2000 and 2007 and suggests the main index is anticipating a decline in consumer activity.

Shorter-term buys signals for S&P500

Wall Street
The S&P500 is set to climb higher despite the recent correction, according to Ari Wald at Oppenheimer. The low level of the VIX should also mean that this correction is more muted than previous corrections both in terms of magnitude and duration.

Fixed Income

Southern Europe bonds reaching tops

Spain, Italy and Portugal bond yields are too low and are poised to top, says Chris Williams at Societe Generale. The RSI for each market are showing extreme overbought conditions with significant trendlines also about to be tested.

Strategies and Techniques


Bounce for EUR/GBP but weakness remains

The completion of a head-and-shoulders reversal pattern in EUR/GBP paves the way for a maximum multi-week target of 81.98/99, says Steve Jarvis at Tradermade. However, such a reversal will remain within the Aug 13 – Mar 14 bear channel meaning underling weakness remains.

USD index nearing short-term top

The USD index is looking like touching a near-term top supported by an overbought RSI, says Walter Zimmermann at United-ICAP. The index is now close to the 81.80 region, a major target area and the short-term RSI is showing bearish divergence at extreme levels.

Commodities & Energy

Industrial metals on verge of bullish breakout

The Bloomberg Industrial Metals Index has lagged the BBG Commodity TR Index since 2010 but has now broken out from its relative strength trend, says Riccardo Ronco at Aviate Global. Added to a break of its 50 & 200 day MA’s, this will be a significant bullish signal if July’s highs are breached.

Software & Technology

Updata connects to Trading Technologies

Updata has added Trading Technologies’ direct execution to its charting and technical analysis platform. With direct access to Trading Technologies, Updata users can now deal straight from charts and set trading alerts off backtested strategies.