The relationship between USD/JPY and gold is one of the most interesting intermarket stories around, according to George Davis, Chief FIC Technical Analyst at RBC Capital Markets. He points out that this correlation is now at its most negative since 2008.
Michael Hartnett, Chief Investment Strategist at BofA Merrill Lynch Global Research believes investors will have to face lower liquidity, the end of excess returns and the end of excessively low volatility. He says that poor performance in the four classic “canaries in the coalmine” – commodities, emerging markets, high yield bonds and small cap stocks – in the past 12 months indicates an inflection point in global liquidity and the end of zero interest rate policies.
The Russell 2000 index has broken below its long-term uptrend for the first time since 2008 and a ‘Death Cross’ has appeared, according to Andy Dodd, Technical Analyst at Louis Capital Markets.
Investors in German equities are in denial, according to Edward Loef, CEO of Loef Technical Analysis and former senior technical analyst at Theodoor Gilissen Bankiers . Since the DAX hit an all-time high in summer, the technical picture has changed considerably.
Further weakness is expected for Brent Crude and Gold, according to BNP Paribas Personal Investors. The next support for Brent is at around 88.5, whereas “below 1290, Gold remains in a bearish stance on all time-frames.”
The confirmation of a head-and-shoulders reversal pattern in the 10 year T-note tells us we should expect more downside pressure in the coming months, according to BNP Paribas Personal Investors.
The US dollar is set for long-term gains. This is the view of Martin Jones at Informa Global Markets who uses, amongst other techniques, MACD signals and fibonnacci level to analyse the USD index.
Peter Lee, Chief Technical Strategist at UBS in New York, gives his medium- to long-term view on 44 key US stocks.