Monday, February 25, 2019


Dear Reader,


Please find below our latest Weekly Trend Update providing indication on the trend status of and within major asset classes.


For last Friday’s Markets Snapshot, click here.

For a link to the weekly Chart Action chart above, click  here and  here.

For last Friday’s Global Chartbook, click here.

For last Friday’s Global Tactical Portfolio update, click here.


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Have a nice day ahead.




Trend Status Update


S&P500 closed the week with a modest gain of 0.6% (12.4%) while the VIX fear gauge dropped to four months low. Responding to weak Q4 economic numbers, the Federal Reserve via different speakers last week, evoked not only the possibility of a higher balance sheet but of the most extreme easing measure; citing as part of the toolbox the possibility of capping long-term yield “a la Japan”. While the perspective of a looser global policy (including in China) is lifting all boats, the equity segment remaining in breakout mode, trading above its Bollinger band were Chinese shares (+2.3 std), supported by optimism on a coming trade deal/truce with China.

Yesterday night, D Trump tweeted his optimism on his trade deal with China.

“I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues”.

“...productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!”


The Dollar index dropped -0.4% last week (+0.3% YTD). Chances are now for the dollar to go lower but the thrust towards looser monetary policy also extends to the BoJ (which said last week that it is ready to buy more bonds and equity ETF’s if necessary and over the week end that it could target bond yields below zero) and the ECB (which is likely preparing another TLTRO and a possible delay in taking rates away from negative territory). With Germany only narrowly avoiding recession, European PMI’s still pointing downwards and populist pressures on the rise, some economists are raising the possibility and the rationale for more extreme easing by the ECB as well. Our preference lies with emerging markets currencies in this context, more than with an outright bearish bet against the dollar (which we believe will materialize but perhaps a little later).


10y US Treasury yields rose dropped -1bp last week to 2.65% whilst German 10y Bunds were unchanged at 10bps (-3bps YTD). Italian 10yBTP yields rose +5bps to 2.85% (+11bps YTD).

According to Lipper, investors piled on more IG and HY debt last week. Beyond the decline in bond yields, other developments are crystalizing in fixed income markets that are pointing towards more monetary easing. Bond volatility is dropping, actually evaporating and the term premium (difference between long term and short-term yield) is collapsing as well.

One could question the need for the Fed to even talk about extreme easing measures near full US employment and as some inflationary pressures start to build (the risk is rising that those will be ignored to allow for more easing). The answer may be blowing in the wind of waning international investors’ appetite to swallow ever larger quantities of US treasuries...just as the US budget deficit is set to explode. The Fed will be ready as buyer of last resort just in case. For what it is worth, over the week end in his annual letter, W. Buffett lashed out at "those who preach doom" because of runaway US budget deficits, probably for the wrong reason at this stage but his voice counts as an influencer for what the Fed and the US government have in store.


Credit markets (HY) outperformed last week with US HY spreads declining -23bps (-103bps YTD) to 347bps and IG spread dropping -4bps (-25bps YTD) to 62bps.


Gold closed the week +0.5% high (+3.6% YTD) while silver jumped +1.7% (+3.0% YTD) with the gold shares continuing to recover. With platinum 3% up move on Friday which brought the metal above its 200dma, the precious metals complex despite a small correction on Thursday, is now fully engaged on the long side in our trend following model.


The Goldman Sachs Commodities index rallied +1.4% last week (+14.7% YTD) and oil rallied another +3% (+26% YTD). While most components of the commodity complex still trade below their 200d ma, several of them are breaking out including copper and DBC in our short list this week.

Trend Score Card




Click here for technical annotations.



Trend Scorecard   



US & International Equities

Check out US and International Stocks’ Technical Trend Status.







Fixed Income

Check out 10Y US Treasury and Bund yields, their trend, expected Fed rate moves and speculative positioning in 10-year Treasury Futures.


Fixed Income



US Recession Risk Radar

A comprehensive list of economic indicators to compare the current situation with previous recessions.


US Recession Risk Radar



The Dollar

Check out where the Dollar stands Trendwise and Breakoutwise vs. G7 and EM counterparts.


The Dollar



Precious Metals

Check out where precious metals stand Trendwise and Breakoutwise. Get a sense of options (cumulative open interests on calls and puts) and futures traders’ sentiment (non-commercials open positions).


Precious Metals




Why Trend Following Matters and How It Can Help You?


The last months of 2018 have shown how hard and fast markets can fall. Trend following offers guidance as to when to get in and when to get out of an asset class with changing trend characteristics. A disciplined and rule-based trend following investment approach can serve as an effective portfolio insurance technique. Our purpose, beyond tracking economic, political and monetary developments is to assist readers investing in global markets with a view on trend formation in all important asset classes.  


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© Copyright by BentinPartner llc. This communication is provided for information purposes only and for the recipient's sole use. Please do not forward it without prior authorization. It is not intended as a recommendation, an offer or solicitation for the purchase or sale of any security or underlying asset referenced herein or investment advice. Investors should seek financial advice regarding the suitability of any investment strategy based on their objectives, financial situation, investment horizon and particular needs. This report does not include information tailored to any particular investor. It has been prepared without any regard to the specific investment objectives, financial situation or particular needs of any person who receives this report. Accordingly, the opinions discussed in this Report may not be suitable for all investors. You should not consider any of the content in this report as legal, tax or financial advice. The data and analysis contained herein are provided "as is" and without warranty of any kind. BentinPartner llc, its employees, or any third party shall not have any liability for any loss sustained by anyone who has relied on the information contained in any publication published by BentinPartner llc. The content and views expressed in this report represents the opinions of Marc Bentin and should not be construed as guarantee of performance with respect to any referenced sector. We remind you that past performance is not necessarily indicative of future results. Although BentinPartner llc believes the information and content included in this report have been obtained from sources considered reliable, no representation or warranty, express or implied, is provided in relation to the accuracy, completeness or reliability of such information. This Report is also not intended to be a complete statement or summary of the industries, markets or developments referred to in the Report. 


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