Bear market rally warms up

The AUD is still pointing risk higher:

Aussie bonds have been hosed at the long end, representing a great entry opportunity:

Stocks have a neat little inverse head and shoulder pattern:

Dalian is soft:

Big Iron is running as it mistakes restocking for a new round of Chinese stimulus:

Big Gas is up too. I’m agnostic on oil now. The bottom is probably in as US rigs start to fall but you never know:

Big Gold is jumping. I called this rally in December as the Fed was clearly going to pause. But I think selling into it is the play as the ECB has to reverse even harder:

Banks are enjoying another dead cat bounce:

Big Property too:

I expect this rally to have some legs for a while. I’ll be selling into it.

Comments

  1. ResearchtimeMEMBER

    China is stimulating HARD… AEP’s take Bears beware: the Fed has listened to the primordial scream of world markets (https://www.telegraph.co.uk/business/2019/01/06/bears-beware-fed-has-listened-primordial-scream-world-markets/?li_source=LI&li_medium=li-recommendation-widget) “The Chinese have cut the required reserve ratio for banks a fifth time. Local governments have been ordered to pull forward new bond issuance… comes too late to stop a ‘recession with Chinese characteristics’ in early 2019. Berenberg Bank thinks the true growth rate has fallen to 3pc. A Renmin University professor cited closed-door research suggesting that it may even be negative. His lecture went viral on the web before censors shut it down. Capital Economics says it will take several months for the new stimulus to reach China’s real economy. This time recovery will be weaker than in past episodes. Debt saturation – and stalled reform – has choked the economy. It expects growth to bottom out at 4pc in the second quarter based on proxy measures.

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