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Gordon T Long Research exclusively distributed at MATASII.com
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MARKET PERSPECTIVE
TECHNICAL ANALYSIS
You Are Missing our Subscriber Mid-Week MARKET LAB - You Are Working with only 1/2 the info?
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US GROWTH SCARE CLOSER TO BEING PRICED IN
HOT MARKET IS NOT US-MAG-7 BUT THE DAX-SX5E (EU)
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THE CYCLICAL v DEFENSIVE ROTATION
03-06-25
The chart above compares Cyclicals v Defensives ex commodities with consensus forward four-quarter US GDP growth. What this chart suggests and makes it easy to recognize is that what we have been experiencing in weekUS markets is the repricing of this shift. The question is it enough and complete? - YES - This is likely the case IF we ignore the bullion import (and tariff front-running) effects of surging US trade deficits on growth in Q1. However, it is NO if the Q1 GDP tracker is right (-1.5% Q1 GDP)!
BUT THE MONEY HASN'T JUST BEEN ROTATING, BUT SOME FLOWING OVER THE "POND"!
BofA OBSERVATION
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EUROPE: For every $100 of outflows from European equities since Feb'22 start of Russia/Ukraine/NATO war ($255bn outflows in total), there have been just $4 of inflows in past 4 weeks.
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US: For every $100 of inflows to tech funds since Nov'22 ChatGPT announcement ($99bn in total), there have been just $6 of outflows in past 5 weeks."
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HOT EUROPE & THE GERMAN DAX
The SX5E is down 2% from the highest print a few sessions ago, and the index is flat since Feb 13. Note the short term trend line comes in around these levels. RSI is showing big negative divergences. The perceived SX5E bull is stronger than the realized.
The German DAX has seen huge volatility over the past sessions, but we have actually not produced much gains since Feb 17. Huge volatility, minimal returns isn't what "serious" investors want. The positive trend channel that has been in place YTD remains intact, but we are getting increasingly "bothered" by the negative RSI divergence. DAX monthly RSI at 80! Sure, overbought can stay overbought for longer than most think possible, but last time we saw similar RSI monthly levels was followed by a correction for the index.
USA NO LONGER THE HOT MARKET
US Equity underperformance AND the Dollar falling this week despite new tariffs being implemented
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TECHNICAL ANALYSIS
INDEX
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1 - EQUITY MARKETS
CONTROL PACKAGE
S&P 500
MATASII BANKING INDEX
MATASII FINANCIALS INDEX
RUSSELL 2000 (IWM)
MAGNIFICENT 7
CONTROL PACKAGE
NVDA
GOOG
META
AAPL
TSLA
MSFT
AMZN
FOREIGN EXCHANGES (SITUATIONAL SELECTIONS)
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GLOBAL
2 - COMMODITIES
CRB COMMODITY INDEX
GOLD
SILVER
3 - CURRENCY MARKET
DXY
4 - BOND MARKET
CONTROL PACKAGE
TNX
5 - CREDIT MARKET
YIELD CURVE
JNK (HY)
MARKET MONITOR (SUBSCRIBERS ONLY)
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NEW IMAGE CHANGES ARE LABELED WITH A BLUE TRIPLE ***STAR***
OLD IMAGE CHANGES ARE LABELED WITH A RED TRIPLE ***STAR***
OLD IMAGES REFLECT MINIMAL CHANGE, but Narrative is ALWAYS updated.
REMEMBER: SIMPLY CLICK YOUR LIVE SUBSCRIBER LINK TO SEE THE LATEST UPDATED LIVE CHART.
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CONTROL PACKAGE
There are FOUR charts we have outlined in prior chart packages that we will continue to watch closely as a CURRENT "control set":
- The S&P 500 (CHART LINK)
- The DJIA (CHART LINK)
- The Russell 2000 through the IWM ETF (CHART LINK)
- The MAGNIFICENT SEVEN (CHART ABOVE WITH MATASII CROSS - LINK)
- Nvidia (NVDA) (CHART LINK)
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IT WAS QUITE A WEEK!!
Stocks suffered their worst week in six months as an avalanche of geopolitical and macroeconomic headlines crossed paths with an ugly technical situation.
REASONS TO BE FEARFUL:
- Growth Concerns (payrolls + ISM manuf.. follows weak confidence readings)
- Tariff Fatigue magnified by thematic re-pricing in AI
- Global Complexity (Ger & Fra Yields breaking out + China higher again on JD, BABA QwQ-32B AI Model)
- Technicals Weak (SPX flirting with 200dma 5732, counterbalanced by most major indices & single stock bellwethers approaching technically "oversold" levels)
- Systematic Supply (CTAs have sold almost $60bn of US equity delta in the last week, ~30bn SPX)
- Positioning Elevated (HF Gross Leverage rose +1.1 pts this week and sitting in 100th percentile vs past 1-year // Nets remained ~flat and in 47th percentile vs past 1-year)
- Liquidity very challenged making new lows
- LO Risk Reduction (seen in relative out-performers such as HCare, Utilities, & Semis)
- Consumer Woes (think: ANF, FL, ROST, VSCO, Cruise lines, etc.)
- Poor Seasonality (bounce set up for 3/14)
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FLOWS PERSPECTIVE:
- Asset managers were steadily reducing risk in relative out-performers and started rotating into defensives late in the week (staples, telcos, and insurers).
- LOs finished -$5b net sellers while
- HFs finished +$1.5b net buyers, consistent with the flavor of last week’s activity.
SECTOR PERSPECTIVE:
- Only Healthcare was green on the week with Financials proper fucked...
- Largest Sell Skews: Tech, Financials, & Discretionary
- Largest Buy Skews: Comm Services.
BOTTOM LINE: RSI says bottom in, Sentiment says not yet though the average stock is off 30% from highs. The markets are generally oversold and the all-important CTA community has de-risked, but certain aspects of sentiment in general, and gross leverage among hedge funds in particular, make the overall tactical backdrop messy and absolutely not a clear-cut signal.
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CHART NOTES:
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PRICE - The S&P 500 was trading at the cash close Friday at 5770.19 up +31.66 (+0.55%) for the day but down significantly compared to last Friday's close at 5954.51.
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DMA - Price found overhead resistance form the Friday bounce at the 200 DMA level.
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MATASII PROPRIETARY MOMENTUM INDICATOR - Momentum in the middle panel offered support at the major black dashed trend line & marked by the red arrow.
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MARKET LAB
Being bearish on US mega-cap tech carries higher risk than being bullish. Timing is crucial — history shows that even correctly calling the 2000 tech bubble peak, but being early led to massive rallies against short positions (13% in one month, 31% in three, and 94% in six). ,While today’s market may not have the same upside, Shorting US tech still requires near-perfect timing.
OBSERVATION -
During the 2000 Dotcom Bubble the market also weakened near the March Quadruple Witch, but didn't fully start breaking down until September.
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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PATTERN – SPX
03-08-25
We have noticed similarities to the 2022 correction in markets. Yes, we will have bounces, but sometimes you should zoom out and look at longer term crosses. The post Covid bull started with the 50 day crossing the 100 day in Q32020. The 2022 bear went serious post the negative 50/100 day cross early in the year. The latest bull went aggressive as the positive 50/100 day cross occurred in early 2024. Note the that the negative 50/100 day crossed kicked in this week. (click to enlarge).
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CORRELATION - SPX v 20Y TLT - 03-07-25
SHOWTIME!!
Critical - SPY/TLT - Price Ratio v 200 DMA trendline.
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SENTIMENT - OVERSOLD - 03-08-25
The S&P went from overbought to extreme oversold in just eight trading days recently.
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***THE MATASII BANK INDEX***
STRONG BANK EARNINGS & WEAKENING YIELDS PROPEL BANKS HIGHER
MATASII CHART NOTES:
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PRICE - The MATASII Bank Index fell Friday closing at 1398.933 -13.74 (-0.97%) for the day and down hard for the week compared to last Friday's close at 1539.03.
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MATASII PROPRIETARY MOMENTUM INDICATOR - In the bottom panel, the MATASII Proprietary Momentum Indicator broke major support at the dashed black trend line above the red arrow.
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MARKET LAB
Hot Euro Banks or Tech? The SX7E/QQQ ratio needs little commenting. We saw the ratio reverse lower from these levels back in 2023. Sure, things are different this time around, but the extreme surge looks a bit "stretched"..
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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MATASII BANK INDEX - ANALYTICS
THE EURO BANK INDEX CONTINUES TO OUTPERFORM
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PERFORMANCE - 02-17-25:
YTD: SX7E +20%, QQQ +5%, MAG +1%.
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PATTERN
European Banks have been matching Mag-7 performance!
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***THE MATASII FINANCIAL INDEX***
FINANCIAL MARKETS CURRENTLY STRONGER THAN MAG-7
MATASII CHART NOTES:
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PRICE - The MATASII Financial Index fell hard this week to close Friday at 2271.62 down -27.14 (-1.18%) for the day,and down further compared to last Friday's close at 2433.49.
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DMA - It appears the target is the 200 DMA which matches the bottom of the control channel.
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MATASII PROPRIETARY MOMENTUM INDICATOR - In the bottom panel, the MATASII Proprietary Momentum Indicator broke support at the major black dashed line trend line highlighted by the red arrow.
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The Financial Select Sector SPDR Fund (XLF) was experiencing notable gains before hitting a hard wall as US Growth forecasts began being taken down with the threat of Tariff Wars. | | |
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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MATASII FINANCIAL INDEX - ANALYTICS
In one month these flows have reversed and fallen.
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FUND FLOWS
02-04-25
Fund flows to Financials surged to a 3-year high on the back of strong Q4 earnings reports.
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FUND FLOWS
02-02-25
Financial Mania - Biggest inflows to financials since Jan’ 22.
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***IWM - LONG iSHARE RUSSELL 2000 ETF - Daily***
MATASII CHART NOTES:
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PRICE - The IWM - LONG iShare Russell 2000 ETF was up Friday closing at 205.95 +0.67 (+0.33%) compared to closing last Friday at 214.65.
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DMA - Price broke through the200 DMA support finding support at a long term support level marked by a large horizontal dashed black line in the Price chart below.
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MATASII PROPRIETARY MOMENTUM INDICATOR - The IWM broke a major Proprietary Momentum Indicator support level (lower panel) and fell further to a support level marked by the red arrow.
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CORRELATION - 02-08-25
RUSSELL undervalued relative to S&P 500
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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PATTERN - 02-21-25
Russell put in a massive down candle, breaking slightly below the 200 day moving average and the longer term trend line. No bueno.
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RUSSELL TECH - The low quality tech stuff has been fading lately... | | |
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CONTROL PACKAGE
- APPLE - AAPL - DAILY (CHART LINK)
- AMAZON - AMZN - DAILY (CHART LINK)
- META - META - DAILY (CHART LINK)
- GOOGLE - GOOG - DAILY (CHART LINK)
- NVIDIA - NVDA - DAILY (CHART LINK)
- MICROSOFT - MSFT - DAILY (CHART LINK)
- TESLA - TSLA - DAILY (CHART LINK)
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***MAGNIFICENT 7***
MATASII CHART NOTES:
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PRICE - The Mag-7 closed Friday at 2008.40 down -1.68 (-0.03) for the week compared to last Friday when we closed at 2109.43.
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MATASII PROPRIETARY MOMENTUM INDICATOR - Meanwhile the MATASII Proprietary Momentum Indicator (lower panel) broke support level marked by the dotted black trend line and the red arrow.
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MARKET LAB
Consider that the typically high-performing S&P 500 technology sector lagged the broader index in January by the widest margin since 2016. Four of the Magnificent 7 have recently been trading below their 50-day moving averages, another bearish signal for traders. In addition, hedge funds are increasingly reducing gross exposures to these kinds of stocks for the first time in a year, while companies' insiders are selling shares at the highest rate since 2021, raising questions about the company's ability to achieve earnings targets and justify their lofty valuations. (Morgan Stanley)
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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PATTERNS - 02-28-25
MAG7 - YTD moves in "Mag 7":
TSLA -30% / NVDA - 11% / GOOGL -11% / MSFT -7% / AMZN -5% / AAPL -5%...META +12%
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CORRELATION
This chart makes the 2000 Dotcom Bubble look like a "minor warm-up"?
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EARNING SEASON RECAP
02-28-25
This earnings season was the first time in two years that the 'Magnificent 7' stocks did NOT handily beat sales estimates.
Mag7 stocks are down over $625 billion in market cap in the last two weeks, (with only META and NVDA up this week). The chart below shows the weekly trading percentage changes of each of the Mag-7 since August 2024.
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***NVIDIA - NVDA - DAILY***
MATASII CHART NOTES:
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PRICE - NVDA pushed higher Friday closing at 112.69.92 up +2.12 (+1.92%), but down hard compared to last Friday at 124.92.
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DMA - Price has broken well below the 200 DMA and with support now being found with longer term support channel.
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MATASII PROPRIETARY MOMENTUM INDICATOR - The NVDA MATASII Momentum indicator initially found support at its lower support level (black dashed line), but broke through it decisively to a level now marked by the red arrow.
NVDA ANNOUNCES ITS EARNINGS WEDNESDAY AFTER THE MARKET CLOSE.
THIS WILL BE AN IMPORTANT EVENT
THIS WEEK.
Prior Longer Term Note:
- At some point, the major unfilled gaps (at much lower levels) must be filled. We anticipate a likely test of the 200 DMA in Q4 2024 or Q1 2025.
- NVDA therefore may no longer become a Short to Intermediate Long Term hold, but rather a position trading stock, as other competitors enter the space, force margins and the earnings growth rate contracts.
NOTE RIGHT: Analyst Rating to the right are always too positive and delayed. History suggests the trick is to BEGIN reducing positions as soon as ANYONE changes their rating to Hold or Lower.
5 OUT OF 66 IS A CONCERN
(We use the ratings for Mag-7 Only.)
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MARKET LAB
AS GOES NVDA SO GOES THE MAG-7!
AS GOES THE MAG-7 SO GOES THE MARKET!
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With a market cap of $3.61tn and nearly as big as the entire DAX and CAC combined, earnings are going to be a big event. To give you a scale for their astonishing earnings trajectory over such a short period of time, at the recent lows in Jan 2023 Nvidia earned $4.4bn over the preceded last 12m. However, today the consensus will see them earn $61.4bn over the last 12 months. By the time we hit 2027, they are expected to earn $118.1bn LTM.
The growth in NVDA’s forward revenues and operating earnings have both been remarkable, as has its ability to maintain a forward profit margin north of 55%. Nvidia’s forward P/E of 32.6 is certainly higher than the S&P 500’s forward earnings multiple of 21.6. But it looks reasonable relative to the company’s expected forward earnings growth of 53.1%.
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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CHART RIGHT-- NVDA - 01-29-25
Fighting the 200 DMA
NVDA is trading right on the 200 day moving average as of writing. Massive moves, especially if you consider the changes in market cap. This is not how strong leaders behave.
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***GOOGLE - GOOG - DAILY***
MATASII CHART NOTES:
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PRICE - GOOG closed higher for the day on Friday at 175.73 up +1.54 (+0.88%,) but down when compared to 172.22 last Friday.
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DMA - Earlier in the week Price broke through support at the 200 DMA, but returned to it by the end of the weeks close.
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MATASII PROPRIETARY MOMENTUM INDICATOR - Momentum found support at the dashed black trend level and bounced off it to a level marked by the red arrow in the lower panel.
NOTE RIGHT: Analyst Rating to the right are always too positive and delayed. History suggests the trick is to BEGIN reducing positions as soon as ANYONE changes their rating to Hold or Lower
14 OUT OF 67 IS EXCESSIVE
(We use the ratings for Mag-7 Only)
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NEW-- GOOG - 02-21-25
Google is slowly but clearly starting to shift back to a bearish market and especially since indices are heading for new all time highs. Google is showing some real weakness. Waiting patiently for another -20% here is key and until then all we can do is sit on the sidelines.
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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NEW-- GOOG - 02-21-25
Google under bearish pressure - Likely to test support level of 175.00.
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NEW-- GOOG - 02-21-25
Looks like GOOG is pulling back with the rest of the market. Discount buying opportunity or more downside to $180 area.
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***META - META - DAILY***
MATASII CHART NOTES:
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PRICE - META was down to 625.66 -2.27 (-0.36%) for the day, but down from last Friday's close at 683.55.
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RSI - META broke its RSI support level quite hard this week.
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MATASII PROPRIETARY MOMENTUM INDICATOR - The MATASII Momentum Indicator broke lower from its previous Support level shown by the black dotted trend line and marked by the red arrows.
NOTE RIGHT: Analyst Rating to the right are always too positive and delayed. History suggests the trick is to BEGIN reducing positions as soon as ANYONE changes their rating to Hold or Lower.
10 OUT OF 75 IS EXCESSIVE
(We use the ratings for Mag-7 Only.)
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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PATTERN - META - 02-21-25
META likely to now enter a corrective consolidation.
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PATTERN
META MANIA - Another day, another record for META, the stock that can't go down. RSI at 84!
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***APPLE - AAPL - DAILY***
CHART RIGHT: Does Apple have the cash to sustain its highly aggressive stock buyback program which has been supporting its Price per Share?
MATASII CHART NOTES:
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PRICE - AAPL closed at 239.07 up 3.74 (+1.59%) for the day, but down when compared to last Friday at 241.84.
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DMA - AAPL closed at the 50 DMA level.
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MATASII PROPRIETARY MOMENTUM INDICATOR - AAPL's MATASII Proprietary Momentum Indicator marked by the red arrow in the middle panel is basically flat.
NOTE RIGHT: Analyst Rating to the right are always too positive and delayed. History suggests the trick is to BEGIN reducing positions as soon as ANYONE changes their rating to Hold or Lower.
20 OUT OF 51 IS EXCESSIVE
(We use the ratings for Mag-7 Only.)
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AAPL - 02-21-25
AAPL's Net Cash & Investments after excluding total Debt to organically fund buybacks!
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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NEW-- AAPL - 02-21-25
We are looking for next phase dump.
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NEW-- AAPL - 02-21-25
Classic bearish formation - expect a fall.
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***TESLA - TSLA - DAILY***
MATASII CHART NOTES:
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PRICE - TSLA closed slightly down Friday at 262.67 -0.78 (-0.30%) for the day, but down significantly when compared to last Friday at 292.98.
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DMA - Price broke support offered by the 200 DMA and in fact nearly touched the 400 DMA (~80 WMA).
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MATASII PROPRIETARY MOMENTUM INDICATOR - TSLA's MATASII Momentum Indicator is offering an important level of support as shown by the black dashed trend line in the middle panel and marked by the red arrow.
NOTE RIGHT: Analyst Rating to the right are always too positive and delayed. History suggests the trick is to BEGIN reducing positions as soon as ANYONE changes their rating to Hold or Lower.
30 OUT OF 57 IS EXCESSIVE
(We use the ratings for Mag-7 Only.)
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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***MICROSOFT - MSFT - DAILY***
MATASII CHART NOTES:
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PRICE - MSFT closed Friday at 393.31 down -3.58 -0.90%), but also down from last Friday at 396.99.
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DMA - MSFT is now well below the 50-100-200 DMAs and is in fact below its 400 DMA (~80WMA). The 50-100-200 are all in the process of crossing to the downside.
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MATASII PROPRIETARY MOMENTUM INDICATOR - The MATASII Momentum Indicator shown by the heavy black dashed trend line in the middle panel offered initial support which price bounced off of before finding overhead resistance at the lighter dashed black line marked by the red arrow.
NOTE RIGHT: Analyst Rating to the right are always too positive and delayed. History suggests the trick is to BEGIN reducing positions as soon as ANYONE changes their rating to Hold or Lower.
4 HOLDS OUT OF 58 IS A CONCERN
(We use the ratings for Mag-7 Only.)
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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***AMAZON - AMZN - DAILY***
MATASII CHART NOTES:
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PRICE - AMZN closed down Friday for the day at 199.25 -1.45 (-0.72%), but down from last Friday's 212.28.
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DMA - The 200 DMA is currently offering support.
- .MATASII PROPRIETARY MOMENTUM INDICATOR - The MATASII Momentum Indicator is currently offering support at the black dotted trend line level marked by the red arrow.
NOTE RIGHT: Analyst Rating to the right are always too positive and delayed. History suggests the trick is to BEGIN reducing positions as soon as ANYONE changes their rating to Hold or Lower.
4 HOLDS OUT OF 76 IS A CONCERN
(We use the ratings for Mag-7 Only.)
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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FOREIGN EXCHANGES (SITUATIONAL SELECTIONS)
WATCH LIST
- GERMAN DAX (See Weekly Market Lab)
- CHINA TECH (See Weekly Market Lab)
- HSTECH
- KWEB
- BABA
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GERMAN DAX - 02-19-25
Our Proprietary MATASii methodology published last weekend (chart left) spotted this drawdown perfectly. DAX reversing perfectly off that huge upper trend line. The DAX squeeze has managed sucking in a lot of suckers. First support at 21k (futures), but this could correct much more.
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HOT EUROPE & THE GERMAN DAX
The SX5E is down 2% from the highest print a few sessions ago, and the index is flat since Feb 13. Note the short term trend line comes in around these levels. RSI is showing big negative divergences. The perceived SX5E bull is stronger than the realized.
The German DAX has seen huge volatility over the past sessions, but we have actually not produced much gains since Feb 17. Huge volatility, minimal returns isn't what "serious" investors want. The positive trend channel that has been in place YTD remains intact, but we are getting increasingly "bothered" by the negative RSI divergence. DAX monthly RSI at 80! Sure, overbought can stay overbought for longer than most think possible, but last time we saw similar RSI monthly levels was followed by a correction for the index.
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The last time the EuroStoxx50 printed a new all-time high was 14th March 2000...very nearly 25 years go! | | |
FLOWS - European equity flows turned positive in January, with $3.7B of inflows – the highest level since February 2023. | | |
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CONTROL PACKAGE
- Invesco DB Agricultural Fund (DBA)
- VanEck Agribusiness (MOO)
- Food Producers (FT350 Food Producers - NMX45)
- Teucrium Agricultural Fund ETV (TAGS)
- Advisory Shares Restaurant ETF (EATZ)
- Invesco Food & Beverage ETF (PBJ)
- Teucrium Wheat Fund ETV (WEAT)
- Teucrium Corn Fund ETV (CORN)
- Teucrium Soybean Fund ETV (SOTB)
- Teucrium Sugar Fund ETV (CANE)
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***CRB COMMODITY INDEX***
CHART NOTES:
- The overall Commodity Indexes, as measured by the CRB Commodity, reflect a Corrective / Consolidation is presently nearing completion.
- However, many of the individual sectors (not shown here) have already completed the Corrective / Consolidation and broken higher over the last 30-60 days.
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01/18/25: Rising global PMIs = Long commodities
Got Commodities?
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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COMMODITIES - MATERIALS
02-20-25
HFs net bought US Materials at the fastest pace since February 2021, driven entirely by long buys.
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DR COPPER - 02-20-25
"If the aggressive fiscal actions taken by Trump 2.0 and the Chinese government improve global economic growth, that might increase business and consumer confidence and spending. We’ve been watching for signs of this in copper prices, which have popped 14.9% ytd."
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***GOLD***
CHART NOTES:
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PRICE - Gold fell with Friday's post-market trading at 285 down -1.635 (-0.06) for the day, but well down from last Friday's close of ~2856.998.
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3 SIGMA BOMAR - Gold once again touched its 3 Standard Deviation Bomar Band before retreating - this is a cautionary signal. bounced down from it!!
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MATASII PROPRIETARY MOMENTUM INDICATOR - Momentum found support at a lower MATASII Momentum Indicator trend line shown in the lower panel and marked by the black dashed trend line before bouncing above (as shown by the red arrow).
GOLD IS DUE FOR A CORRECTIVE / CONSOLIDATION!
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CORRELATION - 03-07-25
GOLD versus Fair Value Model
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SITUATIONAL ANALYSIS
- Gold has recently been supported and further boosted by the PBoC resuming Gold purchases in November after a six-month halt.
- We note that ETF buying however has been surprisingly weak over the past four years, as shown by the 2nd chart above.
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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FLOWS – GOLD - 03-08-25
Shining the brightest ever
Largest 4-week inflow to gold on record.
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PATTERNS - 02-28-25
Gold - so far so good - The much needed pause playing out as it should.
50 day now at $2770, just above the big break out level. RSI has come down, but could come down some more before one starts to nibble again.
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CORRELATIONS - 02-15-25
"Weird" in gold land
The latest melt up in gold started just when the DXY reversed in January. Noteworthy is that gold is putting in the biggest down candle in a while, despite the DXY selling off further.
Chart shows gold vs DXY inv.
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GOLD - 02-14-25
Gold Prices in 2024 U.S. Dollars - The real (inflation-adjusted) price of gold has reached a new all-time high, driven by several factors including U.S. tariff uncertainties, geopolitical tensions, and increased demand from global central banks. - Deutsche Bank
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GOLD/CPI RATIO - 02-12-25
The inflation-adjusted price of gold has reached a new high, breaking its previous record from January 1980. This reflects the ongoing devaluation of the U.S. dollar, global economic uncertainties and strong demand from central banks.
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***SILVER***
MATASII CHART NOTES:
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PRICE - Silver closed Friday at 32.506 down -0.1198 (-0.37%) for the day, but up for the week compared to last Friday's close at 31.17.
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DMA - Silver found support at the 100 DMA above its 100 DMA before bouncing up.
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MATASII PROPRIETARY MOMENTUM INDICATOR - The MATASII Proprietary Momentum Indicator has recently been flat, more-or-less.
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02-17-25: Silver often comes late to the party, but when it finally gets there it can be an unstoppable hedonist. | |
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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SILVER - 02-17-25
We are seeing the same dynamics with silver as we are seeing with gold. There is a shortage of deliverable physical metal in London after years of EM central-bank hoarding.
Comex silver warehouses in the US are filling up while stocks in London are falling.
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CONTROL PACKAGE
There are NINE charts we have outlined in prior chart packages, which we will continue to watch closely as a CURRENT Control Set:
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US DOLLAR -DXY - MONTHLY (CHART LINK)
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US DOLLAR - DXY - DAILY (CHART LINK)
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GOLD - DAILY (CHART LINK)
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GOLD cfd's - DAILY (CHART LINK)
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GOLD - Integrated - Barrick Gold (CHART LINK)
- SILVER - DAILY (CHART LINK)
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OIL - XLE - MONTHLY (CHART LINK)
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OIL - WTIC - MONTHLY - (CHART LINK)
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BITCOIN - BTCUSD -WEEKLY (CHART LINK)
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10y TIPS - Real Rates - Daily (CHART LINK)
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***US DOLLAR - DXY - DAILY***
MATASII CHART NOTES:
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PRICE - The dollar was down slightly in after hours Friday trading at 103.905 -0.23 (-0.22%), but down significantly when compared to last Friday's 107.564 level.
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DMA - The DXY broke the important 200 DMA support level this week.
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MATASII PROPRIETARY MOMENTUM INDICATOR - The dollar found support at the MATASII Momentum Indicators' dotted black trend line marked by the red arrow in the lower panel.
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IMPORTANT!
THE US ELECTION HAS POTENTIALLY MADE MAJOR CHANGES IN THE PERCEPTION OF THE US$.
THERE IS A STRONG CHANCE THAT THE LOWS SHOWN BELOW ARE
NO LONGER VALID.
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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OVERVALUED US DOLLAR
02-21-25
The chart below takes the real-effective exchange for each major currency – its trade-weighted value adjusted for inflation – and looks at its 10-year
Z-score, ie how far above or below it is versus its long-term average. The US REER’s Z-score is second only to Poland’s.
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OVERVALUED US DOLLAR
02-21-25
Do we have a Head & Shoulders pattern potential? The pattern needs to break the Neckline for confirmation.
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DOLLAR DEPRECIATION - 02-16-25
Modest but broad Dollar depreciation to start the year.
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DOLLAR - DXY - 01-18-25
For now just a much needed pause. 21 day and the steep trend line come in around these levels. The Dollar Has Now Surpassed All Previous Peaks, Except 1985.
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CONTROL PACKAGE
There are FIVE charts we have outlined in prior chart packages that we will continue to watch closely as a CURRENT "control set":
- The 10Y TREASURY NOTE YIELD - TNX - HOURLY (CHART LINK)
- The 10Y TREASURY NOTE YIELD - TNX - DAILY (CHART LINK)
- The 10Y TREASURY NOTE YIELD - TNX - WEEKLY (CHART LINK)
- The 30Y TREASURY BOND YIELD - TNX - WEEKLY (CHART LINK)
- REAL RATES (CHART LINK)
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LOWER BOND YIELDS CORRECTLY SPOT A WEAKER MACRO | FISHER'S EQUATION = 10Y Yield = 10Y INFLATION BE% + REAL % = 2.340% + 1.9264% = 4.2664% | |
10Y REAL YIELD RATE (TIPS)
Real Rates have broken through its descending trend wedge channel line, (shown in the chart to the right - as of close 03/07/25). (LATEST)
The latest US NY Fed SCE has seen inflation expectations continue to increase across the forecast horizon.
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***10Y UST - TNX - WEEKLY***
MATASII CHART NOTES:
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PRICE - The TNX closed Friday at 4.32 up +0.03 (+0.68%) for the day and up nicely from last Friday's 4.23.
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WMA - Price has fallen to the 40 WMA and below the downward dotted black trend line marked near the red arrow.
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MATASII PROPRIETARY MOMENTUM INDICATOR - The Proprietary MATASII Momentum Indicators' (lower panel) support levels, shown by the dotted black line and highlighted by the red arrow is currently offering support.
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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***10Y UST - TNX - HOURLY***
CHART NOTES:
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PRICE - The TNX closed Friday at 4.32 up +0.03 (+0.68%) for the day and up nicely from last Friday's 4.23.
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MATASII PROPRIETARY MOMENTUM INDICATOR - The Proprietary MATASII Momentum Indicators (lower panel) shows that price bounced off support at the dashed black line to a level highlighted by the red arrow.
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YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART
Macro Analytics Chart Above: SUBSCRIBER LINK
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There is a strong possibility that 4.72%, which was achieved recently, was the high for the current cycle. We are now
"decisively" above the range, and there is no real stop until recent highs around 5%. The golden cross we have been pointing out for weeks is well in place. Last time a similar cross occurred, the 10 year gained some 125 bps over a few months. We are up around 70 bps since the latest Golden Cross kicked in.
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PRIMARY DEALER BALANCE SHEETS
02-20-25
Primary Dealers must backstop Treasury auctions. The inventory of USTs on their balance sheets had been building as the inverted yield curve made US government bonds less attractive for carry traders. But that inventory has kept rising both in asset terms (chart right) and outright, hitting new records — even as the curve has dis-inverted. The zeal for Treasuries is waning!
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PRIMARY DEALER BALANCE SHEETS
02-20-25
The tranche of securities accumulated on dealer balance sheets – the bulk of which are Treasuries – has risen to all-time highs in outright terms and relative to the financial assets they hold.
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TNX - 10Y UST - 02-12-25
Higher for longer - Massive move higher in the 10 year. Haven't seen such a "clean" up candle in a while.
Note we are once again well above the 50 day. Upside resistance levels: 4.7% and then the big 4.8% level.
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***10Y-FED FUNDS RATE YIELD CURVE***
MATASII CHART NOTES:
- The Yield Curve has reverted and is now within the warning zone as marked by the red circle in the upper panel on the right.
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YIELD CURVE - 10Y-FED FUNDS RATE (FFR) | |
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TRUMP needs lower long term yields which means lower term premiums. Trump also wants to reduce the trade deficit through Tariffs. A reduced trade deficit can normally be expected to lead to higher yields as demand for dollar reserve assets will fall. (It already is falling, which is ultimately why gold is flooding out of London vaults and into Comex warehouses in the US.)
As a consequence this leaves a lot resting on DOGE to reduce fiscal excess - current Polymarket odds are 38% that more than $250 billion is saved in 2025. With spreads so tight, the risk-reward for even tighter ones is diminishing.
HIGH YIELD (HY) - JNK
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NEW-- CORRELATION - RATES v SPREAD
03-08-25
The rates/spread correlation has been firmly negative in recent months - 10-year US Treasury yields and HY index spreads (left panel); right panel shows the rolling 12-month correlation in month-over-month changes in IG and HY index and the 10-year yield.
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02-17-25
High-Yield (JNK) spreads are near the tightest they have ever been. That’s in contrast to measures of economic policy uncertainty, which are elevated and which spreads generally track.
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02-17-25
High Yield (JNK) Underperform whenTerm Premiums Fall. The debt of high-yield firms underperforms that of investment grade firms which – when HY spreads are already so tight – likely means they widen if term premium falls.
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THIS WEEK'S MARKET MONITOR | |
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