Having vigorously studied technical analysis, I have spent too many hours to count pouring over books, methodologies and techniques the the science/art.
After viewing Raoul Pal’s video on predicting the global economy on RealVision TV, I’ve decided to return to cycle analysis to combine my technical analysis skills with his economic framework.
Santa’s rally took another slap to the face yesterday with the SP&500 closing firmly beneath the 2018 low. Currently trading -9.2% lower amid its worst month since February, the odds of a turnaround look bleak to say the least.
We’ve been tracking the top of the S&P500 for a while and, whilst it currently lags the ferocity of the 1987 top, it is giving the 2007 and 2000 bears a ‘run for their money’. If this does turn out to be a mere correction, it’s certainly an unpleasant one, especially given the time of year.
- Strong rebound from UK construction (19.2pts MoM)
- Momentum for Euro Area ESI dips negative (YoY%) and composite suggests topping out
- But ESI remains above near-term trend (post 2010) and trend is rising. Also a solid recovery post-Brexit considering negative sentiment just after it.
- German construction at highest level on record at a mere 3pts (having spent 99.9% of its time in contraction)
- Finland ESI composite crosses above 100 and posts solid monthly gains on industrial and consumer confidence sub indices
The European Economic Sentiment Indicator is a broad measure for sentiment across the Euro Area and Union. It also includes sub-indices of confidence for industrial, services, consumer, retail trade and construction for Europe and each constituent member. I will be analysing it each month too assess the business cycles within Europe, with the goal of building a stock portfolio around it. Similarly, I’ll be using the ISM PMI reads for US to form my views on the US stock market and economy.
Having recently discovered and purchased AmiBroker software I am keen to learn how to code my own indicators, trading systems and filters. Part of my own personal development will benefit by logging and sharing my various experiments and code, with today’s post showcasing my first ever trade exploration.
My first exploration intends as a quick method of comparing performance and volatility of chosen markets, whilst also serving to suggest the trend as bullish or bearish, reflecting the direction as red or green on the exploration.