The GMI Top 5 Charts That Make You Go Hmmm...
In this week’s newsletter, we’re going to again focus on a few DeMark charts...
As mentioned last week, we find DeMark incredibly useful to contextualise trends and turning points.
As ever, much fuller and more in-depth analysis can be found in Global Macro Investor (www.globalmacroinvestor.com) and Real Vision Pro Macro https://www.realvision.com/pricing) . Global Macro Investor is our full institutional research service and Real Vision Pro Macro is the sophisticated retail investor service, which is co-authored with leading research firm MI2 Partners.
There’s a lot going on right now, so let’s dive right in...
GMI Chart 1 – DXY
DXY triggered a daily Sequential sell Countdown 13 last Thursday, which resulted in a big drop last Friday with prices continuing to work lower throughout this week and breaking key support levels.
The weekly chart also shows a 9/13/9, something we’ve previously highlighted, which again increases the odds of further downside as peak hawkishness begins to get priced in; we don’t think this is the end of the long-term dollar uptrend but a potentially significant correction...
GMI Chart 2 – EEM
Emerging Market equities continue to trade well on the back of dollar weakness and appear to be breaking out from the year-to-date downtrend. There is a 9 daily sell Setup in place, so we need to see how things develop next week to confirm the breakout, but so far so good and...
... EVERYONE is super bearish!!! Institutional sentiment is at its lowest level since January 2016...
GMI Chart 3 – Gold
Gold is another asset that has benefited from the recent bout of dollar weakness, currently in wave 3 of 5 higher and closing in on the wave 3 price objective of 1790.
GMI Chart 4 – DAX
The DAX has triggered a cluster of 13s this week and looks due for a pause soon and, with an RSI of 79 it’s the most overbought since April 2021!!! Watch this one closely...
GMI Chart 5 – US 2-Year Bond Yields
Lastly, 2-Year Bond Yields put in a new monthly Aggressive Sequential, Combo and Sequential Countdown 13. We think that this is what the dollar is sussing out – peak hawkishness...
The 13s don’t always nail the turn in rates down to the month but we’re getting very, very close...
The GMI Big Picture
As you can see the dollar is the key to EVERYTHING right now... get the dollar right and the rest of your asset allocation will fall into place. Short and sweet from us this week but a lot to think about...
Stay tuned and see you all next week with another update. Have an excellent rest of your weekend.
Enjoy!
Raoul Pal – CEO, Founder - Global Macro Investor
Julien Bittel – Head of Macro Research - Global Macro Investor