Posts from ‘July, 2009’

We have been bullish on the equity market since November last year and were quietly buying into the many days of weakness that followed the late November low. We were more or less fully invested by late February. Of course since mid March it has been a rather one way street. There has been so [...]

It seemed as if the sky was about to fall yesterday with news that Beijing will push banks to restrict their lending. Local media reported that the country’s two biggest banks had decided themselves to put a lid on their 2009 lending targets in a move that would significantly slow overall Chinese credit growth [...]

Small cap equities are one of our favourite trading instruments and indicators of the health (or lack thereof) of the equity market in general. Small caps are up there with our favourites because they tend to trend much more than large cap indices making them a trend trader’s dream. Even just five years ago it [...]

Follow the lead set by emerging market currencies. The flow into and out of emerging market currencies tells you so much about the mood of world financial markets as a whole. This is based on experience in trading emerging market currencies and bonds for over 15 years. We have noticed that a number of emerging [...]

Last week we highlighted the rapidly improving technical behaviour of coal stocks (click here for the article). It seems now we have at least some confirmation of an improving fundamental outlook. Rail car counts have begun to show signs at least of improving. The Association of American Railroads (AAC) releases a monthly report detailing rail [...]

Everyone focuses on the performance of stocks that met or exceeded earnings estimates, but few focus on what happens to stocks after they missed earnings “estimates” last quarter. The later tells you the real mood of the market. If stocks that recently missed their estimates move above levels at which they were when the earnings [...]

Junk bond markets are confirming the behavior of equity markets. We monitor the behavior of junk bond markets because they say a lot about the mood of financial markets. In fact we would go so far as to say that the junk bond market tells us all we need to know about what is happening [...]

Inflation is characterized by rising commodity prices. But what commodity index should we use? There are essentially five broad based commodity indices. There is the CRB, Goldman Sachs, Rogers, DJ-AIG, and the UBS Bloomberg CMCI. They all vary in appearance essentially because of their weightings to different commodity groups. But they are all very similar [...]

There has been relatively little discussion as of late on utility stocks. They appear to be the forgotten sector with comparably more attention given to the “USD hedge” sectors such as energy, materials and emerging markets. However, we would like to draw your attention to the utility sector because of the attractive fundamental valuations and [...]

There has been an abundance of commentary around Bernanke’s “green shoots” comment some weeks ago. Some economists have embraced what Bernanke said yet others are claiming that the green shoots are no more than perennial weeds! So fact or fiction – is there really “green shoots” or is the world continuing to fall into the [...]