View from Toronto Video: 5 Key Questions for Global Traders

12/19/2017 4:04 pm EST

Focus: STRATEGIES

Ziad Jasani

Managing Director and Partner, Independent Investor Institute

If we see higher risk assets getting further overvalued into week’s end, we would suggest not to chase the move uniformly but selectively in sectors/spaces presenting with breakouts. More on global markets in two videos from Ziad Jasani of the Independent Investor Institute.

Watch my video strategy for the week, recorded Monday, Dec. 18:

video 1

Watch my video analytics session going into the  U.S. House vote on taxes recorded Tuesday, Dec. 19:

video 2

chart 1
Here are two of the high-probability scenarios.

We start this week with five  key questions:

1. Will global equity markets breakout from normal bounds (i.e. uptrend channels starting Nov. 2016)?

2. Will Trump have enough votes for tax reform to move forward without Sen. John McCain’s participation?

3. If the tax reform vote this week is Yes, will the USD breakout? And what will that do to commodities, commodity-laden equity markets and net debtors of USD-denominated debt (EEM)?

4. Does Oil have enough demand growth acceleration to breakout above $58?

5. Is our Trader community willing to put long-term capital to work if the S&P 500 can sustain above 2,680 and the TSX above 16,000 this week?

chart 2

Global Risk Sentiment

Long-Term (1st column chart above) Equities & Bonds present as expensive, driven by nearly a decade of money printing and market stimulation by central banks.

Short-To-Mid-Term (3rd column) Defensive Asset Classes (below the S&P 500 Line) present as relatively cheaper. Higher Risk Asset Classes (above the S&P 500 line) present largely as scattered.

Areas of opportunity short-term are the Eurozone Financials (EUFN), EFEA (EFA), Euro Stoxx 50 (FEZ), EEM and the Nasdaq (QQQ).

Most Defensive areas present with opportunity: PFF, LQD, CPD-T while equities are holding the highs; and TLT, XBB-T, FXY and GLD/SLV in the event of equities turning down.

Overall configuration of the Global Risk-Ladder is tilted to riskoff; where the S&P 500 presents a swing-high formation under 2,680 into week’s end we would look to close short-term positions.

And if we see higher risk assets getting further overvalued into week’s end, we would suggest not to chase the move uniformly but selectively in sectors/spaces presenting with breakouts that will be identified during our live sessions.

View the Independent Investor Institute trading ideas and strategies videos here.

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