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Stocks and indices quarterly update end Q1 2017

Stock indices update for Q1 2017. 1) Relative strength and performance between major Western and Asian indices. 2) Straits Times Index constituents ‘winners and losers’. 3) Quick look at diverging behaviour between correlated China A50 and AUDUSD to exceeding PMI data. 4) US sector performance.

Quarterly updates ‘STI component stocks: winners and losers end xx xxxx‘ which I have done faithfully over 2 years will be bundled here’.

 

Relative performance of major stock indices end Q1 2017

This is an overlay of chosen stock indices with duration from beginning of 2017 to end of first quarter too see their relative performance. This is how you can do an overlay of your own theme to inspect relative strength, relative performance using Tradingview‘s free platform.

I use the CFD feeds available in Tradingview. There are multiple choices available but I choose the ones from Oanda. You can choose available feed from any broker but for comparison sake, it is best to have all indices from a same feed so that we can have an apple to apple comparison.

Overlay of major stock indices to reveal relative strength, relative performance for Q1 2017

Overlay of major stock indices to reveal relative strength, relative performance for Q1 2017

The indices here are:

  • Nasdaq100
  • SG30 (SiMSCI, Singapore index futures)
  • Dax30
  • Dow30
  • China50 (China A50)
  • UK100 (FTSE 100)
  • JP225 (Nikkei 225)

I follow the buy strong sell weak principle – the strongest index here is Nasdaq100 and the weakest JP225. Index bulls and bears should be able to make a personalised choice. In a relative strength overlay such as this, I would zoom in to the two ends regardless of whether I am looking for outperformance or diversification – no point to deal with any cluster in the centre.

Note: After re-reading the whole thing before publishing, I realise that for whatever reason, the Hang Seng Index which I follow very closely is not featured here. I don’t want to redo the chart but for Q1 2017, HSI or HK33USD based on Oanda feed returned 9.5%. This performance places Hang Seng at the top slightly under SiMSCI in third place. Also if you notice my labelling inconsistent, it is. I am putting down very quickly, things that come spontaneously to my mind.

 

‘Weak’ Nikkei 225 slight loss for the quarter

Weakness is relative – when making comparisons I follow the guide of ‘between and within’. Following two very bullish quarters in Q3 and Q4 of 2016, I look at Nikkei 225 as weak when compared to other indices, and duration over the past quarter.

Visibly Nikkei 225 is the worst performer compared to other indices but over the quarter, it managed to close as the only stock index in the loss. FTSE 100 which is the next worst performer returned a positive gain of nearly 3%.

Jp225 (Nikkei 225 CFD, Oanda feed) daily chart, Sep 2016 to present

Jp225 (Nikkei 225 CFD, Oanda feed) daily chart, Sep 2016 to present

 

How two different markets read that China PMI beat

I have said many times to take news with a pinch of salt. One should neither be too bullish nor too bearish because apparently bullish/bearish depends on who you read from/talk to. Because GOSH headlines can be misleading – see my ‘proof’ here.

So last week China announced a ‘PMI beat, fastest in 5 years‘ data but in turns out that in my corner of the universe, China A50 is cheering but AUDUSD which usually has a favourable response to good Chinese news went the other way.

AUDUSD and China A50 diverge

AUDUSD and China A50 diverge

Throw that into the basket of recent divergences we saw. This divergence is of interest because I have a more bearish than bullish forecast of China A50 right here.

Need to watch for a head fake.

 

But why watch AUDUSD for China A50 movement?

Strong positive correlation. AUDUSD has strong positive correlation with China A50. Take your pick.

  1. AUDUSD is a leading indicator of China A50
  2. AUDUSD is a faith sidekick of China A50 and goes wherever the latter goes
  3. This is a coincidence, there is some other driver for each movement
AUDUSD, China A50 overlay showing strong positive correlation

AUDUSD, China A50 overlay showing strong positive correlation

Note also the number of times I brought up AUDJPY correlation to Asian Indices. AUDJPY is also down today and last Friday.

 

STI component stocks: winners and losers end Q1 2017

There are no changes to constituents of the Straits Times Index this quarter.

  1. Straits Times Index is up 10.22% for first quarter 2017.
  2. Among index constituents, there are 27 winners out of 30 stocks up for the quarter.
  3. 3 stocks end in the red.
  4. Gain leaders are Yangzijiang (B56.SI), Global Logistic (MC0.SI) and City Dev (C09.SI).
  5. Loss leaders are Golden Agri (E5H.SI), Hutchison Port (NS8U.SI) and Wilmar (F34.SI).
  6. Q4 2016 winners and losers here.
  7. It may be interesting to note that based on full year performance in 2016, Yangzijiang was the full year loss leader while Golden Agri was the gain leader. Retracement, change of fortune or a simple case of take-profit-rotation-play you decide for yourself.
Straits Times Index constituents 'Winners and Losers' for Q1 2017

Straits Times Index constituents ‘Winners and Losers’ for Q1 2017

Note: I have taken all effort to check accuracy of data in this table. If you spot a mistake, please give feedback. In any case, this is indicative. I am sharing information I am using myself but it is not personalised to any individual reader. My data from Datafolio.

 

Which US stock sector is the strongest / weakest?

Captured from SectorSelect.

Best performing sector is Technology. Worst sector Energy.

US stock sectors 3M performance (Q1 2017)

US stock sectors 3M performance (Q1 2017)

Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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