Sunday, July 3, 2016

Market price signals - Long-term bond trends strengthen

Managed futures trend-following was winner in June for have large bond exposures. The trends have been strong, unambiguous, and showing no signs of decelerating. A review of trends across all major market sectors shows strong up moves across many markets. We use a combination of three moving averages )short/intermediate/long-term) to determine the sector direction.

Stock indices are mixed but last week's trend are pointing to an up trend; nevertheless, long-term trends are flat. Bonds and rates are showing strong rallies around the globe. Precious metals are moving higher as well as base metals which seems surprising given the bond moves. Energies are mixed with the exception of natural gas and commodities are headed lower except for those markets whose supply if focused on Brazil. 

Given the strong performance in June and the clear potential for the continuation of trends, there is the opportunity for further gains from trend-following. 

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