Macro Digest: Holiday is over - new asset allocation signals

I took a "holiday" in my asset allocation back in May but now my models are starting up again….

 

 

 

 

http://www.bloomberg.com/news/articles/2015-03-31/sell-your-equities-and-take-six-months-off-says-saxo-economist

 

This morning I'm getting one major signal and one small signal..

 

The big signal is ALERT on DAX futures – where we are getting close to the pain-threshold for investors  - a close below 10.668 (vs. 10.746) would be valid SHORT position open….and make me VERY defensive on stocks (only keeping core positions)

 

 

 

It would also confirm trend from the China devaluation – Below is the net change since China devalued 8 days ago:

 

 

Big losers remain: Global growth, inflation and export companies & countries – Winner increasingly GOLD…..

 

 

 

On Gold the major signal remains @ 1201.00 but using a short-model 1130 break is a long (defensive) with stop below 1085 on daily close.

 

I'm personally buying GLD to my long-term Asset allocation model – targeting 20% allocation but buying 10% on 1130 break……

 

The market dictates what will happen not "believes" – too few people "gets" how big China new FX regime is and how it changes the monetary cycle and recycling away from US and fixed income……

 

Further note:

 

·        China devaluation + 8 days

·        Fed hike: -29 days away….. (48% probability this morning)……

·        US$ is now 3 days into new "weaker" cycle (using historic average of 33 days lead on peak of US$ before Fed hike)

 

And for full service: ;-)

 

·        Shemitah: -25 days away http://www.pray4zion.org/thecomingshemitahjubileeyear57745.html))

 

 

 

It's time to play defense, but let me market gives you direction.

 

The next moves could very well be:

 

DAX breaking down (biggest risk-off signal for Europe)

Gold establishing firm low into Fed hike (or not hike)…..Still my favorite asset for H2

US$ peaking…starting multi-year weakness on cyclical and structural changes to commercial and monetary flow…

 

Full Steen's Chronicle tomorrow with asset allocation, probabilities and new long-term macro outlook…

 

Safe travels,

 

Steen

 

 

 

Steen

 

 

 

 

 

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

Research: http://www.tradingfloor.com/traders/steen-jakobsen

Please visit our website at www.saxobank.com

 

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