EFS-Hedging and risk seeking coexist, with gold and US stocks rising together

The current market has become more and more chaotic since the two huge black swan events, the British withdrawal from Europe and Hillary Clinton's defeat last year, have been seriously disrupted. As Trump is currently in power, the major traders can only look around every day. In traditional market logic, when the market is chasing relatively high-risk assets, it is generally averse to safe haven assets. At a time when the US stock market, the world's largest benchmark stock market, is rising to new highs,goldAs a traditional safe haven asset, it is despised by everyone. But in today's trading market, you can easily see the simultaneous rise of US stocks and gold. As an analyst, I am unable to provide a perfect explanation. It can only be barely explained that the current market divergence is very large, and the correlation between various assets that existed before is of course non-existent. So it is a perfect opportunity to see that after the US stock market stubbornly hit new historical highs, gold is also firmly rising. You inflate yours, I inflate mine, forcing empty heads to have nowhere to hide.

According to Morgan Stanley's tracking of the performance of different assets in different regions, the correlation between current assets has dropped to2002The lowest level in years. In normal times, there is a negative correlation between stock prices and bond prices, and a negative correlation between safe haven assets and risk assets, which has always been a rule followed by the market. stay2016In, due to widespread market expectations of sustained weak economic growth and prolonged fiscal stimulus from global central banks, asset correlation gradually approached historical highs. Previously, the uncertainty of economic prospects dominated the trend of various assets, but now it is the uncertainty of political prospects that dominates the chaotic market today.

The noise in the market has long shifted from the Federal Reserve's interest rate hikes to the Trump administration, and now to the issue of elections in the eurozone countries. Although the probability of Le Pen winning the French general election is relatively low according to current public opinion polls, who would still believe the poll after experiencing two major events, namely Brexit and Trump's inauguration, and two consecutive painful slaps in the face? Although the economy of the euro area is accelerating its recovery, such an uncertain political election has previously related to the stability of the euro area and whether the euro can continue to exist. Traders are no longer calm and confident. The latest data shows that the German French debt interest margin has reached a recent high.

The euro managed to endure the day when the US dollar was weakened, but despite the internal turmoil, it finally did not rebound on a large scale. If the political risks of elections in France and Germany are lifted, then the euro will have a beautiful tomorrow. Although the UK has successfully withdrawn from the EU, Prime Minister Theresa May has agreed to Scotland holding a new round of independence referendum. Scotland's yearning for the EU has shown traders that humanity is still yearning for the beauty of unity, but the prospects for the pound are once again bleak.

This Tuesday, the US whistleblower king Trump will give his first State of the Union address to Congress. He may have just announced some details about infrastructure and tax reform, but last week, US Treasury Secretary Nuchin publicly hinted that he cannot provide specific details at the moment and will address them in the8Passed before the adjournment of the monthly parliament. However, Trump claims that he has done a lot of things in his first month in office, to see if he can be angry with Congress. The main impact on the market is to weaken the US dollar. In addition, it is also evident that this week has been a very data intensive week for manufacturing industries in various countriesPMIAnd the latest monthly inflation data, the United States ranked4quarterGDPThe correction value also needs to be given special attention.

Technical deconstruction--See the following analysis:

S&P500 Weekly chart

S&P500Closing at a high bullish candlestick, the dynamic moving average shows a bullish pattern continuing, with resistance positions clearly visible above at a percentage point161.8Reverse expansion position of2430Nearby. Although it is still possible to go long, the risk of entering the market at a high level is relatively high, so try to participate in short-term trading within the day. This week's focus is on2355Position, participate in long positions without breaking through light positions, and control risks with fixed stop losses.

Spot Gold Weekly Chart

　        
Gold broke through last Thursday1244After resistance from nearby high points, it remains strong with a weekly bullish pattern. There is still considerable upward space in the future, indicating thatVThe pattern of pattern reversal is clear, and the target above is1280-1300If we can provide a retest this week1245The opportunity is to lay out multiple entry orders.

crude oil Daily chart

After breaking through the upward trend of crude oil last week, there was no accelerated upward trend, making the entire situation very awkward and not retreating to the clear bearish pattern on the daily chart. Last Friday, it was suggested to54.5The position has been short entered, and currently short positions can continue to be held. Short sellers can try to54.2Layout empty orders for entry, breaking through high points54.8Stop loss exit,51Stop surplus.

EFS  R&D Department
Zhang Yuanyuan