The latest picture for 4-way pro-risk:
If a trend change occurred in late April then commodities and Euro-USD have yet to meaningfully participate. Stocks and bond yields however, have been strong.
The sharp rise in treasury bond yields continues to be reflected in German bunds and UK gilts, and the rush for the exits in bonds has been at its greatest in Japan:
Here is the Japanese Nikkei monthly – an amazing six months:
Gold so far is progressing like the Nasdaq correction which I drew attention to HERE. I am looking for a higher low than in mid-April, or a lower low on positive divergence.
Crude oil is still in is large triangle, failing again at resistance:
This chart suggests that an upturn in G10 economic surprises is required to shift outperformance away from defensives to cyclicals, which would include energy:
Leading indicators also look supportive for this to occur as they remain overall positive. The latest Conference Board data revealed +0.4 for the UK, +1.2 for Korea and +2.1 for Japan. The latest OECD leading indicator picture is very healthy:
My overall projections remain the same. A mid-year topping process for equities and rotation into commodities. Leading indicators are showing sufficient health for this to occur, and narrow money predicts emerging market outperformance going forward, which would tie in with increased strength in commodities. I am looking to see a gold bottoming formation, and an eventual break upwards in oil, as supporting developments. The sharp rise in bond yields bodes well for my overall scenario as that was a missing piece of the puzzle, and should be accompanied by a rise in money velocity. Geomagnetism has flattened out, but by seasonality there should be improvement into June/July before a trend change donwards into the Fall. Daily sunspots currently remain close to the record so far for this solar cycle – strength that looks more promising for a solar cycle maximum ahead in the Fall.