Episode Summary
In this episode of Fill the Gap: The Official Podcast of the CMT Association, we welcome Laurence Balanco, CMT.
Laurence Balanco, CMT is a Technical Analyst at CLSA Australia Pty Ltd. Lawrence has a broad array of knowledge of all the different markets, and a real unique perspective about pulling all these different markets together. Back in the day he was very a very heavy user of Elliott Wave. Technicians that can do it well can do it well, and he’s definitely one of them. In our time with him during this interview, we covered basically every market on the planet.
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Special Guest
Episode Transcript
David Lundgren, CMT CFA 0:10
OK.
Welcome to fill the gap, the official podcast of the CMT Association.
My name is Dave Lundgren and along with my good friend Tyler Wood, who’s a fellow CMT Charterholder, and the executive director of the CMT Association, we are joined today by Lawrence Blanco.
Also Acmt Lawrence is chief technical analyst over at CLSA in Sydney, Australia. Now I’ve known Lawrence since my Wellington days and I’ve and I always look forward to our discussion since his perspective was always so, you know, global in nature and across all asset classes, and he was.
One of the best that I that I followed in terms of Elliott Wave and in recent years Lawrence has adopted his process to reflect more of the work of Hank prudent, which is really quite interesting.
I’m really looking forward to having that discussion with him today.
So without further ado, Lawrence, welcome to fill a gap.
Laurence Balanco, CLSA 1:03
Great. Thanks for the invite.
Looking forward to the conversation.
David Lundgren, CMT CFA 1:07
Yeah, for sure.
Tyler Wood 1:07
Great to see you, bud.
David Lundgren, CMT CFA 1:07
It’s great to see you.
I I always.
I’ve always enjoyed speaking with you just to hear your accent.
Laurence Balanco, CLSA 1:13
Yeah, it’s been a bit butchered sort of starting in South Africa, traveling around the world and now sitting in Australia, there’s some phrases I can’t get away from. The South African accent, and I have to repeat myself three times, but that’s part and parcel, right?
Tyler Wood 1:26
Yeah.
David Lundgren, CMT CFA 1:27
Yeah, right.
Well, if I didn’t understand you, I’ll ask you to repeat, but I think we’ll be good.
Laurence Balanco, CLSA 1:32
Well, just bring up the chart, right?
David Lundgren, CMT CFA 1:32
So yeah, exactly right.
Laurence Balanco, CLSA 1:33
Speaks 1000 words.
Tyler Wood 1:34
That’s right.
David Lundgren, CMT CFA 1:35
Yeah, that’s it’s a common language, right?
Laurence Balanco, CLSA 1:37
Yeah.
David Lundgren, CMT CFA 1:38
So we have. I mean there’s just a ton happening to start the year here in 2025, not just in equities and within equities, but across asset classes, FX and the whole shebang.
And I know you cover, you follow all of that stuff very closely, so it should be a really informative conversation for our listeners.
But before we really dig into that, maybe tell our listeners a little bit about yourself, how you got into technicals, a little bit of your journey as a technician through your career.
Laurence Balanco, CLSA 2:07
Yeah. I mean, it’s really sort of started, you know, went went through school, got sort of interested in markets sort of late in high school and then through my first few years of university, my father-in-law was invested in equity markets and sort of started look around had some.
Savings and and you know really just sort of bought the the narrative stories that were going out at that time.
It was obviously the TMT move. So basically finished school in.
93 and it was, yeah, Dean University in the mid 90s.
So basically the the the start and mid part of that sort of tech cycle. So it was really just sort of those headline moves.
It was was a bull market at at that time, so once I finished my degree, I actually joined SOPTON on on the trading desk.
David Lundgren, CMT CFA 2:53
Oh yeah, yeah.
Laurence Balanco, CLSA 2:53
So. So that was my first sort of luckily to get the role in the grad program at such Gen. and started on the on the sales trading desk. And there was actually.
Sock chain, or Society General, had a technician in sitting in Hong Kong named Thomas Schroeder.
I don’t know if you ever came across his work.
David Lundgren, CMT CFA 3:12
No.
Laurence Balanco, CLSA 3:13
And basically started following him as like never looked at technicals in your degree.
You never sort of touched that majored in economics and accounting, so he never really sort of looked at charts as far as one way to look at markets.
And then we basically got the EM prices of 98 that then rolled into that acceleration phase in, in the tech bull market into the 2000 hearts and having left university, you sort of come up with this theory on how you should value companies you have the.
Formula. This is what market should trade at.
This is the value and basically 298 two to 2000. It was literally swings up and down and nothing ever traded at what you calculated fair value at. And you also had towards the end of that sort of 2000 is you know all the list.
That were coming out and sort of people just saying follow me. Don’t worry about looking at fundamentals or charts.
It’s it’s all about, but the sort of tech craze that went on and and then sort of markets rolled over and basically Thomas Schroda out of software and sort of called these turning points extremely well.
His focus was really on RSR divergences and Mac D divergences.
David Lundgren, CMT CFA 4:20
Yeah.
Laurence Balanco, CLSA 4:20
So. So that was, you know, really that slowing momentum signal of of a trend giving you that early warning signal, which really sort of resonated with the market turns and the volatility that we saw at the time.
Tyler Wood 4:20
Hmm.
Laurence Balanco, CLSA 4:33
So having seen that, you know I did a bit of research myself, read a few books. The first book that I got is the John Murphy’s visual investor.
So it’s his smallest book out there and I always recommend anybody that’s wanting to start to start with the basics and the easy. And I thought in that book the visual investor, John Murphy touched on, you know, the the basic concepts and some of the basic indicators which.
David Lundgren, CMT CFA 4:42
Yeah, yeah.
Laurence Balanco, CLSA 4:58
Sort of frames it quite well if you’re just starting to.
Use technicals or trying to understand technicals.
I thought so.
I still recommend the book. He’s got a revised version out there.
Very basic book to to go through. You can go through over the weekend and so that was my first book and then sort of finally got onto the CMT and and ran through that course. And my sort of career developed through through SOPTION at the time kind of.
Portfolio manager.
So then used again, technicals been on the sell side, you sort of just rot ideas or trying to pitch investment ideas, so you have a bit of the fundamental background of of a stock or whatever and then you have the technical overlay on that sort of just trying.
David Lundgren, CMT CFA 5:33
Yeah.
Laurence Balanco, CLSA 5:39
To highlight it from different angles at you know the stars are aligning with these kind of things, but when you go to the bar side.
The the way that you use technicals I think does evolve with managing money.
So there’s different pressures on being on the sell side that it’s just easier generation. And once the idea is out, you sort of move on on the bar side. Once you’ve executed the deal, you sort of you’re now watching it, you’re married to it, you’ve got to look.
David Lundgren, CMT CFA 6:01
Stuck with it.
Laurence Balanco, CLSA 6:03
After it.
And and you know, I suppose, looking at a chart too, you can always sort of jump at shadows, right? That does this look like a reversal?
David Lundgren, CMT CFA 6:10
Yeah, yeah.
Laurence Balanco, CLSA 6:11
Like how many data points do you want to follow? The 60 minute charts? Anyway, on the bar side, I felt looking at weekly charts just took you away from some of the daily volatility and it also kept you because basically staying on the trend for as long as.
You can is really where you make the money, right?
So calling the inflection points is great but.
Lower hit rate. Right. Right. Staying on that trend for as long as you can. And so just taking a step back on time frame on the bar side and when I speak to a lot of the P Ms. you know a lot of times I say let’s look.
Tyler Wood 6:33
Yeah.
Laurence Balanco, CLSA 6:43
At the weekly chart just takes away some of the noise that we may be seeing on the daily chart.
Obviously, the hedge fund community, you know, different story, different risk measurements where you can even go down to 60 minute charts, become more relevant for them, right.
So it does vary through the time cycles that you work through.
Tyler Wood 6:58
OK.
Laurence Balanco, CLSA 7:01
So yeah, that was my experience gained from using technicals on the sell side to using it on the bar side. I’ll end up working in Dubai for an asset manager there.
So again, sticking with the longer term weekly charts.
And a process.
Incorporating, you know, the Dubai experience was quite interesting because it was more of value orientated.
Asset manager, which also became you had to use different indicators.
David Lundgren, CMT CFA 7:27
Hmm.
Tyler Wood 7:27
Mm hmm.
Laurence Balanco, CLSA 7:33
Most value fund managers that you set in front of want to be buying things that are falling because that’s where the values created. Rather than buying things that are already trending right.
Tyler Wood 7:36
Mm hmm.
Laurence Balanco, CLSA 7:40
So you have I had to sort of adopt the the the change there and that’s where Thomas Schroeder’s work sort of came back in vogue. Looking at you know slowing downside momentum to try and highlight the inflection points. So one trying to avoid the value trap where.
You still in a strong momentum to the downside.
And you know, look for those potential turning points.
And yeah, that’s in Dubai.
And then send us A was a broker that I used to speak to dominated out of the Asian region that the fund that I worked for, you know, predominantly looked at emerging markets as well as Japan on the on the developed market side and their technician at the.
Time Chris Roberts had resigned and he moved on to the hedge fund side and sort of got the opportunity to join CLSA back in 2007. And you know, that’s been my home since then.
David Lundgren, CMT CFA 8:29
Hmm.
Laurence Balanco, CLSA 8:30
Speaking to to various clients and as I mentioned to you and Tyler earlier earlier on, it was, you know, my start of my career was the end of Aus dominant theme tech game. And then you had the rotation into emerging markets, had a decade of emerging markets perform.
That peaked in 2010 and you know, the last 15 years it’s been again a tech and US dominant theme, so.
You know, does it swing back to emerging markets at some stage?
You know that that that’s the sort of interesting question, particularly with the price action that we’ve seen year to date.
Tyler Wood 9:01
Hmm.
David Lundgren, CMT CFA 9:01
Yeah, I think that’s that’s definitely much of what we want to talk about in this conversation in terms of how you’re seeing things evolving, because I think that there’s potential for a lot of change coming up. But before we really dive into your your views overall, maybe you.
Can touch a little bit on your process as it stands today.
So I my in our in our meetings in the past, Lawrence, when we when you used to come visit at Wellington, we would you, you would walk through your chart books and you you know your your perspective was definitely of course across asset classes and time frames and.
Things like that.
But it was very heavily influenced by Elliott Wave, which is why I’m pretty bad at that form of analysis to be honest.
But I knew that it was for those that were good at it.
They could add a lot of value, so that’s why I always really appreciated our conversation.
So I’m curious how that that that approach has evolved and if it’s evolved at all, you know, what was the catalyst for the for the change?
Laurence Balanco, CLSA 9:56
Yeah, absolutely.
David Lundgren, CMT CFA 10:09
Yeah, level, yeah.
Laurence Balanco, CLSA 10:10
Through and I literally started reading it and I put it in the dustbin right.
But I’d like it doesn’t make sense to me that. Well, that was my first experience with it.
David Lundgren, CMT CFA 10:19
It.
Laurence Balanco, CLSA 10:20
I then picked it up again and said having looked at it more from sort of a live market action, I can sort of get get the ideas and then I sort of broke it down into.
David Lundgren, CMT CFA 10:20
Wow.
Laurence Balanco, CLSA 10:31
You know the very basics of it is a definition of a trend that wave 2 cannot retrace. Wave one.
So therefore you wouldn’t have a higher high and a higher low and 23 can’t be the shortest and way 4 can’t retrace into wave one.
David Lundgren, CMT CFA 10:40
Yeah.
Laurence Balanco, CLSA 10:44
So essentially you just created the definition of a trend not having overlapping highs or lows, and that anything else in between is some kind of corrector phase which 13 corrector phases. But you can have combinations of those corrector phases.
And Chris Roberts, who was Cnsa’s technician, had focused a lot of edit waves. A lot of the clients were sort of used to that work. And one of the benefits from Elliot, particularly when you go to the sell side, you know, everybody’s looking for a pred.
Or an expectation or a price target, right?
Or that’s that have been my experiences.
So what do you think?
David Lundgren, CMT CFA 11:21
Hmm yeah.
Laurence Balanco, CLSA 11:22
How high can this trade?
What’s my risk levels?
And that’s why Elliot Wave provided two of those things.
It provided where the counts are wrong, so if you’ve got an overlapping move in a trend, it’s like OK.
We got to reassess here because you got the overlap.
You know this impulsive counts gets invalidated, right?
David Lundgren, CMT CFA 11:40
So. So on that, you mean like?
Laurence Balanco, CLSA 11:40
And then the other side of it.
David Lundgren, CMT CFA 11:41
If so, you mean like if you have a view on something?
Then you’re not necessarily waiting for a price. Stop. You’re waiting for a structural stop.
So like if you think it’s heading to, say 25, whatever it is we’re talking about the the swing low might be down at 17, but the the structure that would support a move to 25 might be broken at 21. So you’d be actually stopped out.
Laurence Balanco, CLSA 11:53
Yep.
David Lundgren, CMT CFA 12:04
Of that trade, because of structure, not necessarily because of the level.
Laurence Balanco, CLSA 12:07
Yes, correct. Correct.
David Lundgren, CMT CFA 12:08
Yeah.
Laurence Balanco, CLSA 12:09
So like if you’re using a training stop of a 200 day or you know a parabolic.
Stop level or just an ATR level in in the elliptic, you’d use the price structure of the train essentially.
David Lundgren, CMT CFA 12:22
Yeah, yeah, yeah.
Laurence Balanco, CLSA 12:23
And then obviously again we not that it’s used or has strong evidence of great sort of forecasting. It gives you a potential upside target you know is it the same measured move wave 3 can’t be the shortest. So therefore you’ve got the first move you’re looking for at.
Least 100% or the equivalent size move and a potential Fibonacci extension to that.
So you can always provide risk reward luck.
This is my pivot point. If I’m wrong and this is the potential upside.
David Lundgren, CMT CFA 12:49
Yep. Perfect.
Laurence Balanco, CLSA 12:50
And that’s what sort of got me on to just getting more proficient in the inlet wave count, I mean.
As as you spend more time sitting in front of clients, there are the clients that lock that kind of detail analysis and happy to run with the elite wave side. But the more broader audiences like actually I don’t know where you start these counts, right? This is very.
Subjective. Can you back test it?
And I guess over time, you know, the processing power, even on Bloomberg, the back testing function has improved significantly.
So there’s more sort of reliance on the statistical evidence of trends. So you know, as as my time sitting in front of P, Ms. of value growth orientated funds.
And just trying to communicate you know how you can use technicals in the process, because I think that’s the important thing.
It’s a tool that investors can use in the process.
And it’s a really a discipline at the end of the day.
So how can I sort of provide them with the framework to to use that so I still use Elliott Wave in you know, the ideas of the impulsive moves in the strongest part of the trends. And that’s probably the key.
I don’t want you guys find, but I found that the the term overbought oversold is probably the most misleading term used because if you look at the RSI which a lot of people use as below, 30 above 70 is overbought oversold levels. The calculation is just average ADV.
Versus average the client and then you go back to all the academic papers written over the past 50 years in finance about momentum persist for a lot longer than people expect is. If I look at an RSI of 70 and Binet.
You know, that’s typically the click or phase or the confirmation phase that a trends developing rather than the place that you should be selling.
David Lundgren, CMT CFA 14:41
Yeah.
Laurence Balanco, CLSA 14:41
So I try and avoid the terms overboard over salt, and typically a 70 move I’d look if that’s in the structure of a wave three and then looking at any kind of pull backs as an opportunity to be buying into that. And one of the books that sort.
Of evolved, this process is is Professor Hank Putin, of which I was fortunate enough to meet before. He’s passing in in Tokyo. I think it was 2014. It was the CM TS Symposium in in Tokyo, and it’s definitely a book that sort of revolutionized sort.
Of my thinking, he talked a lot about S curves, which is sort of the adoption, particularly if you look at, let’s say, smartphone purchases that works in that S shape curve that, you know people buy into to get this acceleration phase and and then while the volume still.
Go up the rate of change slows.
And that always sort of came back to my first lessons in technicals from Thomas Schrader, the RSI divergences or the momentum divergences, and that highlighting the inflection points.
David Lundgren, CMT CFA 15:29
Mm hmm.
Yeah.
Laurence Balanco, CLSA 15:39
So yeah, in summary, Elite Wave was a key component, but then it’s involved more with the Hank pudding work of that behavioural bias of S shaped curves and working it back to the momentum calculations of a train basically.
So I’ve incorporated strong, trained strong momentum.
Basically you have to have a benefit of doubt to the upside.
Or the reverse. If it trends down strong momentum to the downside. You know you back the downtrend and then at the inflection points is where you start to see momentum slow and that’s where you got to manage risk is how I sort of highlight to to the CL.
David Lundgren, CMT CFA 16:04
Yeah.
Laurence Balanco, CLSA 16:17
That I speak to, and that’s where you want to either be taking profits or covering shorts essentially.
David Lundgren, CMT CFA 16:22
Yeah, yeah, I think again, because there’s many inflections taking place. We’ll probably see in our conversation.
We’ll probably hear your the the various inputs come to life as you’re describing what you’re thinking about markets for 25, but I’m curious.
When? When you, when you’re meeting with different managers, portfolio managers on the buy side, some of them are growth, some of them are are value oriented.
Laurence Balanco, CLSA 16:47
Yep.
David Lundgren, CMT CFA 16:49
And then you might even have different asset classes that some are equity, some are fixed income, some are commodity, right.
Laurence Balanco, CLSA 16:55
Yep.
David Lundgren, CMT CFA 16:55
How do you?
How do you change your your toolkit when you when you speak to different?
PMS is it?
Is it using the same tools differently or is it completely different tools for different PMS?
Laurence Balanco, CLSA 17:09
So so I think this is quite an important point.
Why try and sort of get this point across?
Particularly for people who haven’t looked at technicals before and sort of just trying to sort of scratch the surface is, you know, everybody has an or outbound that everybody has a slight biased in how they look at the investments either from that sort of value side that they.
Want to try and sort of be trading at the inflection points or on the way down or the growth guys that you know sort of buying the story that the narrative and the and the growth side of it and that’s typically a chart you know moving bottom left?
To top right.
And that’s how, if I very simplistically had to define, if I’m sitting in front of a value fund manager, I know the charts that he’s focused on or more charts that are falling. And let’s assume that he’s along only manager that are falling and he’s trying to find.
The inflection point where he should start to build the positioning. Assume he likes it from a fundamental side and the Growth fund managers I’m sitting in front of, you know, typically looking for a stock in in a trend and just picking the spots to buy into that Tre.
And that’s why.
I think we can share this sort of methodology or blueprint.
There’s a very basic schematic that I draw up.
It’s about having a trained the momentum of that train, so you can just use a simple moving average to find the trend and then you know I tend to use the RSR, but you can use stochastics or just simple rate of change. Trying to measure the rate of.
Change of that trend. So when I sit in front of a clients, I can highlight up here, this is a strong trending stock or this is a stock potentially inflection point that it is a bottom fishing bar and then obviously the reverse for a growth manager that, yes.
The stocks in an uptrend but not upside.
Momentum, so you should be a bit more patient waiting for a pull back within that.
So that’s my base methodology and I’ll overlay that on each asset class if somebody wants to talk about crypto currencies, I use that same framework. Now Asia’s quite interesting because the China market, particularly the mainland market which is dominated by retail investors.
David Lundgren, CMT CFA 18:53
Hmm.
Tyler Wood 18:54
Mm hmm.
Laurence Balanco, CLSA 19:02
The best way.
It’s been explained to me from from fund managers is that, you know, China tends to overreact in the near term where typically Western markets under react and that’s where those sort of trends are more sort of persistent and take longer to develop where China reacts sort of immedi.
You get this very short term spike and then it rolls over quickly.
So on the the China angle, what we found is the D mark indicators work extremely well.
That’s looking for inflection points. These accelerated moves really to manage the risk, but also.
To buy on the way down and to sell into these sort of big sparks on the upside.
So that’s the only market that I’d say I gravitated looking more towards a mean reversion structure then for the trending structure.
Tyler Wood 19:47
Mm hmm.
David Lundgren, CMT CFA 19:48
Oh, interesting.
Tyler Wood 19:50
So that the context of how the market behaves informs which tools you’re you’re leaning on to confirm whether it’s a healthy trend correction or signs of a more meaningful exhaustion and and reversal, right.
Laurence Balanco, CLSA 19:56
Yeah.
Yep, correct. Yep.
And that’s probably, you know, through my university degree, one of the subject you had to take in your your commerce degree was psychological. Other industrial psychology or psychology.
David Lundgren, CMT CFA 20:04
Yeah.
Laurence Balanco, CLSA 20:14
I took level one and just sort of that’s enough.
I’m just sticking to the to the equations in in economics and and accounting and the like, but if I sort of look back now in how much more from a technical side, it’s all a lot to do with sort of the behavioural side side of it probably would.
Have stepped more to some of the psychological aspects and the behaviours that you see from from markets now, so I think there’s a lot of overlap. One, when you’re looking at the charts, you know it’s a reflection of behaviour at the end of the day. So yeah, I.
Think that that’s an important part.
That’s probably overlooked a bit.
David Lundgren, CMT CFA 20:51
Yeah.
Tyler Wood 20:51
Do you also incorporate into market forces or cross asset relationships as context for using them? The more mechanical tools or do you steer clear of that and the rule is the rule?
Laurence Balanco, CLSA 21:03
So there’s I think it creates a bit of colour, but one of my sort of pet hates in a lot of conversations or or the what do you think about this correlation? So a lot of the time an investment thesis has started off with a correlation.
Tyler Wood 21:08
Mm hmm.
Yeah.
Laurence Balanco, CLSA 21:23
And from my experience, that correlations do us select and you can get totally mislead.
Tyler Wood 21:26
Yep.
Laurence Balanco, CLSA 21:30
At the bigger macro environment has actually changed and the reason why that correlation had existed, let’s say for three or five years is actually changing now.
And if you just looked at the chart in isolation, it’ll be suggesting that you’re getting a change here, but your reliance on the old correlation.
Tyler Wood 21:43
Yeah.
Laurence Balanco, CLSA 21:46
So I’ll try and respect the absolute chart set up and if you got a correlation that you can sort of add to the thesis, then great.
Tyler Wood 21:53
Perfect.
Laurence Balanco, CLSA 21:59
But I wouldn’t start, which it does seem a lot of the time the fundamental guys sort of have more of a correlation starting point then respecting the current process, almost like the the market’s wrong and it’s going to mean revert whereas you know, you could have a.
Tyler Wood 22:10
Yeah.
Laurence Balanco, CLSA 22:13
Change in the macro factors that it as well that correlation is breaking down and that breakdown in the correlation is actually where you can make a significant return as a breakdown and you get a new correlation beginning.
So probably the most recent example would be bond prices and equities from 2021 to basically 2023.
You know, so falling bond prices, rising yields, falling equities and basically from mid 23AR came along and it didn’t matter what bonds did and it was more the the rate of change of bonds that became an issue.
Tyler Wood 22:36
Yep, Yep.
Yep.
Laurence Balanco, CLSA 22:44
So bonds rose too quickly, then the equity market would correct.
So the behaviour and what the market focus on always evolves.
Tyler Wood 22:47
Correct.
There are a lot of macroeconomists looking at an inverted yield curve from 2 1/2 years ago and still waiting for that recession.
David Lundgren, CMT CFA 22:52
Yeah.
Laurence Balanco, CLSA 22:54
Yep.
Yeah, yeah.
Tyler Wood 22:59
Yeah, yeah, the the correlations change, right? As it’s about to.
David Lundgren, CMT CFA 23:00
Well, unfortunately they’re they’re giving up on the call for recession, right? Right at the moment with the market seems to be focusing on the prospect of recession.
Laurence Balanco, CLSA 23:07
Worried about it? Yep. Yep.
Tyler Wood 23:09
You just can’t win, right?
The market is here to beat us up.
David Lundgren, CMT CFA 23:11
No, you just can’t win.
Tyler Wood 23:12
All of us, yeah.
David Lundgren, CMT CFA 23:14
Yeah.
Laurence Balanco, CLSA 23:15
Fix the most pain, right?
David Lundgren, CMT CFA 23:16
Well, Lawrence, what do you what do you wanna dive in on markets here?
Tyler Wood 23:17
That’s right.
David Lundgren, CMT CFA 23:21
What? What?
You know, we got a lot to cover here for 2025 and I know you cover pretty much everything under the sun. So what?
What do you think is a good jumping off point for this conversation?
Laurence Balanco, CLSA 23:31
Well, I think there’s probably maybe just the first observation.
Is really where you know the question on rest of world outperforming and is this sustainable or?
Like Bob Farrell and and Frank Dixeira sort of said before that you typically need to see a market correction before you actually see the real change in leadership rot.
So you know it’s it’s really just been since December that you’ve seen some of the the out performance from rest of world and sort of share a screen or just a chart here is quite interesting. If I go back to the Trump election victory note on the 5th.
Of November, you know U.S. market Bitcoin sort of all outperform.
But if I look at year to date performance from the start of the year, you know Bitcoins now in negative territory. The S and PS in negative territory. And interestingly the tariff related.
Markets like Mexico, China, Europe and even Canada.
Canada’s flat for the year and it’s outperforming the SNP. Mexico’s positive emerging markets positive China is up, you know over 20% year to date.
Tyler Wood 24:33
Mm hmm.
Laurence Balanco, CLSA 24:42
So the tariff related markets haven’t sold off and it does seem to be that the market fear you know as we said, today’s is coming more from AUS growth fear and slowdown.
So that’s quite interesting, can it?
Can the rest of the world sustain if the US does slow down?
You know, such a big market for a lot of providers or exporters from Asia that the US slowdown is likely to have an impact on them too.
So do we have a correction led by the US here breaking below it’s 200 day, the rest of the world?
Correct. But in that correction, the rest of the world falls less and I think that’s where the information will be is that.
Let’s assume that the S&P downside momentum picks up with the break of the 200 day.
And in that correction, rest of World falls, but it falls less.
You know that that’s a sort of ingredients that you had in 2002 where the US still felt that the rest of the world felt less. And then once the US started to stabilize and recover, the rest of all sort of kicked off on a on.
A decade long pair of out performance.
Tyler Wood 25:51
Mm hmm.
Laurence Balanco, CLSA 25:52
So, and that’s the big question and my short answer is you know I don’t have the evidence that you have that major base in place.
David Lundgren, CMT CFA 25:52
All right, so.
Laurence Balanco, CLSA 25:59
I’ve been looking about the changing behaviour of rest of world falling less than the US and the second point that I’d highlight maybe just this is more short term orientated. If you look at the charts of MSCI World X US relative to the US, you know even this.
Distinct downtrend where rest of world’s underperformed us has outperformed.
But there have been these mean reversions phases.
And I like to look at a relative ratio with a 200 day moving average being average on and a Bollinger Band 2 standard deviations above or below that 200 day. And over this period we’ve seen mean reversion trades to trade to standard deviations above the two.
Tyler Wood 26:34
Below that 200 day.
Laurence Balanco, CLSA 26:42
100 day and that where we are right now in the ratio is at the 200 day and we basically have another 8% of relative outperformance of rest of world versus us. Just a trade to the top of that two standard deviation level. So I don’t have.
Any big reversal signs?
On the longer term trend, but at least in the near term, you know, I do think rest of world can still outperform at least to that Upper Bollinger band. And then in the decline, if we see rest of world 4 less, we start to get a bit more.
Evidence that this could be more meaningful then.
David Lundgren, CMT CFA 27:13
So you’re you’ve a couple times, you’ve mentioned the prospect it sounds.
At least it sounds like you’re talking about the prospect for a decline in equities.
So just to level set the conversation. Is that kind of what you’re looking for as we kind of get into the the, the second quarter of 25 and then how that plays out into into the latter part of 25?
Laurence Balanco, CLSA 27:32
So yeah, I mean looking at the setup, it is definitely downside risk.
You know Nvidia’s closed below $113.00 today.
I think that’s sort of quite a key level the February lows and it’s sort of, you know, $190.00 as as potential downside risk.
The Sox has been underperforming the second-half of last year, so I think you’ve had these breakdowns already, particularly from the tech side or the cyclical side of tech that is driving to the downside.
And I think I don’t have any historic precedent where us falls that the rest of world can actually still trade up in absolute terms.
So I think.
David Lundgren, CMT CFA 28:08
Yeah, you you just you just nailed my next question.
So so before I get there though, ’cause I I tend to agree with you on that.
Laurence Balanco, CLSA 28:13
Yep.
David Lundgren, CMT CFA 28:15
But what I do want to know before we get to that is I I totally, really value the insight about.
Seeing what markets, how they behave during bear markets.
Because I can, oftentimes.
Tilt your your perspective in terms of what will lead when the bear market’s over, right?
Laurence Balanco, CLSA 28:32
Yep, Yep.
David Lundgren, CMT CFA 28:32
We we see that happen a lot in bear market cycles.
It kind of.
It kind of gives you the the insight as to what will lead coming out of it. MM, but before we get to all of that, Mike, my question for you is in your because I know you have a a deep appreciation for history as well and you.
Laurence Balanco, CLSA 28:48
Yep.
David Lundgren, CMT CFA 28:48
Studied a lot of cycles. You’ve you’ve been in the business for a while.
When you, when you, when you think about the prospect for a decline in the market this year, are you thinking run-of-the-mill bear market or are you thinking something more than that and curious what your reason would be on either side?
Laurence Balanco, CLSA 29:06
Yeah. So short answer is I would.
You know, it’s always painful a bear market, so there’s nothing sort of run of the bull.
We all sort of suffer in it, but you know, I do think it would be a run-of-the-mill.
Why? I sort of say that more so than a 40 to 50% decline is that if I look at the credit indicators like credit spreads is what I’ve typically seen before a far more significant decline is.
Credit spreads have tended tended to widen as the S&P makes new hearts in the new harsh be made two weeks ago in the S&P, credit spreads were at their narrowest level since the October 2022 high in credit spreads. So to me this.
Is a best way to describe our clients. I think if you want to sort of giving fundamental sort of overlay this is apnl correction growth, slow down versus a balance sheet problem being a credit event.
Now, does that slow down just be two quarters?
David Lundgren, CMT CFA 30:05
Yeah. So that, that would definitely, yeah, yeah.
Laurence Balanco, CLSA 30:07
Is it 1/4?
You know that that’s hard to sort of frame a time scale around it, but you know on the breakdown from the trading range that you had for the S&P from December, you know an S&P down towards the 5105 thousand areas.
You know, sort of quite a logical.
Target for for a breakdown here into the the second quarter.
Could it get worse?
Yes, but I don’t think it’s.
I don’t think it’s a COVID type sell off. I don’t think it’s a 2007, 2008.
It may be more of a grinding move like the 2000.
Tyler Wood 30:43
22O.
Laurence Balanco, CLSA 30:43
One to two period where you know you made a 10% decline. You then have a sort of a 7% rally that sort of petered out and it just takes a lot longer to work through.
David Lundgren, CMT CFA 30:54
Yeah, you mentioned 5000.
I know you’re you’re. You have a lot of.
Tools you rely on to to generate targets.
I’m curious what what, what did you lean on to get to 5000?
Laurence Balanco, CLSA 31:10
Oh, so so basically the 5100 area is roughly the the measured move from that trading range that you had from December?
So very simple price pattern trading range move measured down to to get to that sort of 5000 area.
David Lundgren, CMT CFA 31:17
Measured move.
Right.
Yeah. OK and.
And when you, when you look at the data as you see it today, how would you?
How would you say the data is in terms of supporting the idea that you know you?
It’s you.
You have enough evidence to place the bearish beta.
You still?
You still waiting for more evidence to come in?
Laurence Balanco, CLSA 31:41
Well, tell tell you where the you know, sitting on focus on rest of world. You know, China has its high momentum.
Breakouts. You know, Europe has high momentum breakout, so it’s it’s not as if I have a synchronized decline in market.
David Lundgren, CMT CFA 31:55
Hmm.
Laurence Balanco, CLSA 31:57
So this does seem to be more the rotational correction.
And again, I’d say this is the setup here. If if you want to talk about, you know, leaning to to a bearish.
Sort of corrector phase, you know, more like that 2001 two period or if you remember you know financials actually in the US performed well, industrials performed well and they peaked 8 months after tech peaked.
David Lundgren, CMT CFA 32:18
Yeah.
Laurence Balanco, CLSA 32:21
So we could be in this sort of period where there’s still parts of the market that can give you absolute returns, not only relative returns.
So you know I’ve used the comments of, you know, staying opportunistic.
You know, still looking for those opportunities rather than having a D1 view that everything falls together.
So think of it more on a rotational basis, particularly because they have exposure to the the rest of world markets focused on that where where you actually seen and you should be giving benefit of the doubt that the high momentum break out to spot the headlines and the.
Tariff risks on on the China side, you’ve had some significant breakouts. You look at the charts of Alibaba. If you look at the China Internet ETF listed in the US, you know it’s hard to be bearish on that.
David Lundgren, CMT CFA 33:03
Yeah.
Laurence Balanco, CLSA 33:07
But looking at the breakdown in the Sox.
Looking at the NASDAQ broken breaking below the lower boundary of the trading range that you had from December below, it’s 200 day momentum.
Still confirming that lows.
You know, it does look like there’s downside risk there.
David Lundgren, CMT CFA 33:22
Right. And to kind of bring it back to your earlier point, in that scenario, if if the US market has some weakness coming coming into like the second quarter or beyond, it’s not a scenario where you you envision like these great break outs that you’re seeing in these.
Big momentum surges, particularly in China, which which I think I see as well.
You you think there’s a mean reversion risk on that?
Kind of a. There’s not. Even though the charts look great, this may not be the best place to kind of load the boat on China.
Laurence Balanco, CLSA 33:51
Yeah, absolutely.
I mean, ideally this corrective action and if you get follow through on the downside of the US on the China set up and the European set up, you actually get pull backs to to the breakout set you saw other January or February.
David Lundgren, CMT CFA 33:52
Yeah.
Yeah.
Laurence Balanco, CLSA 34:03
So you get, you get a chance to sort of relook at those markets on that pull back. And and again, I think that will go quite telling.
If the market does buy the pull back to that breakout area, that there is sort of belief by the action by markets that that they are buyers on new buyers that have stepped in at that old resistance area.
So I think that would be very telling behavior.
And then on the longevity of of the breakouts and the RE rating that you’ve seen in rest of world basically.
David Lundgren, CMT CFA 34:34
If there’s a if there’s a rotation away from the US, let’s say we go through this corrective slash bear market environment and there’s a there’s a rotation away from the US what?
What is it?
What does that mean?
Like, how do you?
How do you try to piece that together fundamentally?
What does that?
What does that mean?
Does it mean that if there’s just better growth elsewhere? Or is it? Is it more just a function that the tech sector’s been leading for so long and the US is basically tech? So maybe the the US market takes a breather because it is tech and every?
Else.
Has a shot at leadership or?
Laurence Balanco, CLSA 35:02
Yeah. I mean, I think the the US market suffers from what they’ve benefited most from is at the very least a digestion phase in tech.
David Lundgren, CMT CFA 35:07
Yeah.
Laurence Balanco, CLSA 35:11
A digestion phase in the AI that the delta if I think in that S shape curve again is that the delta of the AI theme has slowed. So while it’s still growing, it does look like you’re at a slow slowing pace now.
David Lundgren, CMT CFA 35:11
Yeah.
Laurence Balanco, CLSA 35:27
And that’s showing up. If you look at the chart of NVIDIA, you peaked in November last year.
You try to break out in January.
You failed.
And now you broke below the February low. So there’s clearly sort of evidence of that slowing, you know, does it take the shape of just a 20% wide trading range?
We have seen NVIDIA fall 50%, you know since you bottomed at the COVID lows.
So there can be these deeper, deeper setbacks.
But even if it’s just a trading range, you know that’s still relative underperformance and the big waiting from tech within you know the US market is the anchor.
Rather than the the tailwind that it’s been for for over a decade, right?
David Lundgren, CMT CFA 36:06
Yeah.
Yeah. I just think that you mentioned AI.
And and you know it’s it’s obviously the, the, the technological theme that that’s really driving things today. And when you look back in history, we we can point to other.
Themes that have driven markets to extremes and you look where NVIDIA went in terms of valuation, it was 45 times trailing earnings. And so when just just when you look at how in history, how those scenarios have unfolded in kind of like the air has come out.
Of the bubble this is. This is kind of why I asked if you thought it was just a run-of-the-mill bear market, which I agree with you is not comfortable, but nonetheless it’s a lot better, you know 30% or 25% a lot better.
Than 50%.
But when you, when you do look at historical post bubble environments, assuming that 45 times sales is is fair to say was a bubble for NVIDIA, they they generally don’t stop at 20 to 25%.
They generally go down a lot more and I’m curious if you.
If you have any thoughts on you know whether we should be thinking like that or not.
Laurence Balanco, CLSA 37:07
I’ve actually got this an analogue that that’s, you know I have shared with clients and we’ll run through because you know AI is, you know, a new technology, a new theme that’s getting adopted.
And I’ve compared it actually to Nova Nordis and why I’ve done that is, you know, Nova Nordis come out with the GLP one drug, so also a new sort of thematic big market.
So I’ve actually overlay NVIDIA with novena.
Nobody orders ran into margin pressures late last year.
The stock fell 45% and has started to stabilize year to date. So I thought that was an interesting analogue where you know GLP, one drugs are still growing but the the margins at which they can sell the drugs has come into question and and that’s pretty.
David Lundgren, CMT CFA 37:46
Yeah.
Laurence Balanco, CLSA 37:56
Much been the conversation since the NVIDIA results 2 weeks ago that you know is a sort of peak margins for NVIDIA.
So I think that’s where.
There’s that’s a 45% decline that Nova Nordisor, but it’s much less than the Cisco decline.
So if you think the Cisco built out the Internet in 2000, it peaked and you know a decade later Cisco was still below those 2000 Harts.
David Lundgren, CMT CFA 38:11
Yeah.
Laurence Balanco, CLSA 38:21
But you got other tech stocks that then benefited from that build out of the Internet infrastructure.
So you know, is this peak that you’re making in in NVIDIA?
What Cisco was or is it margin slow down to what novan?
What saw last year?
Probably sort of more focused on the novenaudis correction and the digestion phase that we’re getting through here. But to that point, David, is that, you know, you’re not buying invaded on the pullback here?
I think you start to look at, yeah.
David Lundgren, CMT CFA 38:52
Yeah, either.
Either way, right? Whether it’s going down 30% or 60 or 70%, you still not buying it here anyway.
Laurence Balanco, CLSA 38:55
Yeah.
David Lundgren, CMT CFA 38:57
That’s the point, right?
Laurence Balanco, CLSA 38:57
Yeah. Yeah, that’s right. Yep.
David Lundgren, CMT CFA 38:58
That is the take away. Yeah. Yeah. Interesting.
Laurence Balanco, CLSA 39:01
So I think yeah, that, that, that peak and then the repair process, if you look at the Novan orders chart, you know using that as the the analogue you know that for the past three months has found a level after 45 falling 45%, Anthony and.
Got a three month consolidation.
So yes, that’s potentially a base, but NVIDIA still has to get to that point that it starts to stabilize first and gives us sort of an equilibrium in the price setup that you know you it’s found a level from a valuation perspective that that the market New Buy.
Are prepared to step right in right now. I think you’re still getting.
Stale longs, you know, reducing it now and sort of questioning that the margin story there.
So that’s where the downside risk is.
There’s no new buyers to sort of hold the decline just yet.
David Lundgren, CMT CFA 39:46
Yeah, this, this, this guy. Tyler, please. Yeah.
Tyler Wood 39:46
You know, a great technician.
Sorry, a great great technician used to say before a stock can begin moving up, it has to stop going down, which I think is the very simplistic way of restating what you just delivered. Yep.
Laurence Balanco, CLSA 39:55
Yes.
Yep.
David Lundgren, CMT CFA 40:01
Yeah, yeah.
Laurence Balanco, CLSA 40:02
Yeah. I mean, if you if you want to talk chart patterns on on NVIDIA, you know if you just draw it up, you do have a lower high, you broke below the February lows today. So you could argue you’ve got the head and shoulders top right and the.
Downside target from that’s $80.00 sort of presented that as a you know, that’s what the risk is in NVIDIA to to some clients yesterday and you sort of get that gulp like kind of trade that low.
Yeah, because you’ve just had this sort of repetitive bother dips and it keeps on trading high as like how can it derate to that sort of stance?
And that’s why I think you know that there’s still people trapped on the long side. If this continues to derate, that, you know, will land up selling the momentum as it picks up on the downside.
David Lundgren, CMT CFA 40:48
Yeah, the the it’s, it’s. It’s actually shocking when you look at the holdings of the sovereign wealth funds and how much they own of the mag 7.
It’s just it’s incredible. And and it’s a it’s a, this is a stark reminder that, you know, passive investing can be great because you get you’ll like if you’re a passive investor in say like a large cap index, you’ll never miss the next 10 bagger you’ll always own.
The next 10 bagger, because the index will have to own it.
Laurence Balanco, CLSA 41:11
Yeah.
David Lundgren, CMT CFA 41:13
It’s basically momentum investing.
But what it?
Laurence Balanco, CLSA 41:14
Yep.
David Lundgren, CMT CFA 41:15
What on on?
That’s the good side.
The bad side is momentum investing without risk management.
So like Cisco, as you point out, and hopefully Tyler will be able to put these charts in the show notes.
But Cisco, when it peaked, it went down 70 or 80%.
Tyler Wood 41:25
100%.
Laurence Balanco, CLSA 41:29
Yep.
David Lundgren, CMT CFA 41:29
And there was no risk management mechanism in the index, so it wrote it all the way down.
Laurence Balanco, CLSA 41:33
Yep, absolutely.
David Lundgren, CMT CFA 41:35
So that yeah, that that’ll be that’ll be the concern. So before we before we move to perhaps overseas get some insights there.
I’m curious, when you when you’re watching capital kind of flowing away from or at least seeming to flow away from Mag, seven tech semis, all these areas you’ve mentioned, are you within the US?
Are you seeing anything perking up that’s not defensive?
Laurence Balanco, CLSA 42:03
It’s a mathematic perspective.
You know that there’s two ETFs that that that I look at which you know derated significantly from 21 through 23 being the Fintech ETF and the other one being robotic and automation.
So Robo is the ticker.
David Lundgren, CMT CFA 42:24
Hmm.
Laurence Balanco, CLSA 42:25
Where, like again, you know, they’re not going to go up in a corrector phase. But if you look at both of those charts, you had meaningful derating of 50% through 21 and into 22 and from 22 basically through to 24, you had what?
We’d call as the basing pattern, right? This whole process of stabilizing global fintech broke out last year and and we sort of have set up these sort of higher lows from it.
So that’s a space that I think sort of on a longer term basis that you know the weakness I would look at buying into it and that the robotics and automation ETF is another one where.
We’ve consolidated for two to three years some of the key components of that have actually been consolidating for for four years where you know that’s where I can see sort of big re ratings and and potential sort of new leadership emerge. You know looking more at a Cy.
Side, rather than saying you should buy healthcare today because it’s giving you a relative out performance is a trend there and that is true.
David Lundgren, CMT CFA 43:20
Hmm.
Laurence Balanco, CLSA 43:21
You know healthcare in the euro stable, I’m sure with your work that you’ve done, you know that that has come at one of the better sort of parts of the market year to date in the US, but that sort of fits.
That defensive criteria?
So yeah, if you look, we’re trying to look through that as far as a broader basket goes, I would look at the the Fintech theme as well as the robotics and automation.
David Lundgren, CMT CFA 43:46
Yeah. Interesting. OK.
Globally.
Mention China.
What about in my work?
The Middle East ranks really quite well and has for quite a while.
Laurence Balanco, CLSA 44:00
Yep.
David Lundgren, CMT CFA 44:02
I think we should.
We should discuss specific regions and countries around the world, but I also think that a a big contributing factor to what happens globally from a relative perspective will certainly be the dollar and that’s been taking it on the chin really considerably recently.
And I’m I’m curious, thinking about global equities, how does the dollar play in and like, you know, tie those in for us?
Laurence Balanco, CLSA 44:26
I mean, so just to start with the dollar, there’s a chart that I I always share and even our strategist shares it.
I mean, it’s so distinct the relationship between the performance of emerging markets relative to developed markets with the emerging market currencies.
David Lundgren, CMT CFA 44:39
Yeah.
Laurence Balanco, CLSA 44:42
So when emerging market currencies are strengthening, that typically works in lockstep with emerging market currencies, emerging market equity markets outperforming developed markets.
So having this sharp reversal in the dollar, part of it is aided by China’s obviously rebound.
But typically you see a weaker dollar being more beneficial.
For emerging markets, it’s a less of a driver for sort of European markets.
Having a stronger euro, but definitely from a broader emerging market asset class, a weaker dollar as supported rewriting in developed markets now that the dollar index itself.
I think we can fairly say that the break out in December being above 106107, which was the top end of the trading range that you had from 22 to 24 has been a failed breakout with the sharp reversal this week you.
Back in that range. But interestingly, if you look at it on a longer term basis, you know the dollar index had risen from you know 2011 or 2008 depending which index you look at is you know have quite a distinct lower high relative to.
The September 2022 high and if you break below 100 on that dollar index, you get the first major pivot high, which would be 110 and a new low below the 100 area.
David Lundgren, CMT CFA 45:54
Hmm.
Laurence Balanco, CLSA 45:56
Confirming a change in a essentially decade long uptrend in the dollar.
And again, that can talk back to David Bean.
You know what?
We should be looking for. Is this potential? You know, rewriting in rest of world if we get the confirmed dollar reversal?
David Lundgren, CMT CFA 46:13
Yeah, it’s it’s really interesting because the, the one of the conversations that I hear and and you see it in social media and you hear it on the news is that they’re trying to justify staying in the US because you can do so even though the the, the.
Mag 7 May be really expensive and we’re rotating away from that, but you can you can find value in the US and I think that potentially could be the missed point, right? Is that the value is not here in the US, it’s it’s globally outside of the US.
And you might get the the kicker on your global exposure.
You might get the kicker of a tailwind of strong currency, right?
Tyler Wood 46:44
That’s it.
Laurence Balanco, CLSA 46:44
Yeah, correct.
So that that that’ll be the added benefit.
For investing offshore, came out of Aus dominated price? Yep.
David Lundgren, CMT CFA 46:53
Yeah. Yeah. OK.
So when when you do look out?
So first of all, before we do move on on the dollar, so is it you are you thinking?
So I’m thinking if I hear you correctly, it’s weaker markets in the US down at perhaps 5000?
Is that dovetailed with a weak dollar?
Laurence Balanco, CLSA 47:12
Yeah. I mean, typically again, This is why a sort of sidestep starting with the correlation.
But typically we see equity market set up with dollar strength, but you know new administration potentially different policies like are we seeing sort of a bigger shift?
David Lundgren, CMT CFA 47:19
Yeah.
Laurence Balanco, CLSA 47:30
That is causing a change in the perception of dollar assets or even if you look at Central Bank buying more of gold and U.S. Treasury, you know so is there this sort of bigger trend from again rest of world central banks to look at gold as an altern?
To holding U.S. Treasury and that sort of shows up in the dollar move and you know that that, that can stem from that global S conversation after the Russian, you know, central bank assets and the dollar and the weaponization of the dollar at the end of the day.
So you know potentially that trend is while we’re getting a lower high and the dollar hasn’t traded.
And surged higher in this most recent selling on the US equity side.
So that you know that I think the price action is sort of telling us that it’s not as strong and we’re not seeing that same flows we typically see.
David Lundgren, CMT CFA 48:13
Hmm.
Laurence Balanco, CLSA 48:19
So I think we can see an equity market correction even without that dollar sort of spark that we typically see.
David Lundgren, CMT CFA 48:26
Yeah. Yeah, right.
Laurence Balanco, CLSA 48:26
That’s how it’s playing out so far.
The key level is still 100 on the dollar index to sort of reinforce a more significant reversal in the dollar. We could just have a stable environment between 100 and 106 and I think.
David Lundgren, CMT CFA 48:34
Right.
Mm hmm.
Laurence Balanco, CLSA 48:39
Again, as long as the dollar is not accelerating higher, you know rest of world acids can can still work. Basically would would be the the message there.
David Lundgren, CMT CFA 48:48
Right. And so looking globally, I mean you you mentioned China a couple times is do you do you have a favorite region outside of outside of the US to to consider?
Laurence Balanco, CLSA 49:00
Yeah. I mean, so one of the the markets, a very small market, but an interesting market in in Singapore.
David Lundgren, CMT CFA 49:06
Hmm.
Laurence Balanco, CLSA 49:06
So obviously within the region does have China trials, but sort of straddles sort of West and sort of east?
In exposure and in its market that haven’t done anything for four years since 2019, we got a breakout last year and this is sort of on a on a looking at a monthly chart, just a longer term view and it also underperformed the region for.
Over a decade where we’ve seen a break out there, but it’s interesting the stocks that are really driving this, you know, come from that sort of fintech side of things.
So C limited, which is actually listed in the US, grab which, which is sort of the Southeast Asia. Uber is another side and then you’ve got, you know, stocks like Simcorp Industries, which is sort of more an infrastructure play, you know, these are stocks that we sort of.
David Lundgren, CMT CFA 49:40
Yeah.
Laurence Balanco, CLSA 49:50
Highlighted for this year to be sort of meaningful gains and you know the price action, if you look at the charts, you’ve got bases in place.
In grab and C Limited and Simcoe, Marine had a longer term uptrend, consolidated for four years and we’re breaking out of that.
So that’s one part and then you know, obviously just to to sort of reiterate the point, it’s a bigger surprise factor would be China having been in a trading range, you know the lows that you made in China, you saw a 63% decline in the M.
China index from the 2021 highs into the October 22 lows.
And most recently, we’ve broken above the highs that you made through 2324.
So you have the 60% ward facing pattern or trading range in place now that can still support another sort of 30% upside. If I look at the bigger picture setup.
Do I wanna chase it where it is here today?
China Internet has also broken above those same highs going back to 2022 is, I think, pull backs to that breakout area are worth looking as an opportunity to add some exposure. And you know you can just simply look at the chart of Alibaba essentially reflects that.
Same pattern that you got on the MSR China index or the China Internet ETF where you had derated significantly from 21 into October 22 and from October 22.
Tyler Wood 51:08
Mm hmm.
Laurence Balanco, CLSA 51:14
Basically up until January this year had been range bound and and the most recent breakout. So Alibaba back to the 117 hundred $20 is the breakout point which looks like an an interesting re entry point.
David Lundgren, CMT CFA 51:29
Yeah, a a great sentiment. Read on China was that was that I follow.
I know probably 600 or so ETFs and I’m doing my weekend run, running the models and whatnot and and I get a bunch of these error symbols on a bunch of Chinese ETFs and they had just gotten rid of all of, not all of them, but I.
Say probably was probably eight of the 11.
China sector ETF.
Laurence Balanco, CLSA 51:52
They’re being shot. Yep, Yep.
David Lundgren, CMT CFA 51:52
They closed them and they basically closed them right at the lows.
It’s perfect.
Laurence Balanco, CLSA 51:58
Another sentiment guard, right?
David Lundgren, CMT CFA 52:00
Yeah. So here we go.
Up to up to the races, OK, so.
In in does does that does?
Tyler Wood 52:08
That’s like when stocks get kicked out of the the Dow.
David Lundgren, CMT CFA 52:10
That yeah, yeah.
Tyler Wood 52:12
That’s usually when they’ve bought them.
David Lundgren, CMT CFA 52:14
Yeah, and how about?
How about let’s say in the emerging markets for for a moment?
What else are you seeing there?
I know you mentioned Mexico and not sure if you said anything about Brazil, but I I mentioned Middle East.
What are you seeing there? Are you?
Are you seeing life there as well?
Laurence Balanco, CLSA 52:33
So Brazil, to me, is probably the most interesting one within the Latin context.
Obviously Argentina was the great at performer last year.
David Lundgren, CMT CFA 52:41
Yeah, yeah.
Laurence Balanco, CLSA 52:42
Chile’s actually breaking out at the start of this year again, sort of changing government being being the catalyst in in both those markets. Brazil’s been an interesting one.
Because it’s always been the the the China of Latin America being a big underperformer for the past four years and has essentially held in this 50% wide trading range since it peaked in 2021 after the COVID lows you started the year at the bottom end.
Of the range, we’ve rally to the midpoint, but I think from a longer term side, that’s a emerging market that also put in front of breaking out of that range. You know Brazil can become a leadership market going forward.
So that’s one I would sort of single out in in that term. If you’re looking at a more immediate latter market, I think Chile’s the current.
Breakout in Momentum play and probably the other sort of big markets in emerging markets that gets a lot of attention is India. And I probably say it is a consensus.
Bullish story just on the growth from a population on from an economic side.
But it’s been one of the worst performing emerging markets year to date, it’s down 15%, but prior to that it was called the S&P of Asia because it tracked higher with the S&P. It was essentially bulletproof.
David Lundgren, CMT CFA 53:54
Yeah.
Yeah.
Laurence Balanco, CLSA 54:04
So this is the biggest sort of correction and again it looks like it’s a earning slowdown correction that you’ve seen here. So, so the message here is to be patient on India to relook at an entry point.
I’ve only just started to see some slowing down South momentum for the correction that you’ve developed of the September highs.
We’re down, you know, over 15%.
So that is a market that, you know, remains on the radar and we only just started to see signs of the slowing downside momentum.
So the price momentum, divergent that I’ve mentioned earlier on.
So I think you can, if you’re not involved in India, you know you can start to initiate a position and see if that turns into the basing profile that you you want to see. But that’s another market that gets a lot of attention and it’s also quite int.
David Lundgren, CMT CFA 54:45
Yeah.
Laurence Balanco, CLSA 54:49
That a lot of particularly US based asset managers have a EM X China mandate now and India is the biggest component within that.
So it is a market that, you know, if you’re not involved in in China, you have a fairly big exposure to India and you have started the year on the back foot.
But right now I do have signs of slowing down some momentum.
So I think you can start a nibble away at at that market at these levels.
David Lundgren, CMT CFA 55:13
Yeah, there there was a a couple of years run there where the Indian market just did incredibly well. And I think it’s interesting if you overlay the Indian market with the rupee, it basically was a two year window where the rupee did nothing.
It just kind of stayed in a range, which is, which is basically a massive bull market for an emerging market currency. And so that that gave the stability in the backdrop for that market to absolutely rip.
Laurence Balanco, CLSA 55:27
Yep.
Yep, correct.
David Lundgren, CMT CFA 55:34
Tyler and I were over there a couple years ago and just the amount of money that was flowing in from the the.
The I guess the young investors, the young investor class over there was was so powerful that it overwhelmed whatever outflows were coming from big institutions. So much so that the the market just kept going higher.
Laurence Balanco, CLSA 55:51
Yeah.
This one.
David Lundgren, CMT CFA 55:53
But then, like, right around the middle of 24, the rupee just started to really, really weaken. And that’s that’s pretty much right. When the Indian market, the Indian market peaked.
So I’m curious if you have a view on the rupee. I mean you do you require that to stabilize again in order for the Indian market to start to show some strength?
Laurence Balanco, CLSA 56:11
Yes, I got two things on that.
I mean, you did break out from that two year trading range, which basically gave you an upside target around the 88, which we close to right now.
So I think we now have we’re at the upper boundary of what will likely be a higher range for the rupee going forward. But you know, to your point over the years, you need to see some stability.
Tyler Wood 56:20
Mm hmm.
Laurence Balanco, CLSA 56:30
I’ve probably seen more stability in the Brazilian real right now and that’s why I think you’ve seen that rally off the bottom end of the range, but you’re having some stability.
David Lundgren, CMT CFA 56:37
Yeah.
Laurence Balanco, CLSA 56:39
Capped out at the 88 on the rupee, I think should help the slowing downside momentum signal that we’re getting on nifty or or the India ETF in the US starting to slow.
David Lundgren, CMT CFA 56:52
One of the I guess before we move on to to Europe, one, one of the things that that’s really changed with respect to emerging markets and I was just in Qatar in Doha and you see it there.
We saw it in in.
Dubai, just there. There’s so much of A concerted effort to move away from a resource dependent economy.
Energy in particular, but they’re really trying to build out a consumer base, healthcare tech.
Ecosystem. So I’m curious if you’ve noticed any changes or shifts in the relationship between the performance of these emerging markets relative to commodities?
Is it less linked as it used to compared to how it used to be?
Laurence Balanco, CLSA 57:37
Yeah, I think the leader like particularly for Dubai, you know the property developers are still sort of key drivers and then the banks that that come through it.
So I think sort of that diversifying factor away from you know, the oil price essentially being the the same chart as the UAE or even the Saudi index. It definitely has sort of shifted away from that. And I think a large portion of that has been driven by.
David Lundgren, CMT CFA 57:46
Yeah.
Yeah, exactly.
Laurence Balanco, CLSA 58:04
The banks and then some of the property developers that have come through the tech companies haven’t really got big enough to be a driver for the index.
So it’s still, and this is the case for a lot of emerging markets, it’s still very much.
A.
Financials sort of driven indices, but I would say only China with the China Internet names has a large portion of Internet names. Obviously with Taiwan, with the semiconductor side, Japan’s a bit more diversified, but in Japan it’s been banks again. So in a lot of the emerg.
David Lundgren, CMT CFA 58:20
Hmm.
Yeah, yeah.
Laurence Balanco, CLSA 58:37
Markets the best way to play the recoveries through the financials and and I think in the Middle East it’s those financials and the property names.
That have driven the index performance and taken away from just the link with the oil price at the end of the day.
So, so definitely it.
David Lundgren, CMT CFA 58:52
Right. Interesting.
Laurence Balanco, CLSA 58:53
It has maturing that as yeah, the economy’s grown without, you know, just being an an oil price proxy.
David Lundgren, CMT CFA 59:00
Right, right.
Tyler Wood 59:02
And there is a a tendency from several of those governments to take infrastructure projects once they’re once they’ve reached completion and and bring them to IPO, right. They want to create greater liquidity and more names, a deeper equity benchmark.
David Lundgren, CMT CFA 59:03
Your.
Laurence Balanco, CLSA 59:12
Yep.
Tyler Wood 59:16
So a lot of those are, they’ve already been proven profitable and their government backed infrastructure projects, which which tend to.
Laurence Balanco, CLSA 59:16
Yep.
Yep.
Tyler Wood 59:27
Be anti correlated to the oil markets.
David Lundgren, CMT CFA 59:29
Hmm.
Laurence Balanco, CLSA 59:29
Yeah, yeah. And I normally got some kind of income stream that’s related to like a dividend, dividend yield to that.
Tyler Wood 59:35
Yep, Yep.
Laurence Balanco, CLSA 59:36
There’s continued diversified the the investments from so.
David Lundgren, CMT CFA 59:39
Yeah.
Another market that has kind of gone nowhere, at least from a relative perspective, is Europe as well. So that has a lot to do with it lacking a tech sector per say, so that that’s a large part of why it underperform. But are you?
Are you seeing other reasons to maybe warm up to to to the European markets as well?
Laurence Balanco, CLSA 1:00:00
On the there’s a bit of an overlay here, but the industrials are banks. Interestingly, led the this recent rally that started in December in the European side. If you look at the European banks index, you know high momentum break out of essentially having done nothing in 2020.
Four, but industrials.
As a complex, as another sort of consolidation pattern that you saw throughout 2024 did nothing.
We’ve broken out there.
You do have the overlay with the defensive stocks sitting within that industrial complex.
David Lundgren, CMT CFA 1:00:27
Yeah.
Laurence Balanco, CLSA 1:00:31
So you know, with the increase in spend on defense that that’s been a key driver, but again maybe a proxy to a China recovery is on the consumer side, particularly the luxury goods stocks which are broken out the the earnings results have also started to improve having seen.
David Lundgren, CMT CFA 1:00:44
Yeah.
Laurence Balanco, CLSA 1:00:49
A slowdown for two years.
So if you if you look at France as sort of that play on the luxury goods names.
That you’ve seen breakouts there?
So I think you know for me those 3 sectors are sort of key focus points.
And even in this current sort of risk off, you know, Europe also carries a large number of healthcare names.
So like in the US?
So this immediate relative outperformance of healthcare you seen that in Europe too, but as you know, looking through this correction that we see now, I would still focus on the industrials, the luxury goods as well as financials.
David Lundgren, CMT CFA 1:01:26
Right, right.
Tyler Wood 1:01:27
So something like the Louis Vuitton, the luxury goods play you’re referring to the breakout, are you just talking about year to date performance?
Like if I’m looking at this on a weekly chart, it looks like a counter trend rally in a pretty well defined downtrend.
Laurence Balanco, CLSA 1:01:43
Yeah, you should look to the leaders within luxury goods.
Look at Richmond.
You know that’s broken out of the two year trading range. ’cause. You’re right. If you look at the LVMH chart, you know you’ve had a bounce up the bottom end, but it’s still within the range. It’s still below the 2022 highs, but.
Tyler Wood 1:01:48
Richmond.
Laurence Balanco, CLSA 1:01:59
Richmond and Hermes have been the two big breakouts to the upside.
David Lundgren, CMT CFA 1:02:04
Yeah.
Laurence Balanco, CLSA 1:02:04
Those are the two leadership stocks that the biggest weightings within that and then at the other side of the spectrum, you’ve got the names like Karen, which had been big underperformers.
So Ker in in France and they started a base out and hook up bus in Germany. You know derated started a base out and hook up.
So yeah, again, there’s a bit of dispersion as you get in in a number of sectors, but yeah, the Richmond and the Hermes break out. That’s where the leadership has come from within that luxury goodsource.
Tyler Wood 1:02:36
Perfect. Thank you.
David Lundgren, CMT CFA 1:02:36
Right.
And there’s quite a.
Tyler Wood 1:02:38
My wife will tell you I don’t have great taste anyways, Lawrence.
So either in stocks or in fashion.
Laurence Balanco, CLSA 1:02:41
Yeah. Well, there, there’s a few handbags lying around here that I, I invest in items apparently.
Tyler Wood 1:02:50
Credit.
David Lundgren, CMT CFA 1:02:50
What? What about I? I think in, in, in Europe through various parts of Europe, there’s also big materials, materials, contingency. Is you seeing anything there? And I know in the US you have the materials are just terrible and the the the base metals, if you look at Comm.
They outside of copper, it’s hard to find a good chart, so anything you see in there.
Laurence Balanco, CLSA 1:03:07
Yeah.
Yeah, I think it is.
So there’s a bit of a story I think behind the commodity side, but I’ll just deal with the the the charts 1st and then sort of just share some sort of feedback that on the commodity side more broadly is to me aluminium is out of the base met.
If you look at aluminium aluminium, you know you derate it from 22.
You’ve got this big base and you’re approaching the breakout error, so 2750 is the top end of this trading range. So that’s out of the base metals, the closest to a potential breakout.
If you look at ALCO, some of the listed aluminum names, they don’t quite reflect what you the underlying metal. And I’d say quite similar to to the copper chart, you know, you see mix copper, we’re trading in a range between 4:00 and 5:00 dollars.
It does look like we can test $5.00, but I’m really not seeing any leadership from, you know, material stocks. If you look at the broader indices globally, obviously the only place where you’ve got pure trend and momentum is gold.
David Lundgren, CMT CFA 1:03:56
Mm hmm.
Right.
Laurence Balanco, CLSA 1:04:09
I think gold the gold ETF, both the junior and GDX the best performing sort of sub sector within the US year to date episode 17%. But even the gold equity charts don’t look as constructive as gold itself, which is in that sort of classic low momentum up.
David Lundgren, CMT CFA 1:04:09
Right.
Tyler Wood 1:04:24
Hmm.
Laurence Balanco, CLSA 1:04:28
Trend phase.
So yeah, I would say materials as a broader basket similar to energy.
You’re not really seeing any, any real leadership there and I think this week’s break below $70.00 for Brent is is quite a a meaningful break where we could see oil back at 51, which in a roundabout way can have a real sort of impact on.
Inflation expectations. If you overlay Brent with the five year five year forwards, very close relationship there and a lower oil price can see that five year expectation.
Inflation drop, which could help yields come back in the in the US.
David Lundgren, CMT CFA 1:05:05
What? What’s the?
What’s the, I guess interpretation of oil at 50 is that.
Is that just drill, baby drill or is it economic growth is slowing?
Laurence Balanco, CLSA 1:05:15
So I think it’s, I think it’s on 2 scores.
Let’s let’s assume that we have flat growth.
What? So we have a constant on the growth that it’s 22 to 3% that it’s it’s it’s equal. I think the the conversation how you get to 51 and you already saw it this week with OPEC deciding to increase production is if you have us.
Tyler Wood 1:05:24
Command side is stable.
David Lundgren, CMT CFA 1:05:27
Yeah.
Yeah.
Laurence Balanco, CLSA 1:05:37
Increasing production OPEC, increasing production.
And while OPEC increases production, if OPEC set that floor still at $70.00, they lose market share to the US So Saudi’s basically pump oil.
They get market share back, but the price collapses to $50.
We’ve seen it a few times.
I think the last time we saw it was back 2014 fifteen, where the Saudis sort of flooded the market.
David Lundgren, CMT CFA 1:06:00
Yeah.
Laurence Balanco, CLSA 1:06:01
Oil prices dropped significantly, so that’s the supply demand dynamics of how oil gets down to 51, you know.
Which the chart is suggesting the break of 70 is now a supply.
And you know, there’s potential growth slow down in the US is having that impact of a of a negative oil price.
David Lundgren, CMT CFA 1:06:22
Yeah, there’s, there’s, I guess three more markets that we should probably touch on before we before we wrap up, I’m thinking.
The rates 10 year Treasury.
And then maybe we can tag gold and Bitcoin together into the same conversation. If you think it’s there’s a there’s a bow that can be tied there. Not not forcing you on that, but so let’s start with rates.
What do you think on rates and what does that do to the equity market?
Laurence Balanco, CLSA 1:06:48
Yes. So so I think I had a brief point on the relationship of equity markets and yields earlier on. And so how it has evolved from being very strongly.
David Lundgren, CMT CFA 1:06:55
Yeah.
Laurence Balanco, CLSA 1:06:59
Sort of negatively correlated from 21 to 23, where higher rates, lower equity markets where that relationship has really evolved that the equity market only reacts negatively to higher rates is if the rate of change increases at a sharp pace.
David Lundgren, CMT CFA 1:07:14
Right.
Laurence Balanco, CLSA 1:07:16
And you know, I’ve simply drawn up and highlighted a model where I just simply use a 20 day rate of change on the 10 year yield and when that 20 day rate of change moves above a 10% threshold, that’s typically where we’ve seen the S&P.
David Lundgren, CMT CFA 1:07:25
Mm hmm.
Laurence Balanco, CLSA 1:07:31
Correct. You know three to 10%. So so that I focused on or highlighted the clients is that the levels don’t seem to be that relevant as they were 2001 to 2003, but it’s the delta of of yields that is more important.
So. So that’s the one point, just looking at it as a risk on risk off barometer.
The second point is September 2022 was a significant event.
We broke above that generational downtrend that you can draw from the 1980 peaks, but it’s quite interesting. Since that breakout you know we’ve really sort of bashed our heads against that 5% area which is the highs that you saw in 2006 and seven and.
David Lundgren, CMT CFA 1:08:05
Yeah.
Laurence Balanco, CLSA 1:08:08
It has become a cap and we basically now have seen for the last 12 months essentially a trading range.
For yields you know above 3.75 and below the 5% area.
And it’s quite interesting that that range is similar to the range that you had from 2004 to 2008, trading between 3.75 and 5%.
So yes, we’ve broken a generational downtrend but we currently and I don’t see any evidence of an imminent break out to the upside of this range.
So 5% a cap and if anything, with this fear of AUS slowdown.
You know that there’s the setup that way.
I think the yields can trade down to 3.75, particularly with this breakdown in oil and having an impact on inflation expectations.
David Lundgren, CMT CFA 1:08:59
Yeah, and rates?
Rates trading down, oil trading down.
Dollar trading down.
Any message there or is it just?
Laurence Balanco, CLSA 1:09:09
But it’s interesting. I was going to say this earlier on the growth slowdown that the oil breakdown seems to be the supply demand dynamics in oil because you know we always used to talk about doctor copper being the the metal with the economics degree.
David Lundgren, CMT CFA 1:09:10
You know.
Yeah, right.
Laurence Balanco, CLSA 1:09:24
Is that we’re not seeing copper break below $4.
David Lundgren, CMT CFA 1:09:27
Yeah, yeah, yeah.
Laurence Balanco, CLSA 1:09:28
A copper may be caught up into the tariff walls, but if if I try and sort of line up that what are the the key messages about, you know, highly likelihood of a of a major recession, you know shouldn’t be seen copper breaking down and maybe China started?
To stabilize and you’ve got some support coming through there where you get the US slowing.
So I think John Murphy’s book that he’s first intermarket analysis book, you know, used to talk about Germany being the counter cycle to the US.
David Lundgren, CMT CFA 1:09:55
Yeah.
Laurence Balanco, CLSA 1:10:00
And then we had a synchronized world.
So when sort of us was selling off Germany, sort of did well, you know, has China become the sort of new Germany as a countercyclical, if you will, slows? You’ve actually got a recovery in China and maybe this is only the story or the narrative that can run.
For 2025 and everything synchronizes again, but do you get the sense on the price action in China, the price action in commodities, let’s say holding in a range the price action in us, you know showing slowing upside momentums. Do we have this?
Tyler Wood 1:10:19
Mm hmm.
Laurence Balanco, CLSA 1:10:33
Sort of counterbalance and that keeps.
Copper in the trading range, not suggesting major recession, but you’ve got oil because of this.
The supply by potentially coming on from OPEC and the US at the same time having a bigger impact there.
David Lundgren, CMT CFA 1:10:47
Right, right.
Last one we already touched on the dollar I guess, but.
Pressing question is, is Bitcoin an asset class?
Laurence Balanco, CLSA 1:10:59
I definitely think it’s it’s become.
Adopted and considered an acid class.
Now if you ask me three years ago.
David Lundgren, CMT CFA 1:11:06
Yeah.
Laurence Balanco, CLSA 1:11:09
The the questions I would get in meetings always came at the end and that was the PA trade, right?
What do you think of Bitcoin?
But I think you know in meetings now there is more of a consideration, maybe not as a direct investment into Bitcoin, but through all the proxies and listed equities in ways that you can play crypto currencies, not just Bitcoin. At the end of the day. So I do.
Think as an asset class.
It’s here and you know it does does get bigger at at the end of the day.
I have a great chart that I’d I’d like to share. One just highlighting the maturing nature of Bitcoin.
I think one of the best ways I can show this is, you know, everybody talks about the Harding event and some simple economics.
David Lundgren, CMT CFA 1:11:53
Yeah.
Laurence Balanco, CLSA 1:11:55
It takes a fire.
Price should rise and you know every halving event. The rate at which you can mine coins, halves, and you can see the big bull markets that follow those halving events.
But the interesting thing, since the first halving is the diminishing returns or the smaller gains that you make after each halving event.
The way that I’ve looked at it is basically after each halving event, the bull cycle that follows is 1/3 of the cycle before.
So if I take that simple sort of maths on that.
From the Harding events in April 2024, the peak for this cycle should be around 130,000.
David Lundgren, CMT CFA 1:12:36
Alright.
Laurence Balanco, CLSA 1:12:37
If I look at, sorry, go ahead.
Tyler Wood 1:12:38
Lawrence, you’re getting at a point that a lot of brand new entrants to the markets aren’t considering, which is that on a log chart, recent gains in Bitcoin are are actually pretty small compared to those early years.
Laurence Balanco, CLSA 1:12:54
Absolutely.
Tyler Wood 1:12:54
So a big number like $100,000 per Bitcoin attracts a lot of headline attention.
But the market behavior isn’t driven by people who understand the math that.
Laurence Balanco, CLSA 1:13:04
Yeah. Yeah, that’s right.
Tyler Wood 1:13:05
The percentage move hasn’t been as large.
Laurence Balanco, CLSA 1:13:05
But but also I think the other point about Bitcoin and to David’s question about is it an asset class?
I think it is by the maturing nature of the returns.
What’s probably missing is it’s still extremely volatile and I know we sort of if we compare it versus gold, it has much less volatility.
It has much more volatility than gold, so I think.
As the cycle continues to mature, the volatility, I would think does drop off in Bitcoin and you know, one of the first ways that we can try and represent that is through this slowing upside momentum.
There’s also one more point. So I in fact would look at this sell off that you’ve had in Bitcoin back towards you know 75,000 as another opportunity to buy looking for a move up to 130,000.
Tyler Wood 1:13:58
Mm hmm.
Laurence Balanco, CLSA 1:13:59
And one of the the charts that I’ll also try and share with you guys here is I just want to dig it up.
So I don’t sort of speak out of turn.
Is if I compare with the price action from the lows that you made.
In the previous halving event, which was basically back in April or March of 2020, you had the bull market phase and then if you start, you started 20/21 in a similar trading range to how Bitcoin started this year in that trading range between 90 and.
Call it 110,000 in 2021, Bitcoin dropped 50% before recovering by the end of 2021 to set new highs.
Now we obviously haven’t fallen 50%, but the point is you broke down from a similar trading range.
That downside target is basically 75,000.
I would look for some again.
You want to see that stability develop around that 75,000 area to give you a platform to re enter, you know looking for an ultimate move to 130,000 that that’s the way that I’ll be playing this cycle. But I think if you’re talking.
About that halving.
Event and the bullish nature of that cycle.
You know those halving events have always peaked 12 to 18 months after the halving event.
So, you know, end of this year, 130,000 is what I think would be a potential peak in the cycle for for Bitcoin.
David Lundgren, CMT CFA 1:15:34
Fantastic. Well, I I feel like we just had one of our meetings from our Wellington days.
Man, you just you’re always on top of it.
Great insights, always willing to share and you know Tyler will make sure we get the these charts included in in the show notes because they’re really, really instructive as as always. So really appreciate it.
Laurence Balanco, CLSA 1:15:55
No problem.
Appreciate it guys.
Thanks for your time.
David Lundgren, CMT CFA 1:15:57
Yeah.
Tyler Wood 1:15:57
Absolutely. Thank you so much, Lawrence.
And we’ll see you.
We’ll see you this fall in Dubai.
How about that? Awesome.
Laurence Balanco, CLSA 1:16:02
Yeah, that’ll be great.
David Lundgren, CMT CFA 1:16:03
Yeah, that’d be fantastic.
Laurence Balanco, CLSA 1:16:05
Cheers, good.
Tyler Wood 1:16:06
Good. Thanks.
See you soon.
