On Thursday, June 11, 2020, the New York Chapter hosted a panel discussion and virtual happy hour with three distinguished Chartered Market Technicians; Paul Ciana, Dan Russo, and J.C. Parets. This casual-style meeting allotted each presenter 15-20 minutes to share their views on the market environment, with moderator Tyler Wood reading questions from the chat along the way. The last 30 minutes of the meeting was dedicated to any remaining questions and friendly banter between the panelists.
First up to present was Tyler Wood, Managing Director of Global Business Development at the CMT Association. Before introducing the panelists, Tyler discussed some of the major changes the organization is making to exams, chapter meetings, and events as a result of the COVID-19 pandemic. The next exam window for those interested is December 1-15, 2020 and registration is now open.
Dan Russo, co-chair of the NY Chapter and Chief Market Strategist at Chaikin Analytics, was first to present. Dan’s approach combines his firm’s quantitative models, which are primarily driven by fundamental factors, with a top-down technical approach. Dan’s presentation discussed how he is unconvinced that the recent rotation into cyclical stocks and interest rate-related intermarket relationships is the real deal. Given the weak global growth environment, he’s focused the last 15-months or so on owning the growth aspects of the stock market; a strategy that has worked well and he expects it to continue to do so.
In addition to outlining this broader thesis, he outlined several things he would need to see before materially changing his outlook, some of which included the Copper/Gold and Equal-Weighted Consumer Discretionary/Consumer Staples ratios to begin trending higher.
Paul Ciana, the Chief Global FICC* Technical Strategist and Director of Research at Bank of America, was up next. Rather than go through dozens of charts like Dan and JC, he chose to speak off-the-cuff about several of the major themes he’s seeing and questions he’s getting from clients. Before getting into it, he gave three pieces of advice: 1) never show up to a meeting without your charts; 2) hang your CMT Designation proudly, and 3) there’s always a narrative in the market (and more often than not there are two prevailing narratives).
Paul did a great job of explaining why a lot of the recent volatility in the currency space may have been caused by positioning and sentiment unwinds. He notes this is particularly prevalent in several US dollar pairs relative to Emerging Market currencies, such as the South African rand, which are in long-term uptrends but corrected sharply since late March. He discussed other popular FICC*-related topics, such as Bonds, Gold, and Australian Dollar/Japanese Yen, before getting into some of the more obscure relationships, such as the Norwegian Krone/Swedish Krona.
Last up was J.C. Parets, Founder and Chief Market Strategist at All Star Charts. Before jumping into his top-down approach to markets, J.C. reminded us that Technical Analysis doesn’t give us all the answers but it helps us ask the right questions. Throughout his presentation, he shared many of the questions he’s asking about the current market environment.
Is the breakout in the Nasdaq 100 and Technology sector on the verge of failing? Which way is this consolidation in Gold going to resolve? What is the action in Treasury Inflation-Protected Securities vs Treasuries ratio, regional banks vs REITs ratio, and other intermarket relationships saying about interest rates going forward? Finally, he discussed several potential trade setups on the long side that will likely perform well if the broader market doesn’t continue to correct to the downside.
I think I speak for all of the attendees in saying that this meeting was a real treat. If you were unable to attend live, don’t fret, you can access the archived video at staging.cmtassociation.org/video.
Thank you again to Dan, Paul, and J.C. for sharing their insights with us. Look out for another virtual New York Chapter meeting in July!
* FICC is the acronym for fixed income, currencies, and commodities
