Thread by @mosesharding

What’s this week (24-28 August)? Will it be extended last mile rally or set up of “enough is enough” undertone? Is G3 worried on playing “U-win, I-lose” game on equities, when impact on real economy is unreal? Even if search of C-19 vaccine is done, how tough is recovery?...1/N

Despite answers for these doubts is elusive, the going is good so far! NASDAQ in comfort mode at set focus 10850/11000-11350/11500 with intra-week & all-time high punch at 11326 (way above 2019 close 8972 & March 2020 low 6631) with YTD gain of >25% and >70% from C-19 low...2/N

It’s prudent to take monies off the table & avoid chasing extended last mile beyond 11350-11500, and it’s not bad for 2020 when agenda was to survive in the Covid era.

S&P500 punched new high at 3399 from previous base 2950-3000 (against 2019 close 3230 & C-19 low 2189)...3/N

Can S&P500 sustain over 4000 against YTD gain of ~24% and >80% from March low or into cooling mode at 3000/3050-3400/3450 while heat gets build up on US Presidential elections? Risk-light!

DJIA retain sideways momentum at zoom-in focus 27500/27650-28000/28150 (below 28154)...4/N

Can DJIA takeout August high 28154 in its pursuit at last mile 27000-28500/29500 (ahead of all-time high 29568)? While focus at 27500-28500, see higher probability of breakdown with failure to sustain above 2019 close 28538 losing recovery momentum from 2020 low 18213...5/N

US 10Y Treasury volatile (0.50-0.725-0.625%) with most play at lower half of big picture 0.50-0.85%. It’s great 2020 run with YTD appreciation of >70% from 2019 close 1.92% and now into stability as dynamics are neutral between extended pause and last round of 25 bps cut...6/N

Strategy is straight-forward with focus at 0.50/0.575-0.725/0.80%, profit-booking & portfolio-light at lower end and shift from high-value equities to zero-risk Gilts.

While there’s is no visibility of rate hike fear (in 2020-2021), there may be case for 25 bps cut..:7/N

USD Index resilience at 91.50-92.50 is script perfect, up from 92.15 with most play at 92.50-93.50. Don’t see cues to review focus set at 91.50/92.50-94/95, worst case of 90-91.50 is near but kept out of radar for now till clarity on next move on FED Fund rate, pause or cut...8/N

EUR/USD remain sideways at 1.1650/1.1725-1.1925/1.20 retaining breakdown bias into 1.1350-1.15

USD/JPY boxed at zoom-in focus 105-106.50 in sideways mode of comfort range 103.50/104.25-107.25/108

G3 exchange rate stability is now aligned with interest rate equilibrium...9/N

Gold failed again at $2000-2035 with push back into $1900-1935 (2015-1911-1936) but into kind of stability (post swings at 2075-1865-2015) at $1865-1965/2000 not ruling out further value correction towards $1765.

Nothing new on Brent Crude beyond $42.50-42.50/42.75...10/N

India financial markets in mixed sentiments - equities supported by surge in US (now in last mile), collapse in Gilts and nervous ₹ against base building $.

While, negatives emerge from end of rate cut cycle (extended rate pause?) and fear of NPAs heavy on banking sector...11/N

#Nifty sideways mode at 11000/11150-11350/11500 with hold below 11465-11500 is mirror reflection of S&P500 struggle below 4K, and also weighed down by domestic woes. Now, can’t ignore comments of RBI Governor on equities - elevated valuation not reflection of real economy...12/N

#Nifty zoom-in focus retained at 11250/11285-11465/11500 with bias for next breakdown attempt at 11115-11185 enroute to 10850-11000, and it’s not stop/reverse play as yet over 11500 as markets have not yet covered hardening Gilt yields from dilution in rate cut bandwidth...13/N

#banknifty back & forth at 21350/21500-22350/22500 (21403-22419-21886-22344) is script perfect with settle down at upper half 21850-22350!

While comfort remain from lift of strategic base from 16000-17500 to 19500-21000, there’s no cues to shift focus into 22500-23150 ...14/N

Need clarity on NPA impact from post restructured book, impact on investment book from 35-50 bps spike on 10Y yield and earnings impact from top-line contraction.

While retaining big picture focus at 19500/21000-22500/23500, it’s high risk to initiate long over 22500...15/N

It’s bolt from the blue on 10Y bond 5.79% 2030, got pushed from portfolio-unwind and duration-cut zone 5.80-5.825% to 6.125-6.15% post new issue of 5.77% 2030, now down at 6.075-6.10%.

What Next? How far 10Y yield could spike towards 2019 close 6.55% is the call!...15/N

5.79% 2030 big picture is reviewed from 5.65-6% to 6-6.35% ending intra-2020 rally from 6.85% at 5.75% with hope that before operating policy gets lifted up from 3.35% to 4% (from liquidity squeeze), there’s case for cut in Repo rate to arrest overshoot into 6.35-6.50%...16/N

USD/INR sideways momentum at 74.65-75.15 is as per expectation; despite stability here, risk remain for upside break at 75.15-75.50 and thereafter into 75.50-76.50 of rest of 2020 big picture 74.50-77.

EUR/INR reversal from 89.15-90 is fine and!retain focus at 86.50-90...16/N

It’s fantastic YTD return for investors in US markets across asset classes, and significant underperformance of India - negative on equities & currencies and marginal gains on Gilts despite extraordinary monetary measures.

Will it get better when odds against? 🤞...17/17