Antipodean Capital Macro Strategy Daily Jan 23 - Stocks have marked an end to the 4 week corrective rebound with an exhaustion peak. Earnings season positives are coming to a close and growth concerns are persisting. Sell OIl, buy $CAD.

Technicals: US stocks: The 12-14% rebound in US stocks looks like it is over, with failure and reversals from within 50/200 day averages. As we outlined yesterday, only a rise back through 200 day averages and new highs above those seen on the Nov rally will see stocks regain the technical initiative. For now a more negative outlook is required into next week as long as this week’s highs are not breached, with a 4-5% minimum correction lower likely.

Equities: EM stocks: Our chart look today notes a worrying reversal in most EM equity markets from their 3mth highs which raises the risk of a decline back to their lows. EMFX are also starting to weaken, asking whether EM contagion risks take a leg up again somehow?
Commodities: Oil & Copper formed bearish key reversal days down yesterday, implying their upwards run from 4 week lows is over and set to pause.

Summary: Stock & bond markets finally changed ST trend last night, with tariff talk vacillations, the end of earnings season approaching, and growth negative news out of China and the IMF yesterday all weighing on growth assets. A ST peak for stocks, bond yields and commodities looks in place and now we should see at least half of the recent 4 week gains retraced. The USD may also turn down, helping precious metals.

New trades: Sell WTI at 52.70 risk 54 target sub 49. buy $CAD at 1.3350 risk 1.3250 target 1.40.
FX: Short $JPY at 107.50 risk 110. Long EUR$ at 1.1360 risk 1.1260 target 1.18. Short NZDJPY at 72 risk 75. Long JPYKRW at 9.85 risk 9.76 target 10.30
BONDS: Long 2 units ASX Banks 5yr CDS at 54bps, target 140. Long NZ 10s short NZ 2s at 104bps risk 130bps target 50bps. Sold Portugal 10yr bought German Bund at 158bps, risk 110bps target 350bps. Bought US 10’s at 2.91% risk 3.1% target 2.6%. Sold HYG at 83.55 risk 85 target 80.
EQUITIES: Long ASX All Ordinaries Top 100, Short ASX Small Ordinaries at 0.81x ratio. Short US Banks Index at 93.25 risk 100 target 80. Stay short Dow Transports at 10375 risk 10800 target 8000. Bought Feb VIX at 20.2.
COMMODITIES. Long Silver short Gold at 83.9x risk 87 target 65. Long Silver 14.08 risk 13.85 target 14.80+. Bought Gold at 1243 risk 1230 target 1300.