Antipodean Capital Macro Strategy Daily Nov 12 - The equity rally turns down at key resistance points, downside risk for this week. Sell A Share longs, R2K, AUDJPY, buy the VIX.

Today’s themes: Today we swing things around even further. After booking profits on stock longs Friday, we swing back to holding more shorts, and add some bearish risk trades in FX.

Macro: US Equities & growth trades: Stocks turned down after posting ST momentum extremes on Friday. Our sense is that this week will see further downwards pressure, and only once we see how that pans out will we be able to ascertain where the balance of forces – bullish or bearish - lies. (Theme: US
equities are at the greatest over valuation extreme in US equity history. The Fed are hiking and policy is now tight given where core inflation is, not easy. Data cycles are probably peaking. However, EPS/margin trends are still up. The 3rd Yr Presidential cycle is very favourable and supportive for new highs and US data is still at cycle high, implying strong growth still. Coming weeks will tell whether October’s swoon is the start of something more worrying, or whether stocks will make new highs. Stay tuned).

Summary: US stock markets reversed from 8 days of gains Friday, as overstretched technicals and tech stock weakness weighed on sentiment. While mid-terms are out of the way, a potential US-China trade solution remains weeks away, & the Fed remain keen to hike in Dec. The US 2-10 curve flattened via lower 10yr yields, Oil remains under the pump, while in FX the USD rose. JPY cross rates look near a peak.

New trades: Sell A Share longs from 2602 at 2598 (-0.2%). Sell R2K at 1550 risk 1575 target 1450. Sell AUDJPY at 82.20 risk 83 target 78.
FX: Short EURSTG at .9010 risk .9150 target .84. Long AUDNZD 1.0750 target 1.12 stop 1.05. Short USD Index at 96.17 risk 97 target 94. Buy JPYKRW at 10.17/9.90 risk 9.60 target 13. Long GBP 1.2770 risk 1.27 target 1.33.
BONDS: Long 2 units ASX Banks 5yr CDS at 54bps, target 140. Long NZ 10s sell NZ 2s at 104bps risk 130bps target 50bps. Sold Portugal 10yr bought German Bund at 158bps, risk 110bps target 350bps. Long US 2-10 curve flatteners at 26bps/35bps risk 40bps target 10bps.
EQUITIES: Long ASX All Ordinaries Top 100, Short ASX Small Ordinaries at 0.81x ratio. Short US Homebuilders at 755 add at 800 risk 850 target 650.
COMMODITIES. Long Silver short Gold at 83.9x risk 87 target 65.