Antipodean Capital Macro Strategy Daily Nov 9 - Equities rally looking ST stretched near technical resistances. US Homebuilder new collapse a warning sign? Exit Dow Transports long (+5%) and move back to more neutral. Enter US 2-10 flatten

Today’s themes: Homebuilders? Yuk again. Looks like they are resuming their downtrends. Other US equity indices? Probably look a little bit technically overbought, so don’t be surprised to see a week of sideways or downwards action. We will book profits on Transports and watch and wait.

Macro: US Equity cycles: Stocks are greeting the mid-term outcomes favourably. The 3rd Yr cycle validates that view. For today though, ST technical look overbought, expect a pause in the rebound. (Theme: The US equity cycle has had a year of flux, down, up and then down again, but is half way though Q4 and trying to rally, as we expected. Data cycles are probably peaking but EPS/margin trends are still up. The 3rd Yr Presidential cycle is very favourable and supportive for new highs. Most indices are tussling with technical resistances, and ST are overbought after an 8 day rally).

Summary: US stockmarkets passed time last night, & yields & the USD were a tad higher, after the Fed left rates unchanged as expected. Commodities continued to soften, with Oil now down 20% from its peak, and precious metals slightly softer, primarily due to a rise in the USD. The US 2-10 curve has held this week’s flattening, suggesting that markets see less Trump stimulus post mid-terms as growth/inflation negative.

New trades: Enter US 2-10 curve flatteners at 26bps/35bps risk 40bps target 10bps. Exit long Dow Transports from 10175 at 10660 (+5%).
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.
EQUITIES: Long ASX All Ordinaries Top 100, Short ASX Small Ordinaries at 0.81x ratio. Exit long Dow Transports from 10175 at 10660 (+5%). Long Ashares at 2602 risk 2520 target 2800. Sell Homebuilders 755/800 risk 850 target 650.
COMMODITIES. Long Silver short Gold at 83.9x risk 87 target 65.