Commodities: Bullish
CPO (Palm Oil)
Back to Bull Market Line
Context:
See charts 5-10 in 'CPO Technical Update: Are We Still in a Bull Market Scenario?' (5 May 2024).
See 2 Most Important Data for CPO Fundamentals in 'Geometrical Confluence in Commodity Market Points to Major Reversal in 2024' (25 Jan 2024)
AALI (Astra Agro Lestari)
Selling Climax at equality projection from 7.000 & trendline
Context:
Improve Your Trend Analysis with Elliott Wave pt.2: AALI (19 Mar 2024)
AALI: Great Danger or Great Opportunity? (7 Aug 2023)
BWPT (Eagle High Plantations)
1.450s days (204 weeks) cycle
Small notes in the chart above points to a confluence of 'events' will take place near 24 Jun 2024 (I'm not showing this analysis. You may want to make a note of this date).
Additional context:
Reading Between the Lines of BWPT (19 Jun 2023)
Soybeans, Corn, and Wheat
Synchronized Rise: Soybeans, Corn, and Wheat Making Higher High from 16 April 2024 pivot
Note also the pivot date 16 April 2024 that starts the synchronized move into higher highs. 16 April 2024 is a pivotal date for banking sector when UBS critical trendline is broken.
This link between banking and commodity market is clearly shown in credit spread chart (Option Adjusted Spread) which I have shown in UBS analysis. It is not a coincidence that the beginning of widespread commodity rise is also the beginning of global banking downturn.
Crude Oil, Natural Gas, & Coal
Bullish, Needs Confirmation by Breaking Some Trendlines
The specific break-out I'm looking for is the break-out from this trendline in Natural Gas:
The breakout has not occurred yet. I expect we would get the breakout in this month (June).
Gas breakout would likely be start of crude oil bull market.
It is worth noting that CPO double bottom in June 2023 is also when crude oil made a double bottom.
More detailed analysis for energy market would be conducted after the breakout in natural gas occurs.
Once we have the breakout in natural gas, the probability would be very high that a strong bull market in general commodities is taking place. That would imply a high probability of trend reversal in credit spread which is still at extreme low level.
Banking Sector: Bearish
Investors' capital in Indonesia equity market is heavily concentrated in banking sector. As of April 2024, 23% of IHSG market cap is concentrated in just 4 Indonesia big banks (BBCA, BBRI, BMRI, and BBNI). That means, a sharp drop in these 4 bank stocks would be accompanied by massive capital outflows, which means a sharp IDR downturn.
Big banks don't walk alone. Those who could read the trend in international banking would have the advantage of knowing the big trend of Indonesia banking that is coming. A critical point has occurred on 16 April 2024.
16 April 2024 is the day when UBS trendline is broken.
UBS: 16 April 2024, The Day When The Snowball Starts to Roll
Context:
If you remember, 16 April 2024 was also the day when those 4 Indonesia big banks stocks plunged and IDR weakened. We are only at the start of this big downturn cycle. This is the reason why I titled the UBS analysis as 'the canary'. It's an early indicator.
UBS has rallied, true. But, this rally will soon be over. For the first time after the low of 2022, this rally in UBS is not accompanied by Indonesia banks, which is emerging market big banks. Momentum indicators has also shows divergences in daily and weekly timeframe.
Now, pay close attention to the horizontal lines around 14 CHF. This is my forecast:
When UBS finally breaks that 14 CHF support level, and it will, that's when global banking starts to deteriorate very fast. Probably because of massive defaults. It is very likely, in my view, this phase will occur when commodities mentioned above is in bull frenzy. In Indonesia, that would be the phase where a much larger capital outflow will occur, pushing USD/IDR significantly above 1998 peak. This phase will be accompanied by a sharp increase in 10 year bond yield, and that would trigger another round of default waves. Like I said before in April 2023, 'In times of crises, a lot of money changes hands.'
For completion sake, this is an update of BBCA
BBCA Elliott Wave & Projection
BBCA has just broke through the lower line of ending diagonal pattern. This is just the beginning.
However, if BBCA somehow could get back to 10.400, this wave count is invalid, and I would need to rethink over my perception of global banking. The probability of that happening, I believe strongly, is very, very low. The whole bull trend from GFC 2009 is over.
Wave count context:
Let's bring the second largest Indonesia bank, BBRI.
BBRI Heading Straight Into Roadblock
Notice the sharp down-move in BBRI and the massive volume. Lots of people would think this large volume is a clear bullish sign. They are dead wrong!
Notice the dates in the chart. BBRI is heading straight to the most important pivot point after COVID low. This support is somewhere in September – October 2022. I call this support the Nordstream pivot. You could find this pivot as well in the credit spread above.
What is happening in BBRI is similar to a car speeding into a roadblock. Do not get fooled if a rebound occurs. Pay attention to what happens when a small rebound occurred in early May.
Comments