The Sunday CharterN° 22Semaine close le 6 septembre 20266 minutesrevision 1
This week, none of the five markets changes state. The clearest move comes from commodities, which widen their lead over their underlying trend further, while Bitcoin consolidates its recent shift into Constructive, still above its long trend. Equities, gold and bonds remain where they were, each in its own reading.
Commodities remain clearly above their long-term orientation, and their lead has widened further.
Gold and government bonds remain below their underlying trend: neither has yet managed to settle back above its underlying trend.
Bitcoin confirms its recent shift into Constructive: its distance above its long trend widens further.
Equities keep their nuanced reading: well above their underlying trend, but without having regained robustness.
The strength of commodities also warrants watching: if it persists, it could in time feed further price tensions.
The five markets at a glance
Equities
Transition
The market remains well above its long trend, but its reading has not firmed and stays in Transition. The distance to the trend narrowed slightly this week, without being enough to shift the regime.
Treasuries
Under pressure
Bonds remain below their long-term orientation, in continuation of previous weeks. The settled return above this trend, which would restore reach to their role as a buffer, has not occurred.
Gold
Under pressure
Gold still moves below its underlying trend and remains Under pressure. The lasting recovery that would reopen the hypothesis of a rebound has not happened; the improvement outlined two weeks ago therefore remains invalidated for now.
Commodities
Constructive
Commodities confirm their position well above their long trend, and this gap has widened further. It is the most pronounced underlying move among the five markets this week.
Bitcoin
Constructive
Bitcoin consolidates its recent shift into Constructive and remains well above its underlying trend. The relapse that would have placed it back into indecision has not occurred, and its distance to the trend has even widened.
The chart of the week
The commodities curve set against its underlying trend, over the period shown
Scroll the chart sideways, or read it in words below.
The curve starts lower at the beginning of the period shown, rises on the whole and ends at its highest points. The long-term trend marker, drawn as a dotted line, follows a less pronounced upward slope; the curve holds above it and the gap widens towards the end of the period.
Over the period shown, the curve rises and holds above the long-term trend marker, drawn as a dotted line alongside it. The gap between the two does not close; if anything, it tends to widen towards the end of the period.
Commodities respond in particular to real economic activity and to supply strains. An advance that holds and widens over its underlying trend is the most pronounced regime signal among the five markets this week.
The curve says nothing about the week ahead. The dotted marker is calculated over the period shown and stops at the last point: it is not a projection. Marked strength can also revive price tensions that would later weigh elsewhere.
The markets
Equities barely moved this week and remain in Transition.
They still sit clearly above their long-term orientation, but their gap to that orientation has narrowed. Participation therefore remains the main point to watch, and that is what keeps the reading in between.
What would change the reading A broadening of participation would restore firmness to the reading, whereas a continued narrowing would weaken it further.
Government bonds edge lower and remain Under pressure.
They stay below their long-term orientation, and the gap has widened further. As long as this awaited return above does not occur, their ability to resume their traditional role as a shock absorber remains limited.
What would change the reading A return settled above this underlying orientation would restore reach to their role as a buffer.
Gold gives up a little ground and remains under pressure.
It sits below its long-term orientation, and the gap has widened rather than narrowed. The recovery that would have placed it back above its underlying trend, mentioned earlier, has not materialized: no sign of a return above its long trend has appeared yet.
What would change the reading A lasting rebound placing it back above its long trend would reopen this hypothesis.
Commodities advance further and hold their constructive state.
Their lead over their multi-month orientation has widened, and this state has held without interruption for several weeks. Such a settled strength deserves attention: it carries the clearest signal of the week, without implying that it will continue at the same pace.
What would change the reading A return below their long-term orientation would tip this reading.
Bitcoin advances and confirms its constructive state.
Its gap above its underlying trend has widened, extending the move begun after the pivot was validated the previous week. The position gains footing, but the underlying move is merely stabilizing above the recently crossed threshold, without anything irreversible being secured.
What would change the reading A slide back below this recent threshold would return the market to the indecision it has just left.
The discipline of the week
The week therefore asks nothing new. It is a reminder that the most visible strength, that of commodities, also carries the risk that it may eventually weigh elsewhere. An already strong advance is watched more than it is celebrated.
Witan Way is an independent, rules-based investing education platform. Nothing published constitutes personalised investment advice, a solicitation, or a recommendation to buy or sell. Capital is at risk. © Witan Way.
