Eoin Treacy's view
In writing Crowd Money I used the companies we refer to as Autonomies as a way
of highlighting how the confluence of various macro, behavioural, fundamental
and pricing factors create major investment themes.
In compiling my presentation for the Contrary Opinion Forum, which takes place at the Basin Harbor Club in Vermont this week, I clicked through the constituents of this group of companies to get a feeling for how current events are affecting the constituents. Here are some of the most notable charts:
Starbucks, Nu Skin Enterprises, Twenty-First Century Fox, Nike, Tata Consultancy, WPP, Mastercard, Boeing, EADS, Honeywell, United Technologies, Ecolab and Illinois Tool Works have all rallied particularly impressively over the last few months and have developed short-term overbought conditions. At a minimum, trailing stops are appropriate on at least part of a long position since the potential for mean reversion is increasing.
Generally speaking the, the alcoholic beverages sector has been ranging in the region of the 200-day MA for the last few months as it consolidates its earlier powerful advance and potentially offers an example of what may be in store for some of the above shares.
Unilever, McCormick, Allergan, Dairy Farm International, Eli Lilly, IBM, Hewlett Packard, SAP, Potash Corp of Saskatchewan, Exxon Mobil and BHP Billiton are all trading below their respective 200-day Mas. They will need to sustain moves back above their trend means to reassert medium-term demand dominance.
In the soft drinks sector, Coca Cola has returned to test the progression of higher reaction lows while Pepsi is testing the region of the MA. Elsewhere, Danone, P&G, L'Oreal, Colgate Palmolive and Rolls Royce among others are trading in the region of their trend means.
LVMH, H&M, Inditex, BMW, Christian Dior, Amazon, BBVA, Uni-Charm, Hengan International, Siemens, Schlumberger and DuPont rallied to break out of their respective medium-term ranges last week and while there is some room for consolidation, clear downward dynamics would be required to suggest failed breaks.
In preparing for the Contrary Opinion Forum, I am acutely aware of the irony of my book which is unabashedly optimistic, being released at a time when the market looks more likely to fall or range than to rally significantly from here. It is for this reason that I couched my forecasts on the assumption that the period beyond 2015 would represent a post QE era where the confluence of revolutions in energy, technology and healthcare as well as improving governance in the world's population centres result in a secular bull market for equities.