The Autonomies
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.