Ape with Crayons - April 2025

Monthly Market Pulse through the Charts

May 10, 2025

What are the charts telling us this month?

Technicals tell a story, an ape who dismisses charting as mumbo jumbo is the clown in the house
- Taro Sakamoto

Parameters: 10-Yr Weekly Charts  
-> 50 Week-Moving Average (Orange)  
-> 200 Week-Moving Average (Blue)  
-> RSI (Top Panel), MACD (Middle Panel), Stochastic RSI (Bottom Panel)  
-> Valuation Bands (Average, +-1&2 Standard Deviation)

Very interestingly, sentiment remains as bearish as the first week of April BUT positioning remains bullish (put/call ratio nears range lows yet again)

Decision Points - US exceptionalism is all the same trade (USD/DXY, Mag 7, US/World, Tech/World and Semiconductors to a certain extent). Right now, they either reclaim long term support or lose it (which would signal durable regime shift)

USD at critical long-term support, breakdown would suggest decisive shift out of US (denominated) assets
Mag 7 looking to reclaim 50WMA
US/World, Tech/World and Semiconductors also at long-term support (200WMA)

On the flip side, if US exceptionalism (which has served as a liquidity vortex for global assets in the last 15 years) unwinds, rest of world and especially emerging markets stand to gain from an asset re-allocation + growth perspective

In so far as macro tailwinds are concerned, the trifecta of cheap USD, cheap oil, and China stimulating have historically been massive for EM growth

Rest of World except India testing 10-yr downtrend (200WMA) from below, potential inflection and regime shift

Gold/S&P is taking a breather, very extended short-term. My guess is we see 3,500 tested again for a near term blow-off top

Tactically, that would be a good point to trim

However, the longer-term structural reserve asset share gain thesis + monetary inflation hedge is only in the 3rd inning in my opinion…

What has continued to surprise me is the strength of industrial-linked commodities amidst a recessionary outlook/narrative. Copper bottom?

Commodities always sell-off heading into a recession, but recover as we are in a recession (ie. it is often predictive!)
On the margins, 13-years of underinvestment in mining have also raised the soft floor on prices
Weakening USD also helps