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Our Best Charts and Calls of 2019

Last week we published the 2019 End of Year Special Edition of the Weekly Macro Themes report - a summary of some of the best, worst, and most notable charts of 2019 (and the ones to watch in 2020).

This article brings you a look at what I think is one of the most important sections of the report, simply called: "Charts That Worked".

Basically it's a summary of the best calls and charts of the year - either where the chart itself nailed the case (long/bullish or short/bearish) or where it was a major piece of the puzzle in a key investment or macro call. It's an important exercise to go through, not only from a performance standpoint, but also because it helps shed light on some of the key themes and moving parts for global markets in the year ahead.

Keep an eye out for part 2 of this article - the other side of the coin (the worst charts!), or download the report and check it out for yourself.

Format note: each chart has a comment on the chart, the date when it first appeared, and a quote from the original report which it appeared in.

1. Back at the start of the year this was one of about a dozen sentiment/flows/positioning charts that helped lay out the bullish case for equities (along with the market breadth and valuations picture). Getting equities right this year was a key call, and the charts made it possible.

(25 Jan 2019) “The Euphoriameter combines the signals from the AAII II surveys, the VIX, and the forward PE ratio - basically a combination of market based and survey-based sentiment metrics. The key point is the high contrast between the start of 2018 (euphoria) vs the start of 2019 (dysphoria).”

Investor sentiment chart

2. This indicator helped identify how overzealous central banks drove global equity markets into a correction (and pushed the global economy to the brink). Subsequently it helped identify the global monetary policy pivot.

(25 Jan 2019) “the elephant in the room is monetary policy. Looking only at (this) chart you could pretty much say that the global equity market correction was driven by the transition to monetary policy tightening (banks hiking rates went from the minority to the majority) ... This is the part where we get to find out how sensitive the global economy really is to tighter (less easy) monetary policy. With the growth scare, perhaps a global pause/re ease is needed.”

monetary policy and global equities

3. Gold (part 1): The first rumblings of the gold breakout showed up in this chart which helped identify the breach of the downtrend channel and the compression in implied volatility which preceded the surge in the gold price.

(15 Feb 2019) “the downtrend channel (from 2011), this is at risk of being breached to the upside (an upside breakout) - notably the near record-low in gold implied volatility means an upside breakout could end up being explosive since volatility crunches have a tendency to precede large moves.”

gold volatility chart

4. Gold (part 2): the gold ETF flows chart was a key element in flipping bearish on gold (sentiment, positioning, flows, valuations became stretched, overhead resistance came into focus, and real yields rebounded off a key level). At the time that was quite a tough and lonely call to make - as the best ones often are.

(6 Sep 2019) “Add to that the crowded longs and heavy ET