Credit Suisse Analyst Is 'Putting It Crudely'

In a new report, Credit Suisse analyst David Sneddon took a look at global markets from a technical perspective to try and determine where they are headed from here. Here are 10 charts that Sneddon discussed in the report.

1. Oil

Despite the recent bounce off lows, Sneddon remains bearish on oil, calling for an eventual bottom in Brent prices somewhere between $40.95 and $34.55.

2. Commodities

Sneddon believes that commodity prices are “due a bounce,” but maintains a bearish medium-term outlook.

3. Emerging Markets

For traders worrying about China, Sneddon sees the fates of oil and emerging market equities as closely tied for the time being, and both are likely headed lower from here.

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4. China

When it comes to China specifically, Sneddon looked back to the 2009 collapse for an indication of further downside. He now calls for a further 22 percent drop in the Shanghai Composite.

5. Developed Markets

Developed markets are not immune to the global weakness either. Sneddon sees downside to the MSCI EM/Developed ratio after it recently broke below support levels dating back to 2006.

6. Risk

In terms of risk appetite, Sneddon is watching for a bullish MACD cross before he will be convinced that a new low has been established.

7. Bonds

The global equity/bond ratio appears to be breaking out to the downside as investors shift to safety.

8. Equity Market Top

According to Sneddon, developed market equities have avoided a medium-term top so far, but the death cross in the MSCI World Dev is a bad sign.

9. S&P 500

The same can be said about the S&P 500, which is also at risk of a top after forming a death cross pattern. However, Sneddon pointed out that market bulls can identify similarities between the recent market action and the 2011 pullback.

10. Rate Hike

Finally, Sneddon points out that a 2–11 percent decline in the stock market is typical of the beginning of a FOMC tightening cycle, but that decline does not necessarily indicate the end of a bull market.