Winston's Investment Ideas 05 (May 19 - Jul 22)

[winston]

TOL @ Dec 20, 2020

sell the rips.png

Sell The Rip?

The markets have been grinding higher but I'm starting to feel that there's not much "oomph" left in it.

It's as if the traders have all gone for their X'mas holidays and have locked in their profits for the year.

If that is the case, I may need to revisit my strategy to hold my momentum stocks till early January.

And in the meantime. we also have the following:-
1. Rising Covid 19 cases in Europe
2. Record number of Covid19 cases in the US
3. Bird Flu in Korea and Japan. Will it mix with Covid19?
4. Rising Debts, Bankruptcies, Unemployment, Famine, Placements, Rights etc.

Anyway, the consensus view is that:-
1. The markets will continue to grind higher
2. The economies would start to slowly open up from the lockdowns
3. The USD will continue to weaken
4. Interest Rates will remain low
5. The Central Banksters will continue to have unlimited QE
6. Inflation will be under control
7. Biden will provide global stability
etc.

From the above, it's as if the markets are priced for perfection but I cant see any "major risk" at this point in time that can take the markets down.

If Bitcoin can be at US$23,000, why can't your Momentum stocks be trading at a PEG of 4 instead of 2?

And as long as there's a "bigger fool" to buy from you, what is there to worry about? (However, I'm still waiting for that 'bigger fool" to come along to buy some of my counters).

Therefore, if the market does rip over the next week or two, it's very likely that I may use the opportunity to lower my exposure to Equities. (Have a look at the one year chart of your stock to see how much it has recovered since March. I'm also not so good at buying high and trying to sell higher).

For next week, I will be watching the following:-
1. Brexit
2. Dec 21: Tesla's Inclusion into the S&P 500. What are the consequences?
3. What spooked AG William Barr to resign now with just one month to go? What is Trump planning to do?
4. Why is Russia now hacking so many private companies and government departments in the US?


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (22% from 24% last week from 21% two weeks ago, of Liquid Assets)
Goal: 10% exposure to Equities before the next crash; Maximum 40%;

2. To Diversify From Asian Equities: Progress (86% from 87% from 86%)
Goal: To reduce the percentage of Asian Equities to around 60%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. TZA (Inverse Russell 3x)
b. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold/Silver" - Progress (26% from 25% from 26%).
Goal: To be in the safe havens before next recession; (HKD may be pegged)

5. To Reduce Number Of Counters: Progress (21 from 24 from 22)
Goal: To focus on maximum 16 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
c. Heavy exposure to Glove Makers
Goal: To diversify across various Sectors, Countries and Currencies

7. To diversify from "Value" into "Momentum" stocks
Goal: Exposure to 25% Value Stocks only


Market Risk Indicators

1. Euphoria: 8 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 9 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 9 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 6 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 5 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 7 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 85%)


Commodities: Risk-On (Data from Commodities Live every Saturday)

1. WTI Oil - Higher. US$49.06 from US$46.55 last week from US$46.09 two weeks ago;
Support: US$29; Resistance: US$77 (2018);
a. Demand is down about 15%?
b. Supply is also up by about 15%?
c. Crude glut until 4Q 2021?
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1887 from US$1844 from US$1842;
Support: 1780; 1700; 1490; 1240; 1050; Resistance: 1890; 1950: 2015; 2070;
a. They cant print gold
b. In a crisis (cash crunch), gold will also be sold
c. Is Silver a better bet due to the current high Gold/Silver ratio?
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Higher; US$3.64 from US$3.53 from US$3.53;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Risk-On (Data as of Saturday every week)
CNN Fear & Greed Index: 63 from 77 last week from 85 two weeks ago week; Greed

1. US Equities - Higher; 3709 from 3663 last week from 3699 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 3270; 2820; 2740; 1930 (2016); Resistance: 3750
b. No Trade

2. HK Equities - Flat. 26499 from 26506 from 26895;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 24050; 22000; 21600; 19500; 16800
b. Resistance: 28000; 29000; 31600;
c. Sold Alibaba
d. Sold JD.com
e. Sold Tech ETF (3033)

3. Shanghai Equities - Higher; 3395 from 3347 from 3407;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 3600
b. No Trade

4. Spore Equities - Higher; 2849 from 2822 from 2856;
Resistance 3850
a. Added to Riverstone
b. Sold Prime US Reit

5. Japan Equities - Higher. 26763 from 26653 from 26645;
viewtopic.php?f=10&t=7138&start=200
a. Forward PE 13
b. Support 15575 (2016); Resistance; 29 Year High
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. With the stronger Yen, would the Nikkei be correcting?
f. No Trade

6. Malaysian Equities; Lower; 1652 from 1685 from 1608;
viewtopic.php?f=10&t=6292&start=30
a. Short-Selling ban extended to Dec 31, 2020
b. Traded Supermax
c. Sold 1/2 Sports Toto


Currencies: Risk-On (Data from XE.com on Dec 18 @ 2.45 PM)

1. USD to JPY - JPY Stronger; 103.33 from 104.13 last week from 103.96 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Unlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0437 from 3.0303 from 3.0470;
a. Would they devalue the SGD because of the Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7604 from 0.7532 from 0.7420;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China further retaliate against Australia?
viewtopic.php?f=32&t=5256&start=130

4. EUR to USD - EUR Stronger. 1.2255 from 1.2120 from 1.2166;
viewtopic.php?f=32&t=5523&start=100

5. USD to HKD - HKD Strong. 7.7529 from 7.7510 from 7.7509;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
c. Strong HKD: Money flowing into HK, possibly for the IPOs
viewtopic.php?f=32&t=3529&start=40

6. USD to MYR:- MYR Stronger. 4.0391 from 4.0518 from 4.0602;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

7. USD to SGD:- SGD Stronger; 1.3270 from 1.3371 from 1.3325;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catastrophe can wipe them out
c. But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

8. USD to CNY:- CNY Stronger; 6.5404 from 6.5458 from 6.5323;
viewtopic.php?f=32&t=7720&start=90

9. GBP to USD:- GBP Stronger; 1.3549 from 1.3148 from 1.3477;
a. Brexit
viewtopic.php?f=32&t=333&start=80

10. GBP to MYR:- GBP Stronger; 5.4725 from 5.3269 from 5.4728;

11. Dollar Index - USD Weaker; 89.92 from 91.02 from 90.58;
a. Expecting the USD to weaken further
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How much will it drop and for how long?
b. Will they be removing the property curbs?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Irrational Exuberance?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Higher; 0.92% from 0.89% last week from 0.93% two weeks ago

Yield on 2 Year Treasuries - Lower; 0.12% from 0.13% from 0.16%;

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 108.45 from 108.15 from 107.83;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 86.61 from 86.77 from 86.49;

Baltic Dry Index - Higher; 1301 from 1161 from 1189; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


Please Note:-

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The buttom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.

[winston]

TOL @ Dec 27, 2020

rebound.png

The Great Economic Rebound?

Over the past few weeks, I've had friends and relatives, who asked me what are some good "Value" and "Cyclical Stocks" to buy, on the economic rebound, now that we have a vaccine.

Some of them are afraid of missing the boat, especially when they see Casinos, Cruise Companies, Airlines, Hotels etc. rise >25% on news of the vaccines.

My initial reaction is that it's good to take profits on those counters if one was smart enough (or stupid enough) to buy those Airlines, Cruise, Hotels, Casinos etc. before the vaccine news.

And if one did not sell on the "euphoria", others probably will, including those companies themselves through Rights, Placements etc.

Having said that, if stocks markets do move 3 to 6 months before the upturn, then perhaps this could be the time to start monitoring things for the upturn in a few months time, most probably during the end of Summer 2021.

But realistically, when do you think that you would be flying again? If it's for an urgent business meeting, then probably as soon as Covid19 is under control and when you've been vaccinated and given a "Vaccine Passport".

And when would that be? 6 months? And if you are flying for a holiday, when would that be? 6-12 months? So why are you running out to buy those airline stocks now? Can't you see that they would be coming out with their Placements, Rights etc?

Incidentally, as my friend said, if he has a lot of Airmiles and Hotel points, he would be looking for ways to use them now, in case they do go under.

The same argument would go for the Cruise operators. Didn't one of those "Cruise To Nowhere", ended with a positive Covid19 case onboard (which turned negative later). And that Cruise has to return a day earlier, with the passengers spending their last day locked up in their cabin? So when would you be taking a Cruise again?

And what about the Hotels? Maybe they can generate some revenue from the domestic tourists and staycations. But didn't you hear about the Covid19 cases at one of the hotels in Singapore recently? Supposedly, that hotel was also used for quarantine purposes. So when do you think that the hotel operators can break-even?

As for the Casinos, all you need is one case and they would be closing down the place for a while, as seen recently, in one of the local outlet malls near a Casino. For the Macau Casinos, the December revenue is down 75% yoy. So when do you think the mainlanders would be returning to the Macau Casinos? 6 months? One year?

And what about the Shopping Malls? I'm starting to see some people go back to the shopping malls. So maybe those Retail Reits can recover in about 6 months time. In the meantime, I see shops and restaurants closing down in the malls too. And rental is probably going down too.

How about the Office Reits? I think most companies can easily cut their office space by 25% with WFH being the new normal. So when the lease expires, I can see rental space being cut by at least 25%, with a reduction in rentals.

So where is this great rebound that can move Airlines, Cruise Operators, Hotels, Casinos up by >25% in a day?

Anyway, it's timely to remind myself that the stock-market is not the economy. In addition to economic conditions, the stock-market also depends on how much Liquidity and how many "Naive People" is in the system. And we seemed to have a lot of both at this point in time.

So instead of complaining about how life is so unfair to the savers, one might as well join the party but with "eyes wide open".

By the way, the CNN Greed & Fear Index is now at 54. It was at 88 about two weeks back. So it's safer now to be in the markets compared to two weeks ago.

For next week, Santa is supposed to be coming for his rally. And if he is staying away because of Covid19, then I wouldn't want to be holding on to my "Momentum Stocks".


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (21% from 22% last week from 24% two weeks ago, of Liquid Assets)
Goal: 10% exposure to Equities before the next crash; Maximum 40%;

2. To Diversify From Asian Equities: Progress (85% from 86% from 87%)
Goal: To reduce the percentage of Asian Equities to around 60%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. TZA (Inverse Russell 3x)
b. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold/Silver" - Progress (26% from 25% from 26%).
Goal: To be in the safe havens before next recession; (HKD may be pegged)

5. To Reduce Number Of Counters: Worse (22 from 21 from 24)
Goal: To focus on maximum 16 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
c. Heavy exposure to Glove Makers
Goal: To diversify across various Sectors, Countries and Currencies

7. To diversify from "Value" into "Momentum" stocks
Goal: Exposure to 25% Value Stocks only


Market Risk Indicators

1. Euphoria: 7 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 9 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 8 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 6 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 85%)


Commodities: Risk-Off (Data from Commodities Live every Saturday)

1. WTI Oil - Lower. US$48.30 from US$49.06 last week from US$46.55 two weeks ago;
Support: US$29; Resistance: US$77 (2018);
a. Demand is down about 15%?
b. Supply is also up by about 15%?
c. Crude glut until 4Q 2021?
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Lower. US$1883 from US$1887 from US$1844;
Support: 1780; 1700; 1490; 1240; 1050; Resistance: 1890; 1950: 2015; 2070;
a. They cant print gold
b. In a crisis (cash crunch), gold will also be sold
c. Is Silver a better bet due to the current high Gold/Silver ratio?
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Lower; US$3.57 from US$3.64 from US$3.53;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Risk-Off (Data as of Saturday every week)
CNN Fear & Greed Index: 54 from 63 last week from 77 two weeks ago week; Neutral

1. US Equities - Lower; 3703 from 3709 last week from 3663 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 3270; 2820; 2740; 1930 (2016); Resistance: 3750
b. No Trade

2. HK Equities - Lower. 26387 from 26499 from 26506;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 24050; 22000; 21600; 19500; 16800
b. Resistance: 28000; 29000; 31600;
c. Bought Alibaba

3. Shanghai Equities - Flat; 3397 from 3395 from 3347;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 3600
b. No Trade

4. Spore Equities - Lower; 2842 from 2849 from 2822;
Resistance 3850
a. Sold 1/3 Wilmar

5. Japan Equities - Lower. 26657 from 26763 from 26653;
viewtopic.php?f=10&t=7138&start=200
a. Forward PE 13
b. Support 15575 (2016); Resistance; 29 Year High
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. With the stronger Yen, would the Nikkei be correcting?
f. No Trade

6. Malaysian Equities; Lower; 1641 from1652 from 1685;
viewtopic.php?f=10&t=6292&start=30
a. Short-Selling ban extended to Dec 31, 2020
b. No Trade


Currencies: Risk-Off (Data from XE.com on Dec 25 @ 4.00 PM)

1. USD to JPY - JPY Weaker; 103.51 from 103.33 last week from 104.13 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Unlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0545 from 3.0437 from 3.0303;
a. Would they devalue the SGD because of the Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Flat; 0.7606 from 0.7604 from 0.7532;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China further retaliate against Australia?
viewtopic.php?f=32&t=5256&start=130

4. EUR to USD - EUR Weaker. 1.2191 from 1.2255 from 1.2120;
viewtopic.php?f=32&t=5523&start=100

5. USD to HKD - HKD Weaker. 7.7537 from 7.7529 from 7.7510;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
c. Strong HKD: Money flowing into HK, possibly for the IPOs
viewtopic.php?f=32&t=3529&start=40

6. USD to MYR:- MYR Weaker. 4.0605 from 4.0391 from 4.0518;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

7. USD to SGD:- SGD Weaker; 1.3295 from 1.3270 from 1.3371;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catastrophe can wipe them out
c. But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

8. USD to CNY:- CNY Stronger; 6.5252 from 6.5404 from 6.5458;
viewtopic.php?f=32&t=7720&start=90

9. GBP to USD:- GBP Stronger; 1.3553 from 1.3549 from 1.3148;
a. Brexit
viewtopic.php?f=32&t=333&start=80

10. GBP to MYR:- GBP Stronger; 5.5032 from 5.4725 from 5.3269;

11. Dollar Index - USD Stronger; 90.26 from 89.92 from 91.02;
a. Expecting the USD to weaken further
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How much will it drop and for how long?
b. Will they be removing the property curbs?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Irrational Exuberance?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Higher; 0.93% from 0.92% last week from 0.89%two weeks ago

Yield on 2 Year Treasuries - Flat; 0.12% from 0.12% from 0.13%;

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 108.55 from 108.45 from 108.15;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 87.05 from 86.61 from 86.77;

Baltic Dry Index - Higher; 1366 from 1301 from 1161; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


Please Note:-

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The buttom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.

[winston]

TOL @ Jan 3, 2021

January.jpg

The January Effect?

As we are now in January, let's review the "The January Effect" hypothesis.

According to Investopedia, it is a perceived seasonal increase in stock prices. Analysts generally attribute this rally to an increase in buying, which follows the drop in price that typically happens in December, when investors, engaging in tax-loss harvesting to offset realized capital gains, prompt a sell-off.

Beyond tax-loss harvesting and repurchases, as well as investors putting cash bonuses into the market, another explanation for the January Effect has to do with investor psychology.

Some investors believe that January is the best month to begin an investment program or perhaps are following through on a New Year's resolution to begin investing for the future.

Anyway, if you are interested in reading more about "The January Effect", the link is:-
https://www.investopedia.com/terms/j/januaryeffect.asp

As new money would also be flowing into the market from the new month, there should be one spike in the markets early next week. Thereafter, I'm expecting a lull until the beginning of the reporting season, around January 19, 2021.

In the meantime, it would be interesting to watch the events on Jan 6, when the US Electoral Results would be certified. Trump has already called for 1m of his supporters to converge in Washington DC. What does he has up his sleeve for that day? Is that the reason why AG William Barr resigned?

Anyway, I think that even if he declares "Martial Law", I do not really think that the Armed Forces would obey him.

Moving on. In Malaysia next week, the ban on Short-Selling would be lifted. Theoretically speaking, if there are a lot of expiring Call Options at a certain time, the Big Boys push the price of the "mother share" lower at expiry through Short-Selling. It would be interesting to see whether the Malaysian market would be affected by this lifting of the short-selling ban.

As for HK, I would be watching the "Cold War" related stocks. I still have not wrapped my head around the consequences of the Chinese companies being delisted from the US as well as the sanctions on the other Chinese companies that are listed in HK.

It would also be interesting to watch the regulators turn Alibaba, Tencent, JD and Meituan, upside down. I have recently sold Meituan, Alibaba and JD.

Finally, I would like to take this opportunity to wish you all a very Happy 2021! May you all be always Healthy, Wealthy, Happy and Lucky!


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (20% from 21% last week from 22% two weeks ago, of Liquid Assets)
Goal: 10% exposure to Equities before the next crash; Maximum 40%;

2. To Diversify From Asian Equities: Progress (78% from 85% from 86%)
Goal: To reduce the percentage of Asian Equities to around 60%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. TZA (Inverse Russell 3x)
b. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold/Silver" - Progress (26% from 25% from 26%).
Goal: To be in the safe havens before next recession; (HKD may be pegged)

5. To Reduce Number Of Counters: No Progress (22 from 22 from 21)
Goal: To focus on maximum 16 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
c. Heavy exposure to Glove Makers
Goal: To diversify across various Sectors, Countries and Currencies

7. To diversify from "Value" into "Momentum" stocks
Goal: Exposure to 25% Value Stocks only


Market Risk Indicators

1. Euphoria: 7 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 9 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 8 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 6 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 85%)


Commodities: Mixed (Data from Commodities Live every Saturday)

1. WTI Oil - Higher. US$48.44 from US$48.30 last week from US$49.06 two weeks ago;
Support: US$29; Resistance: US$77 (2018);
a. Demand is down about 15%?
b. Supply is also up by about 15%?
c. Crude glut until 4Q 2021?
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1902 from US$1883 from US$1887;
Support: 1780; 1700; 1490; 1240; 1050; Resistance: 1890; 1950: 2015; 2070;
a. They cant print gold
b. In a crisis (cash crunch), gold will also be sold
c. Is Silver a better bet due to the current high Gold/Silver ratio?
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Lower; US$3.52 from US$3.57 from US$3.64;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Risk-Off (Data as of Saturday every week)
CNN Fear & Greed Index: 51 from 54 last week from 63 two weeks ago week; Neutral

1. US Equities - Higher; 3756 from 3703 last week from 3709 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 3270; 2820; 2740; 1930 (2016); Resistance: 3900
b. Bought GDXJ (Junior Gold Miners)

2. HK Equities - Higher. 27231 from 26387 from 26499;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 24050; 22000; 21600; 19500; 16800
b. Resistance: 28000; 29000; 31600;
c. Sold Alibaba
d. Sold Meituan

3. Shanghai Equities - Higher; 3473 from 3397 from 3395;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 3600
b. No Trade

4. Spore Equities - Higher; 2844 from 2842 from 2849;
Resistance 3850
a. No Trade

5. Japan Equities - Higher. 27444 from 26657 from 26763;
viewtopic.php?f=10&t=7138&start=200
a. Forward PE 13
b. Support 15575 (2016); Resistance; 29 Year High
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. With the stronger Yen, would the Nikkei be correcting?
f. No Trade

6. Malaysian Equities; Lower; 1627 from 1641 from1652;
viewtopic.php?f=10&t=6292&start=30
a. Short-Selling ban extended to Dec 31, 2020
b. Bought Supermax


Currencies: Risk-Off (Data from XE.com on Jan 1 @ 2.00 PM)

1. USD to JPY - JPY Stronger; 103.26 from 103.51 last week from 103.33 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Unlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0462 from 3.0545 from 3.0437;
a. Would they devalue the SGD because of the Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7702 from 0.7606 from 0.7604;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China further retaliate against Australia?
viewtopic.php?f=32&t=5256&start=130

4. EUR to USD - EUR Weaker. 1.2130 from 1.2191 from 1.2255;
viewtopic.php?f=32&t=5523&start=100

5. USD to HKD - HKD Stronger. 7.7524 from 7.7537 from 7.7529;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
c. Strong HKD: Money flowing into HK, possibly for the IPOs
viewtopic.php?f=32&t=3529&start=40

6. USD to MYR:- MYR Stronger. 4.0223 from 4.0605 from 4.0391;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

7. USD to SGD:- SGD Stronger; 1.3201 from 1.3295 from 1.3270;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catastrophe can wipe them out
c. But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

8. USD to CNY:- CNY Weaker; 6.5307 from 6.5298 from 6.5252;
viewtopic.php?f=32&t=7720&start=90

9. GBP to USD:- GBP Stronger; 1.3589 from 1.3553 from 1.3549;
viewtopic.php?f=32&t=333&start=80

10. GBP to MYR:- GBP Weaker; 5.4662 from 5.5032 from 5.4725;

11. Dollar Index - USD Weaker; 89.94 from 90.26 from 89.92;
a. Expecting the USD to weaken further
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
a. Cap of 40% for loans to Developers by banks
b. Cap of 32.5% for mortgage loans by banks
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How much will it drop and for how long?
b. Will they be removing the property curbs?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Irrational Exuberance?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Lower; 0.92% from 0.93% last week from 0.92% two weeks ago

Yield on 2 Year Treasuries - Flat; 0.12% from 0.12% from 0.12%

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 108.94 from 108.55 from 108.45;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 87.30 from 87.05 from 86.61;

Baltic Dry Index - Higher; 1366 from 1366 from 1301; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


Please Note:-

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The buttom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.

[winston]

TOL @ Jan 10, 2021

biden.jpg

Front-Running Biden's Programs?

As mentioned last week, I was a bit concerned about the Trump supporters converging on Washington on Jan 6.

Now that they have stormed the Capitol Hills and Trump will be stepping down, things should be less chaotic going forward.

Anyway, the markets were not affected. So probably the machines were buying or people in the know, already knew that it was a non-event.

Now that Trump will be gone in two weeks (if not earlier), it's time to review what Biden would be doing and the things that would be affected by him:-

1. Stimulus Programs / Student Debts:-
The consensus is that Biden would be having a few stimulus programs. "Money for nothing and the checks for free".

2. Infrastructure Program
Now that the Democrats controls all the three pillars, the US$2t Infrastructure program would be driven through.

3. Higher Taxes
To partially pay for the various programs, higher taxes would probably be imposed on wealthier Americans and possibly big corporations especially Big Tech.

4. Interest Rates
The 10 years have been creeping up. Is the Fed now behind the curve? Probably a Non-Event until there's Hyper-Inflation or a collapse in the USD. I think interest rates would stay low for quite some time.

5. Clean Energy Programs:-
The Clean Energy ETFs have been moving up strongly over the past few months in anticipation. Is there still any meat left?

6. Oil / Fracking Industry:-
The consensus is that Biden will be regulating the Fracking Industry to death so oil prices would probably be grinding higher.

7. Covid 19
Initially, there would probably be more lockdowns etc. The consensus is that the pandemic would be over by late Summer 2021.

8. Unemployment
With the anticipated lockdowns, unemployment would probably be higher than anticipated. However, Main Street is not Wall Street, as long as there's plenty of Liquidity sloshing around the system.

9. China
Relationship with China would probably be less chaotic. Biden would probably be using more of the US allies (if any left) to deal with China.

10. Gold
Gold should be grinding higher as long as the USD remains weak, interest rates subdued and the Unlimited QE program continuing.

11. Cash On Sidelines
The consensus is that there's not too much Cash on the sidelines anymore. Whatever Cash that can be deployed, has probably been deployed. And whatever Cash that is left on the sideline now, would probably be not deployed unless there's a full blown depression.

The above are some random thoughts on the various issues. My investment strategy has not changed. I've a higher level of Cash than normal in view of the high valuation of Equities, by whatever measure that you want to use.

However, I would not be too hesitant to deploy my Cash now if I do see a good trading opportunity, since the uncertainty surrounding the US political situation has now been removed.


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (19% from 20% last week from 21% two weeks ago, of Liquid Assets)
Goal: 10% exposure to Equities before the next crash; Maximum 40%;

2. To Diversify From Asian Equities: Progress (77% from 78% from 85%)
Goal: To reduce the percentage of Asian Equities to around 60%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. TZA (Inverse Russell 3x)
b. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold/Silver" - Progress (26% from 25% from 26%).
Goal: To be in the safe havens before next recession; (HKD may be pegged)

5. To Reduce Number Of Counters: Progress (18 from 22 from 22)
Goal: To focus on maximum 16 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
Goal: To diversify across various Sectors, Countries and Currencies

7. To diversify from "Value" into "Momentum" stocks
Goal: Exposure to 25% Value Stocks only


Market Risk Indicators

1. Euphoria: 7 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 9 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 8 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 6 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 85%)


Commodities: Risk-On (Data from Commodities Live every Saturday)

1. WTI Oil - Higher. US$52.72 from US$48.44 last week from US$48.30 two weeks ago;
Support: US$29; Resistance: US$77 (2018);
a. Demand is down about 15%?
b. Supply is also up by about 15%?
c. Crude glut until 4Q 2021?
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1850 from US$1902 from US$1883;
Support: 1780; 1700; 1490; 1240; 1050; Resistance: 1890; 1950: 2015; 2070;
a. They cant print gold
b. In a crisis (cash crunch), gold will also be sold
c. Is Silver a better bet due to the current high Gold/Silver ratio?
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Higher; US$3.69 from US$3.52 from US$3.57;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Risk-On (Data as of Saturday every week)

CNN Fear & Greed Index: 72 from 51 last week from 54 two weeks ago week; Greed

1. US Equities - Higher; 3825 from 3756 last week from 3703 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 3270; 2820; 2740; 1930 (2016); Resistance: 3900
b. Traded GDXJ (Junior Gold Miners)

2. HK Equities - Higher. 27878 from 27231 from 26387;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 24050; 22000; 21600; 19500; 16800
b. Resistance: 28000; 29000; 31600;
c. Bought 3033 (Tech ETF)
c. Sold China Mobile
d. Sold Vinda

3. Shanghai Equities - Higher; 3570 from 3473 from 3397;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 3600
b. No Trade

4. Spore Equities - Higher; 2993 from 2844 from 2842;
Resistance 3850
a. Sold 1/3 Riverstone

5. Japan Equities - Higher. 28139 from 27444 from 26657;
viewtopic.php?f=10&t=7138&start=200
a. Forward PE 13
b. Support 15575 (2016); Resistance; 29 Year High
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. With the stronger Yen, would the Nikkei be correcting?
f. No Trade

6. Malaysian Equities; Higher; 1633 from 1627 from 1641;
viewtopic.php?f=10&t=6292&start=30
a. Short-Selling ban extended to Dec 31, 2020
b. Sold Supermax
c. Traded Hartalega
d. Traded Top Glove


Currencies: Risk-Off (Data from XE.com on Jan 9 @ 7.30 PM)

1. USD to JPY - JPY Weaker; 103.94 from 103.26 last week from 103.51 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Unlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0426 from 3.0462 from 3.0545;
a. Would they devalue the SGD because of the Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7755 from 0.7702 from 0.7606;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China further retaliate against Australia?
viewtopic.php?f=32&t=5256&start=130

4. EUR to USD - EUR Stronger. 1.2224 from 1.2130 from 1.2191;
viewtopic.php?f=32&t=5523&start=100

5. USD to HKD - HKD Weaker. 7.7592 from 7.7524 from 7.7537;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
viewtopic.php?f=32&t=3529&start=40

6. USD to MYR:- MYR Weaker. 4.0329 from 4.0223 from 4.0605;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

7. USD to SGD:- SGD Weaker; 1.3255 from 1.3201 from 1.3295;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catastrophe can wipe them out
c. But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

8. USD to CNY:- CNY Stronger; 6.4754 from 6.5307 from 6.5298 from 6.5252;
viewtopic.php?f=32&t=7720&start=90

9. GBP to USD:- GBP Weaker; 1.3569 from 1.3589 from 1.3553;
viewtopic.php?f=32&t=333&start=80

10. GBP to MYR:- GBP Weaker; 5.4721 from 5.4662 from 5.5032;

11. Dollar Index - USD Stronger; 90.10 from 89.94 from 90.26;
a. Expecting the USD to weaken further
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
a. Cap of 40% for loans to Developers by banks
b. Cap of 32.5% for mortgage loans by banks
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How much will it drop and for how long?
b. Will they be removing the property curbs?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Irrational Exuberance?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Higher; 1.12% from 0.92% last week from 0.93% two weeks ago

Yield on 2 Year Treasuries - Higher; 0.14% from 0.12% from 0.12%

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 109.02 from 108.94 from 108.55;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 97.37 from 87.30 from 87.05;

Baltic Dry Index - Higher; 1606 from 1366 from 1366; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


Please Note:-

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The buttom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.

[winston]

TOL @ Jan 17, 2021

buy_sell_hold.jpg

Buy, Sell or Hold?

The markets have been grinding higher and a few of my friends have been asking me whether it's time to sell, especially when the Covid19 situation is still not under control.

Firstly, I dont really have a crystal ball. So I will discuss the consensus view that the markets should be able to grind higher:-

1. Interest Rates are still low even though the US 10 years have been rising. If it rises for another 50 basis points then I may have to review things.

2. Earnings should be improving in 2H even though there are rolling lock-downs now

3. US Earnings catalyst; Expectations are dialed down as usual and "Actual Earnings" will probably exceed expectations again. Is exceeding expectations enough?

4. Liquidity is plentiful and Biden will have more stimulus programs

5. Sentiment is bullish and there are plenty of new inexperienced investors


In view of the above, it's very likely that I will continue to trade any good ideas. My Cash level is relatively high and my exposure to Equities is still safe.

At the same time, the CNN Greed & Fear Index is elevated, at 67 (Greedy). Everyone seems to be quite complacent and waiting for Biden to throw down his "helicopter money".

I cannot see any risks on the horizon except for the Covid19 rolling lockdowns. And the vaccines seems to be quite safe so far, although there are some deaths here and there. I'm not sure of it's effectiveness though. The US Flu Vaccine last year was only 30% effective.

Over the past few decades and recently in March 2020, whenever I'm complacent and cant see any risks on the horizon, that's the time that I get whacked.

So it's timely to remind myself of the following: "Whoever that the gods want to destroy, they first make him confident".

Finally, Trump has a few more days left. What else would he be doing?


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (26% from 18% last week from 20% two weeks ago, of Liquid Assets)
Goal: 10% exposure to Equities before the next crash; Maximum 40%;

2. To Diversify From Asian Equities: Progress (73% from 77% from 78%)
Goal: To reduce the percentage of Asian Equities to around 60%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. TZA (Inverse Russell 3x)
b. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold/Silver" - Progress (26% from 25% from 26%).
Goal: To be in the safe havens before next recession; (HKD may be pegged)

5. To Reduce Number Of Counters: Progress (24 from 18 from 22)
Goal: To focus on maximum 16 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
Goal: To diversify across various Sectors, Countries and Currencies

7. To diversify from "Value" into "Momentum" stocks
Goal: Exposure to 25% Value Stocks only


Market Risk Indicators

1. Euphoria: 7 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 9 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 8 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 6 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 85%)


Commodities: Risk-Off (Data from Commodities Live every Saturday)

1. WTI Oil - Lower. US$52.06 from US$52.72 last week from US$48.44 two weeks ago;
Support: US$29; Resistance: US$77 (2018);
a. Demand is down about 15%?
b. Supply is also up by about 15%?
c. Crude glut until 4Q 2021?
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Lower. US$1828 from US$1850 from US$1902;
Support: 1780; 1700; 1490; 1240; 1050; Resistance: 1890; 1950: 2015; 2070;
a. They cant print gold
b. In a crisis (cash crunch), gold will also be sold
c. Is Silver a better bet due to the current high Gold/Silver ratio?
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Lower; US$3.60 from US$3.69 from US$3.52;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Mixed (Data as of Saturday every week)

CNN Fear & Greed Index: Greed; 67 from 72 last week from 51two weeks ago week;

1. US Equities - Lower; 3768 from 3825 last week from 3756 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 3270; 2820; 2740; 1930 (2016); Resistance: 3900
b. Bought Silver ETF (SLV)
c. Bought Twitter (TWTR)

2. HK Equities - Higher. 28574 from 27878 from 27231;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 24050; 22000; 21600; 19500; 16800
b. Resistance: 28000; 29000; 31600;
c. Bought China Mobile
d. Bought China Telecom

3. Shanghai Equities - Flat; 3566 from 3570 from 3473;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 3600
b. No Trade

4. Spore Equities - Higher; 3005 from 2993 from 2844;
Resistance 3850
a. No Trade

5. Japan Equities - Higher. 28519 from 28139 from 27444;
viewtopic.php?f=10&t=7138&start=200
a. Forward PE 13
b. Support 15575 (2016); Resistance; 29 Year High
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. With the stronger Yen, would the Nikkei be correcting?
f. No Trade

6. Malaysian Equities; Flat; 1627 from 1633 from 1627;
viewtopic.php?f=10&t=6292&start=30
a. Short-Selling ban extended to Dec 31, 2020
b. No Trade


Currencies: Risk-Off (Data from XE.com on Jan 15 @ 2.00 PM)

1. USD to JPY - JPY Stronger; 103.79 from 103.94 last week from 103.26 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Unlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0447 from 3.0426 from 3.0462;
a. Would they devalue the SGD because of the Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Flat; 0.7755 from 0.7755 from 0.7702;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China further retaliate against Australia?
viewtopic.php?f=32&t=5256&start=130

4. EUR to USD - EUR Weaker. 1.2143 from 1.2224 from 1.2130;
viewtopic.php?f=32&t=5523&start=100

5. USD to HKD - HKD Stronger. 7.7538 from 7.7592 from 7.7524;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
viewtopic.php?f=32&t=3529&start=40

6. USD to MYR:- MYR Weaker. 4.0377 from 4.0329 from 4.0223;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

7. USD to SGD:- SGD Weaker; 1.3264 from 1.3255 from 1.3201;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catastrophe can wipe them out
c. But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

8. USD to CNY:- CNY Stronger; 6.4692 from 6.4754 from 6.5307;
viewtopic.php?f=32&t=7720&start=90

9. GBP to USD:- GBP Stronger; 1.3678 from 1.3569 from 1.3589;
viewtopic.php?f=32&t=333&start=80

10. GBP to MYR:- GBP Stronger; 5.5223 from 5.4721 from 5.4662;

11. Dollar Index - USD Stronger; 90.34 from 90.10 from 89.94;
a. Expecting the USD to weaken further
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
a. Cap of 40% for loans to Developers by banks
b. Cap of 32.5% for mortgage loans by banks
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How much will it drop and for how long?
b. Will they be removing the property curbs?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Irrational Exuberance?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Lower; 1.10% from 1.12% last week from 0.92% two weeks ago

Yield on 2 Year Treasuries - Flat; 0.14% from 0.14% from 0.12%

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Lower: 108.85 from 109.02 from 108.94;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 87.25 from 97.37 from 87.30;

Baltic Dry Index - Higher; 1792 from 1606 from 1366; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


Please Note:-

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The buttom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.

[winston]

TOL @ Jan 24, 2021

Tomorrow.png

A Better Tomorrow?

Trump has left and luckily, there was no untoward incident in his last days.

Now, the focus will be on Biden, especially on his "helicopter money". But he will also need to sort out Covid19.

On that issue, the WHO are now asking people to use "Low Cycle PCR Tests" instead of the "High Cycle PCR tests" that has been used. Supposedly, the "High Cycle PCR Tests" has been showing "false positives".

So the 24m Covid19 cases in the US, could have been much inflated. The New York Times estimated that only 10% of the Covid19 cases are genuine Covid19 infections and the other 90% are "false positives".

Therefore, Biden without doing much, would have less Covid19 infections on his hand, just by switching from "High Cycle PCR Tests" to "Low Cycle PCR Tests".

The Conspiracy Theorists are now asking why the WHO waited for Trump to step down before releasing this new recommendation. Was it to make Trump looked bad in his last weeks if not months?

However, we are now hearing that the UK variant is more infectious & deadly and it would be interesting to see whether the current vaccines are going to be effective against the new UK variant. (In 2019, the flu vaccines in the US was only 30% effective).

Anyway, I'm still expecting the US economy to bounce back by late Autumn 2021. Not that it's going to make any difference to Wall Street as Wall Street is now being controlled by Unlimited QE, Massive Stimulus Programs and plenty of "Robinhoods".

Speaking of 'Robinhoods", now that Bitcoin has lost about 20% ( ~US$200b), how would they be behaving? Would they be selling down Bitcoin or would they be averaging down? And how would the drop in Bitcoin affect the stock-market? And would the "expert" institutional investors eg. Massachusetts Mutual, be selling their bitcoin too?

Although what's happening on Main Street is not being reflected on Wall Street, it's interesting to note that the earnings at the S&P 500 companies, are expected to rise by 24% in 2021 after falling 15% in 2020, according to Refinitiv data as of Jan. 15.

Moving on to relationships, between the US and the rest of the world especially China, it would probably be much better. And it's very likely that China would be buying more US goods and services in the near future.

Finally, for next week, we will have the US Fed Meeting on January 26 and January 27. It would probably be uneventful. They will continue to print money and inflation would be muted for the time being. However, with Yellen as Financial Secretary, the Senate under the Democrats and a falling USD, inflation could creep up later, with the Feds way behind the curve. But that would be a worry for down the road, not now.


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (22% from 26% last week from 18% two weeks ago, of Liquid Assets)
Goal: 10% exposure to Equities before the next crash; Maximum 40%;

2. To Diversify From Asian Equities: Progress (70% from 73% from 77%)
Goal: To reduce the percentage of Asian Equities to around 60%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. TZA (Inverse Russell 3x)
b. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold/Silver" - Progress (26% from 25% from 26%).
Goal: To be in the safe havens before next recession; (HKD may be pegged)

5. To Reduce Number Of Counters: No Progress (24 from 24 from 18)
Goal: To focus on maximum 16 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
Goal: To diversify across various Sectors, Countries and Currencies

7. To diversify from "Value" into "Momentum" stocks
Goal: Exposure to 25% Value Stocks only


Market Risk Indicators

1. Euphoria: 7 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 9 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 8 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 6 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 85%)


Commodities: Mixed (Data from Commodities Live every Saturday)

1. WTI Oil - Lower. US$51.99 from US$52.06 last week from US$52.72 two weeks ago;
Support: US$29; Resistance: US$77 (2018);
a. Demand is down about 15%?
b. Supply is also up by about 15%?
c. Crude glut until 4Q 2021?
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1855 from US$1828 from US$1850;
Support: 1780; 1700; 1490; 1240; 1050; Resistance: 1890; 1950: 2015; 2070;
a. They cant print gold
b. In a crisis (cash crunch), gold will also be sold
c. Is Silver a better bet due to the current high Gold/Silver ratio?
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Higher; US$3.62 from US$3.60 from US$3.69;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Risk-On (Data as of Saturday every week)
CNN Fear & Greed Index: Greed; 69 from 67 last week from 72 two weeks ago;

1. US Equities - Higher; 3842 from 3768 last week from 3825 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 3270; 2237 (Mar 2020); 1930 (2016); Resistance: 3900; 4300
b. No Trade

2. HK Equities - Higher. 29448 from 28574 from 27878;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 24050; 22000; 21600; 19500; 16800
b. Resistance: 28000; 29000; 31600;
c. Traded China Mobile
d. Traded China Telecom
e. Sold HS Tech ETF (3033)

3. Shanghai Equities - Higher; 3607 from 3566 from 3570;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 3600
b. No Trade

4. Spore Equities - Lower; 2992 from 3005 from 2993;
Resistance 3850
a. Bought Manulife Reit
b. Sold some Wilmar

5. Japan Equities - Higher. 28631 from 28519 from 28139;
viewtopic.php?f=10&t=7138&start=200
a. Forward PE 13
b. Support 15575 (2016); Resistance; 29 Year High
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. With the stronger Yen, would the Nikkei be correcting?
f. No Trade

6. Malaysian Equities; Lower; 1597 from 1627 from 1633;
viewtopic.php?f=10&t=6292&start=30
a. Short-Selling ban extended to Dec 31, 2020
b. Traded Supermax


Currencies: Mixed (Data from XE.com on Jan 22 @ 8.45PM)

1. USD to JPY - JPY Flat; 103.77 from 103.79 last week from 103.94 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Unlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Flat; 3.0440 from 3.0447 from 3.0426;
a. Would they devalue the SGD because of the Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Flat; 0.7713 from 0.7755 from 0.7755;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China further retaliate against Australia?
viewtopic.php?f=32&t=5256&start=130

4. EUR to USD - EUR Stronger. 1.2164 from 1.2143 from 1.2224;
viewtopic.php?f=32&t=5523&start=100

5. USD to HKD - HKD Stronger. 7.7525 from 7.7538 from 7.7592;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
viewtopic.php?f=32&t=3529&start=40

6. USD to MYR:- MYR Stronger. 4.0425 from 4.0377 from 4.0329;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

7. USD to SGD:- SGD Weaker; 1.3280 from 1.3264 from 1.3255;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catastrophe can wipe them out
c. But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

8. USD to CNY:- CNY Weaker; 6.4821 from 6.4692 from 6.4754;
viewtopic.php?f=32&t=7720&start=90

9. GBP to USD:- GBP Weaker; 1.3657 from 1.3678 from 1.3569;
viewtopic.php?f=32&t=333&start=80

10. GBP to MYR:- GBP Flat; 5.5202 from 5.5223 from 5.4721;

11. Dollar Index - USD Weaker; 90.25 from 90.34 from 90.10;
a. Expecting the USD to weaken further
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
a. Cap of 40% for loans to Developers by banks
b. Cap of 32.5% for mortgage loans by banks
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Complacent?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Lower; 1.09% from 1.10% last week from 1.12% two weeks ago

Yield on 2 Year Treasuries - Lower; 0.12% from 0.14% from 0.14%

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 109.18 from 108.85 from 109.02;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 87.47 from 87.25 from 97.37;

Baltic Dry Index - Higher; 1837 from 1792 from 1606; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


Please Note:-

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The buttom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.

[winston]

TOL @ Jan 31, 2021

fear1.jpg

Can You Feel The Fear?

The CNN Fear & Greed Index moved from 67 (Greed) last week to 35 (Fear) this week. And according to this index, you are supposed to feel some "Fear" now.

Really, what has changed from last week to this week?

Other than the Gamestop issue (which currently has only a small influence on the big picture), I'm not aware of anything that could have caused this "fear".

Ok, maybe if you are a Hedge-Fund who has been short-selling Gamestop or AMC Entertainment, then you would be feeling some "fear" now.

And the theory is that the Hedge Funds would be required to liquidate whatever they can eg. Bonds, Stocks, Bitcoins, Gold etc., to meet their Margin Calls. And if you have a few Hedge Funds selling quickly to meet their Margin Calls, then that could trigger a correction.

But so what if a few Hedge Funds collapses? Would it really be on the scale of LTCM? And even then, the Central Banksters did managed to reflate the system.

Or maybe you think that Sentiment would be affected when the Reddits and Robinhoods, get slaughtered? Well, they were slaughtered in March 2020 when Oil collapsed and the earth continues to spin.

Or if you are a PRC citizen buying HK stocks with leverage, you would now be feeling some "fear, when the PRC government mopped up the excess liquidity recently. The HK market dropped about 4% last week while the Shanghai market dropped 3.5%.

Or if you have bought Bitcoin right at the top at US$40,000, you would be feeling some fear now. I think that you would have lost about 20% in a very short time. But dont worry, Elon Musk will help push your bitcoin back up, with his tweets.

And speaking about Elon, maybe the selling in Tesla down by 7% recently, is the result of some of these Hedge Funds being caught by the WSB. And isn't a Trailing Stop Loss of 7% being recommended by IBD? BTW, the ARK ETFs has a huge Tesla position.

Or you are now worried with Powell's comment that the US economy is not doing that great. Well, the US economy contracted contracted by $2.2 trillion in 2020, from the first quarter through the second quarter. And the response has been $3 trillion from the Fed (in balance sheet expansion) plus $2.7 trillion in fiscal stimulus from the federal government. And with the Democrats controlling all 3 "Branches Of Power" now, another US$4t of money is on the way.

So I still do not quite understand this "fear" now ...

Anyway, it's timely to note the following saying:-
"There would be 10% drop in the markets every 2 years and a 25% drop every 4 years. If you are prepared for it, then it should not hurt you too much".

So are you prepared for a correction or are you 100% invested in "Ultra Momentum" stocks, thinking that the market can go up forever, with the Unlimited QEs and "Helicopter Money" being thrown around?

As for my "Trading Strategy" for times like this:-

1. If I'm to follow "CANSLIM", I should avoid buying now and sell whatever I have. The "Market Direction" is not in my favor and 70% of the stocks, do move in the direction of the market. And a bear market can last for a year.

2. If I'm a "Contrarian", this is a good time to pick up some fundamentally good stocks for the "medium term". There's still plenty of Liquidity sloshing in the system.

3. If I want to be a "Short-Term Trader", buying fundamentally sound stocks at RSI of <30, should be quite safe, for a 50% retracement.

So what sort of Trader, Speculator, Investor, Gambler etc. are you?

Finally, since it's still US Earnings Season, let's have a look at what is happening. According to FactSet, 86% of the S&P 500 companies that have released results, have topped analysts’ Earnings Estimates and 82% have beat Sales Forecasts.

In fact, the Average Earnings decline for the S&P 500 is now expected to be about 4.7%, which favorably compares to previous estimates for a 9.2% decline.

So US Earnings are not too bad for the time being despite the High Unemployment, Rolling Lockdowns, Covid19 Infections and Deaths, High Bankruptcies etc.


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (22% from 22% last week from 26% two weeks ago, of Liquid Assets)
Goal: 10% exposure to Equities before the next crash; Maximum 40%;

2. To Diversify From Asian Equities: Worse (81% from 70% from 73%)
Goal: To reduce the percentage of Asian Equities to around 60%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. TZA (Inverse Russell 3x)
b. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold/Silver" - Progress (26% from 25% from 26%).
Goal: To be in the safe havens before next recession; (HKD may be pegged)

5. To Reduce Number Of Counters: Worse (26 from 24 from 24)
Goal: To focus on maximum 16 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
Goal: To diversify across various Sectors, Countries and Currencies

7. To diversify from "Value" into "Momentum" stocks
Goal: Exposure to 25% Value Stocks only


Market Risk Indicators

1. Euphoria: 7 (Low: 1; High: 10) - FAANNG, ETFs; Margin Debts; SWFs; Central Banks; Fund Flows;

2. Credit Problems: 9 (Very Good: 1; Very Bad: 10) - Housing, Subprime Auto; Student Loans; Credit Cards; Junk Bonds; EM USD Loans;

3. Recession: 8 (Strong Economy: 1; Depression: 10) - GDP; Taxes; PMI; Housing; Auto; Retail; NAFTA; Trade War; 2019?;

4. Liquidity: 6 (Very Liquid: 1; Tight 10) - QE (Feds, ECB, BOJ, PBOC); Interest Rates; Rotation (Bonds); Asset Shrinkage 2018?; EM; Italy;

5. Inverted Yield: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 8 (Safe 1: Danger 10) PE S&P, Nadsaq; Revenue; USD; Tax Reform; Deregulation

7. Geopolitical Issues: 8 (Peaceful: 1; War: 10) - Iran; South China Sea; Europe; Russia; Saudi Arabia; Iran;

Total: 52 out of 70 (74%); (Safe: 60%; Danger: 85%)


Commodities: Risk-Off (Data from Commodities Live every Saturday)

1. WTI Oil - Higher. US$52.13 from US$51.99 last week from US$52.06 two weeks ago;
Support: US$29; Resistance: US$77 (2018);
a. Demand is down about 15%?
b. Supply is also up by about 15%?
c. Crude glut until 4Q 2021?
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Lower. US$1850 from US$1855 from US$1828;
Support: 1780; 1700; 1490; 1240; 1050; Resistance: 1890; 1950: 2015; 2070;
a. They cant print gold
b. In a crisis (cash crunch), gold will also be sold
c. Is Silver a better bet due to the current high Gold/Silver ratio?
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Copper - Lower; US$3.54 from US$3.62 from US$3.60;
viewtopic.php?f=33&t=5598&p=231237#p231237


Bitcoin: US$33623 (2pm on Jan 30, 2021)


Equities - Risk-Off (Data as of Saturday every week)


CNN Fear & Greed Index: Fear: 35 from 69 last week from 67 two weeks ago;

1. US Equities - Lower; 3714 from 3842 last week from 3768 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 3270; 2237 (Mar 2020); 1930 (2016); Resistance: 3900; 4300
b. Sold Twitter
c. Sold Silver ETF (SLV)

2. HK Equities - Higher. 28284 from 29448 from 28574;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 24050; 22000; 21600; 19500; 16800
b. Resistance: 31600;
c. Bought HS Tech ETF (3033)
d. Bought ASM Pacific
e. Sold China Mobile
f. Traded JD.com

3. Shanghai Equities - Lower; 3483 from 3607 from 3566;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 3600
b. No Trade

4. Spore Equities - Lower; 2903 from 2992 from 3005;
Resistance 3850
a. Bought Keppel Corp
b. Sold 1/2 Riverstone

5. Japan Equities - Lower. 27663 from 28631 from 28519;
viewtopic.php?f=10&t=7138&start=200
a. Forward PE 13
b. Support 15575 (2016); Resistance; 29 Year High
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. With the stronger Yen, would the Nikkei be correcting?
f. No Trade

6. Malaysian Equities; Lower; 1566 from 1597 from 1627;
viewtopic.php?f=10&t=6292&start=30
a. Short-Selling ban extended to Dec 31, 2020
b. Bought Supermax


Currencies: Risk-Off (Data from XE.com on Jan 30 @ 11.30am)

1. USD to JPY - JPY Weaker; 104.68 from 103.77 last week from 103.79 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Unlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Flat; 3.0434 from 3.0440 from 3.0447;
a. Would they devalue the SGD because of the Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.7642 from 0.7713 from 0.7755;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China further retaliate against Australia?
viewtopic.php?f=32&t=5256&start=130

4. EUR to USD - EUR Flat. 1.2137 from 1.2164 from 1.2143;
viewtopic.php?f=32&t=5523&start=100

5. USD to HKD - HKD Weaker. 7.7531 from 7.7525 from 7.7538;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
viewtopic.php?f=32&t=3529&start=40

6. USD to MYR:- MYR Flat. 4.0526 from 4.0425 from 4.0377;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

7. USD to SGD:- SGD Flat; 1.3284 from 1.3280 from 1.3264;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catastrophe can wipe them out
c. But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

8. USD to CNY:- CNY Stronger; 6.4282 from 6.4821 from 6.4692;
viewtopic.php?f=32&t=7720&start=90

9. GBP to USD:- GBP Stronger; 1.3709 from 1.3657 from 1.3678;
viewtopic.php?f=32&t=333&start=80

10. GBP to MYR:- GBP Stronger; 5.5420 from 5.5202 from 5.5223;

11. Dollar Index - USD Stronger; 90.58 from 90.25 from 90.34;
a. Expecting the USD to weaken further
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
a. Cap of 40% for loans to Developers by banks
b. Cap of 32.5% for mortgage loans by banks
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Irrational Exuberance?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Lower; 1.07% from 1.09% last week from 1.10% two weeks ago

Yield on 2 Year Treasuries - Lower; 0.11% from 0.12% from 0.14%

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Lower: 108.40 from 109.18 from 108.85;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 86.97 from 87.47 from 87.25;

Baltic Dry Index - Higher; 1470 from 1837 from 1792; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


Please Note:-

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The buttom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.

[winston]

TOL @ Feb 07, 2021[b/]

Trading Break.jpg

[b]Trading Break

Over the past two weeks, I have missed a few trading opportunities. I was just too slow or was a bit sloppy. That is probably my cue to take a "Trading Break".

One successful trader commented," If I fall to 90% mental efficiency, I start to break-even. Anything below that, I begin to lose money". This trader takes a break every 5 or 6 weeks.

A trading break helps one get a detached view of the market, as well as a fresh look at oneself and how one want to trade going forward.

Sometimes being too close to the forest prevents us from seeing the trees.

Anyway, nothing much has changed from last week except for GameStop, where the Robinhoods are now being slaughtered instead of the Hedge Funds.

And if the Robinhoods start to loose more money, would they then be selling some of their Bitcoins, Tesla stocks, SLV etc.?

I dont think the Robinhoods were buying on margin so probably, there wont be much margin calls. Instead, I think the Robinhoods were buying "out-of-money" call options, as well as a small amount of shares each, to "support the cause".

BTW, someone commented that this "The Gamestop Episode" is actually the beginning of a "Class War" between the "Haves" and "Have-Nots". There's a perception that the current pandemic had made the rich much richer and poor much poorer. And that has created a lot of frustrations among the poor.

Moving on, the following are my random thoughts on the various markets:-
1. US: VIX low; Sloshing in Liquidity; Grinding Higher; Risen 57% since March 2020. So do you still want to chase that US Tech company?
2. HK: Risen 6200 points since March 2020; Do you really want to chase that China Big Tech now? Rolling lockdowns; No Tourists; No Business Travel;
3. Singapore: Yawn Yawn; No Tourists; No Business Travel;
4. Malaysia: Tug-Of-War for Healthcare Glove Makers; Rolling Lockdowns; Emergency; Unstable Politics; No Tourists; Army Of Retail Investors; And everyone here seems to have a tip ..

For next week, we have the "Trump's Impeachment Hearing" on Feb 8. However, he's already an "Out Of Sight, Out Of Mind" guy.


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safer (16% from 22% last week from 22% two weeks ago, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 40%;

2. To Diversify From Asian Equities: No Progress (81% from 81% from 70%)
Goal: To reduce the percentage of Asian Equities to around 60%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. TZA (Inverse Russell 3x)
b. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold/Silver" - Progress (26% from 25% from 26%).
Goal: To be in the safe havens before next recession; (HKD may be pegged)

5. To Reduce Number Of Counters: Progress (19 from 26 from 24)
Goal: To focus on maximum 16 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
Goal: To diversify across various Sectors, Countries and Currencies

7. To diversify from "Value" into "Momentum" stocks
Goal: Exposure to 25% Value Stocks only


Commodities: Risk-Off (Data from Commodities Live every Saturday)

1. WTI Oil - Higher. US$57.08 from US$52.13 last week from US$51.99 two weeks ago;
Support: US$29; Resistance: US$77 (2018);
a. Demand is down about 15%?
b. Supply is also up by about 15%?
c. Crude glut until 4Q 2021?
d. Technical: Buy
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Lower. US$1815 from US$1850 from US$1855;
Support: 1780; 1700; 1490; 1240; 1050; Resistance: 1890; 1950: 2015; 2070;
a. They cant print gold
b. In a crisis (cash crunch), gold will also be sold
c. Technical: Strong Sell
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Silver - US$27.02
a. Attractive "Silver to Gold" ratio
viewtopic.php?f=33&t=10086&start=80

4. Copper - Lower; US$3.64 from US$3.54 from US$3.62;
viewtopic.php?f=33&t=5598&p=231237#p231237


Bitcoin: US$38060 from US$33623 last week (@ 2pm on Feb 5, 2021)
a. No Bitcoin ETF
b. GBTC is a Closed End Fund at 25% premium
viewtopic.php?f=16&t=6175&start=170


Equities - Risk-On (Data as of Saturday every week)

CNN Fear & Greed Index: Greed: 60 from 35 last week from 69 two weeks ago;

1. US Equities - Higher; 3887 from 3714 last week from 3842 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 3270; 2237 (Mar 2020); 1930 (2016); Resistance: 3900; 4300
b. Sold Salesforce (CRM)

2. HK Equities - Higher. 29289 from 28284 from 29448;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 24050; 22000; 21600; 19500; 16800
b. Resistance: 31600;
c. Sold HS Tech ETF (3033)
d. Sold ASM Pacific
e. Sold China Telecom

3. Shanghai Equities - Higher; 3496 from 3483 from 3607;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 3600
b. No Trade

4. Spore Equities - Flat; 2907 from 2903 from 2992;
Resistance 3850
a. Sold Wilmar

5. Japan Equities - Higher. 28779 from 27663 from 28631;
viewtopic.php?f=10&t=7138&start=200
a. Forward PE 13
b. Support 15575 (2016); Resistance; 29 Year High
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. With the stronger Yen, would the Nikkei be correcting?
f. No Trade

6. Malaysian Equities; Higher; 1579 from 1566 from 1597;
viewtopic.php?f=10&t=6292&start=30
a. Short-Selling ban extended to Dec 31, 2020
b. Sold Supermax


Currencies: Risk-Off (Data from XE.com on Feb 05 @ 8.40PM)

1. USD to JPY - JPY Weaker; 105.69 from 104.68 last week from 103.77 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Unlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Flat; 3.0438 from 3.0434 from 3.0440;
a. Would they devalue the SGD because of the Recession?
b. Have the Malaysians working in Singapore, exchanged their SGD to MYR already, for CNY?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.7608 from 0.7642 from 0.7713;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China further retaliate against Australia?
viewtopic.php?f=32&t=5256&start=130

4. EUR to USD - EUR Weaker. 1.1987 from 1.2137 from 1.2164;
viewtopic.php?f=32&t=5523&start=100

5. USD to HKD - HKD Strong. 7.7528 from 7.7531 from 7.7525;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
c. Inflow for IPOs?
viewtopic.php?f=32&t=3529&start=40

6. USD to MYR:- MYR Flat. 4.0701 from 4.0526 from 4.0425;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

7. USD to SGD:- SGD Weaker; 1.3371 from 1.3284 from 1.3280;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catastrophe can wipe them out
c. But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

8. USD to CNY:- CNY Weaker; 6.4706 from 6.4282 from 6.4821;
viewtopic.php?f=32&t=7720&start=90

9. GBP to USD:- GBP Weaker; 1.3687 from 1.3709 from 1.3657;
viewtopic.php?f=32&t=333&start=80

10. GBP to MYR:- GBP Stronger; 5.5707 from 5.5420 from 5.5202;

11. Dollar Index - USD Stronger; 91.39 from 90.58 from 90.25;
a. Expecting the USD to weaken
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
a. Cap of 40% for loans to Developers by banks
b. Cap of 32.5% for mortgage loans by banks
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Irrational Exuberance?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Lower; 1.17% from 1.07% last week from 1.09% two weeks ago

Yield on 2 Year Treasuries - Flat; 0.11% from 0.11% from 0.12%

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 109.05 from 108.40 from 109.18;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 87.39 from 86.97 from 87.47;

Baltic Dry Index - Lower; 1327 from 1470 from 1837; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments


Please Note:-

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The bottom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.

[winston]

TOL @ Feb 14, 2021

Observation.jpg

Observations During Trading Break

As mentioned, I've been on a "Trading Break" and am deliberately not chasing any investment idea unless it's a very convincing one.

I just want to let the world spin while I observe what's happening around me.

The following are some of my random observations:-

1. Risk-Taking is high and a lot of people who are willing to chase a "Momentum Stock" even though it has gone up a few hundred percent in a very short time.

2. Some of them seemed to forget that holding a stock at sky-high valuation is equivalent to buying that stock at the current price. When you have won some of the Casino's money, the money is actually yours already. So thinking that you are playing with the casino's money is false, as you are actually playing with your own money.

3. Some of them do not seemed to know the difference between "Price" vs "Value".

4. And if they do, they seemed to think that they would be able to exit their trade before the reversal (although they have probably being burnt a few times in the past).

5. Most seemed to justify chasing that "momentum stock" by saying that they will "average-down" if their "momentum stock" happened to drop. (Didn't the "experts" tell you not to average-down on a losing position and compound your mistake?).

6. Some people also seemed to think that with the vaccine, the rolling lockdowns would be over soon and that they would again be able to Fly, take a Cruise, go to a Concert etc. (How soon is soon? 4Q 2021? That is still 9 months away. And didn't they tell you in March 2020, that the lockdown would only last for 3 weeks?).

7. Most people also think that interest rate would remained low for a long time. (Have they noticed that the 10 Years has more than doubled from the bottom? Anyway, punishing the Savers and Seniors, is morally wrong).

8. Most people have been brainwashed by the Central Banksters that inflation is low. (Maybe they should spend some time observing the price of daily necessities and also ask what is in that basket of goods that they are measuring for inflation).

9. Most people believed that their backs are being protected by the Central Banksters, with their Unlimited QE programs, of about US$100b a month. When compared to the Daily Turnover of the Stock-Markets, that US$100b is just a few days of Turnover. And if there's a plunge, would the Central Banksters be able to ramp up that "helicopter money" without any unintended consequences?

10. Most people think that the current Liquidity sloshing in the system will remain there for a long time. Global stocks indeed have added more than $6.8t in the past six weeks. How long can this this Liquidity last in a crisis?

11. If the Reddits and Robinhoods, can create a short squeeze, why cant they also gang-up to short a company, commodity, ETF etc.?

12. There has not been much mention of Algos, Quants etc in the past few months. Instead, we were being overwhelmed with news on how smart the Reddits and Robinhoods were. I have a feeling that the machines were also piggy-backing on the momentum trades.

13. If there's so much Liquidity in the system, why is Gold not moving with Bitcoin and Silver? Gold has a market cap of about US$10t versus a market cap of US$1.5t for both Bitcoin and Silver. Gold has a longer history, is in the reserve of the Central Banksters etc. Maybe it's waiting for a tweet from Elon Musk.

14. How good is your information? I have heard people commented that Bitcoin is 99.99% pure gold, the Casinos will be packed soon, the Airlines will be flying to the moon again, Bursabets will be taking down the Investment Bankers soon etc. (It's very important to conserve your energy and not waste your time on unproductive discussions with ignorant people).

For next week, I dont see much happening. China will be coming back online on Thursday so I may want to front-run that China Trade on either Tuesday or Wednesday, if the opportunity presents itself.


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safer (15% from 16% last week from 22% two weeks ago, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 40%;

2. To Diversify From Asian Equities: Progress (79% from 81% from 81%)
Goal: To reduce the percentage of Asian Equities to around 60%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. TZA (Inverse Russell 3x)
b. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold/Silver" - Progress (26% from 25% from 26%).
Goal: To be in the safe havens before next recession; (HKD may be pegged)

5. To Reduce Number Of Counters: Progress (19 from 19 from 26)
Goal: To focus on maximum 16 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
Goal: To diversify across various Sectors, Countries and Currencies

7. To diversify from "Value" into "Momentum" stocks
Goal: Exposure to 25% Value Stocks only


Commodities: Risk-On (Data from Commodities Live every Saturday)

1. WTI Oil - Higher. US$59.72 from US$57.08 last week from US$52.13 two weeks ago;
Support: US$29; Resistance: US$77 (2018);
a. Demand is down about 15%?
b. Supply is up by about 15%?
c. Crude glut until 4Q 2021?
d. Daily Technical: Buy
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1825 from US$1815 from US$1850;
Support: 1780; 1700; 1490; 1240; 1050; Resistance: 1890; 1950: 2015; 2070;
a. They cant print gold
b. In a crisis (cash crunch), gold will also be sold
c. Daily Technical: Sell
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Silver - Higher. US$27.44 from US$27.02 last week
a. Attractive "Silver to Gold" ratio
b. Industrial Demand
viewtopic.php?f=33&t=10086&start=80

4. Copper - Higher. US$3.80 from US$3.64 from US$3.54;
viewtopic.php?f=33&t=5598&p=231237#p231237


Bitcoin: Risk-On; Higher. US$47976 from US$38060 last week from US$33623 two weeks ago (@ 10.50AM on Feb 13, 2021)
a. No Bitcoin ETF yet
b. GBTC is a Closed End Fund at 25% premium
viewtopic.php?f=16&t=6175&start=170


Equities - Risk-On (Data as of Saturday every week)

CNN Fear & Greed Index: Greed: 63 from 60 last week from 35 two weeks ago;

1. US Equities - Higher; 3935 from 3887 last week from 3714 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 3270; 2237 (Mar 2020); 1930 (2016); Resistance: 4300
b. No Trade

2. HK Equities - Higher. 30174 from 29289 from 28284;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 24050; 22000; 21600; 19500; 16800
b. Resistance: 31600;
c. No Trade

3. Shanghai Equities - Higher; 3655 from 3496 from 3483;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 4600
b. No Trade

4. Spore Equities - Higher; 2925 from 2907 from 2903;
Resistance 3850
a. Added to Riverstone
b. Sold Keppel

5. Japan Equities - Higher. 29520 from 28779 from 27663;
viewtopic.php?f=10&t=7138&start=200
a. Forward PE 13
b. Support 15575 (2016); Resistance; 29 Year High
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. No Trade

6. Malaysian Equities; Higher; 1599 from 1579 from 1566;
viewtopic.php?f=10&t=6292&start=30
a. Bought Supermax


Currencies: Risk-On (Data from XE.com on Feb 13 @ 11.00 AM)

1. USD to JPY - JPY Stronger; 104.94 from 105.69 last week from 104.68 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Unlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0511 from 3.0438 from 3.0434;
a. Would they devalue the SGD because of the Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7759 from 0.7608 from 0.7642;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China further retaliate against Australia?
viewtopic.php?f=32&t=5256&start=130

4. EUR to USD - EUR Stronger. 1.2120 from 1.1987 from 1.2137;
viewtopic.php?f=32&t=5523&start=100

5. USD to HKD - HKD Strong. 7.7528 from 7.7528 from 7.7531;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
c. Inflow for IPOs?
viewtopic.php?f=32&t=3529&start=40

6. USD to MYR:- MYR Stronger. 4.0426 from 4.0701 from 4.0526;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

7. USD to SGD:- SGD Stronger; 1.3249 from 1.3371 from 1.3284;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catastrophe can wipe them out
c. But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

8. USD to CNY:- CNY Stronger; 6.4580 from 6.4706 from 6.4282;
viewtopic.php?f=32&t=7720&start=90

9. GBP to USD:- GBP Stronger; 1.3853 from 1.3687 from 1.3709;
viewtopic.php?f=32&t=333&start=80

10. GBP to MYR:- GBP Stronger; 5.6000 from 5.5707 from 5.5420;

11. Dollar Index - USD Weaker; 90.48 from 91.39 from 90.58;
a. Expecting the USD to weaken
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
a. Cap of 40% for loans to Developers by banks
b. Cap of 32.5% for mortgage loans by banks
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Irrational Exuberance?
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228

Yield on 10 Year US Treasuries - Lower; 1.21% from 1.17% last week from 1.07% two weeks ago

Yield on 2 Year Treasuries - Flat; 0.11% from 0.11% from 0.11%

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 109.64 from 109.05 from 108.40;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 87.78 from 87.39 from 86.97;

Baltic Dry Index - Lower; 1313 from 1327 from 1470; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


Please Note:-

The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The bottom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.

[winston]

TOL @ Feb 21, 2021

stock picker.jpg

Stock-Picker's Market?

The markets have been threading water for the past few days. However, if you have picked the correct counter, it can still give you a very good quick return eg. Anhui Conch Cement in HK, which rose about 10% yesterday. (I was lucky to have picked it up late Thursday).

Anyway, I'm starting to take on more risks this week and have increased my exposure to Equities, from about 16% last week to 26% currently. However, it's still at a safe level, as I think the maximum exposure for me in "this type of market" should be around 40%.

My Position Size has also doubled and I should remind myself that whenever I'm confident, that is normally when I get into trouble.

I'm still buying "Value" stocks and not chasing the "Momentum" stocks. Maybe that's because I only know how to analyse "Value" stocks.

I still do not know how to value "Growth", "Momentum" or "Stupidity". If you are offended, I should apologize first. I'm just not as smart as you.

At the same time, outsize returns could come from being in some "stupid" stocks. So I should also invest in some "stupid" stocks once in a while. However, if I'm to do that, I should do the following:-
1. Use ETFs to limit my risk eg. ARKK, ARKW, 3033 (Hang Seng Tech) etc. (The ARK Funds has >7% in Tesla).
2. Limit my exposure of "stupid" stocks, to a maximum of 20% of my portfolio
3. And for the very very "stupid" stocks, I should also watch my "Position Size". A good rule of thumb is to be able to afford losing the entire position without being bothered by it. (And I have actually experienced that a few times already).
4. Use a Trailing Stop-Loss of 7%
5. Force myself to buy after a correction of 25%

Finally, for various reasons, I will no longer be listing out all of my weekly trades in the Equities section. Also, for some of the smaller cap stocks, I need some time to build up my position.


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (26% from 15% last week from 16% two weeks ago, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 40%;

2. To Diversify From Asian Equities: Worse (83% from 79% from 81%)
Goal: To reduce the percentage of Asian Equities to around 60%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. TZA (Inverse Russell 3x)
b. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold/Silver" - Progress (26% from 25% from 26%).
Goal: To be in the safe havens before next recession; (HKD may be pegged)

5. To Reduce Number Of Counters: Worse (27 from 19 from 19)
Goal: To focus on maximum 16 counters from 4 countries at any one time.

6. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities
b. Heavy exposure to Asian Based Currencies
c. Heavy Exposure to Glove Makers eg. Top Gloves, Supermax, Hartalega and Riverstone
Goal: To diversify across various Sectors, Countries and Currencies

7. To diversify from "Value" into "Momentum" stocks
Goal: Exposure to 25% Value Stocks only


Commodities: Risk-On (Data from Commodities Live every Saturday)

1. WTI Oil - Lower. US$59.04 from US$59.72 last week from US$57.08 two weeks ago;
Support: US$29; Resistance: US$77 (2018);
a. Daily Technical: Strong Buy
b. Demand is down about 15%?
c. Supply is up by about 15%?
d. Crude glut until 4Q 2021?
e. Will Biden regulate the Fracking Industry to death?
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Lower. US$1783 from US$1825 from US$1815;
Support: 1780; 1700; 1490; 1240; 1050; Resistance: 1890; 1950: 2015; 2070;
a. Daily Technical: Strong Sell
b. They cant print gold
c. In a crisis (cash crunch), gold will also be sold
d. If Bitcoin is moving on Liquidity, shouldn't Gold be also moving on that same Liquidity?
e. Vested in Gold Coins, GDX and GDXJ
viewtopic.php?f=33&t=8845&p=231236#p231236

3. Silver - Lower. US$27.37 from US$27.44 from US$27.02
a. Attractive "Silver to Gold" ratio
b. Industrial Demand
viewtopic.php?f=33&t=10086&start=80

4. Copper - Higher. US$4.07 from US$3.80 from US$3.64;
a. Is the Global Economy doing that great?
viewtopic.php?f=33&t=5598&p=231237#p231237


Bitcoin: Risk-On; Higher. US$55848 from US$47976 from US$38060 (@ 8.26AM on Feb 20, 2021)
a. No US Listed Bitcoin ETF yet
b. GBTC is a Closed End Fund at 25% premium
c. Cost of Mining Bitcoin: US$5000 to US$8500
viewtopic.php?f=16&t=6175&start=170


Equities - Risk-On (Data as of Saturday every week)

CNN Fear & Greed Index: Greed: 59 from 63 last week from 60 two weeks ago;

1. US Equities - Lower; 3907 from 3935 last week from 3887 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 3270; 2237 (Mar 2020); 1930 (2016); Resistance: 4300
b. Daily Technical: Strong Buy
c. Still elevated; I wont be chasing unless there's a convincing story
d. Even the "Value" stocks have reached the pre-Covid19 level.

2. HK Equities - Higher. 30645 from 30174 from 29289;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 24050; 22000; 21600; 19500; 16800
b. Resistance: 31600;
c. Trading Value counters eg. Sanctioned stocks, HK Real Estate etc.
d. Trading Momentum Techs thru 3033 (Hang Seng Tech Index); Will not chase China Tech at this level
e. Trading Infrastructure companies

3. Shanghai Equities - Higher; 3696 from 3655 from 3496;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 4600
b. Elevated; Will not chase despite their reopening story

4. Spore Equities - Lower; 2881 from 2925 from 2907;
Resistance 3850
a. Focusing on Value Counters
b. I do not see the tourists and business travelers returning that soon
c. Bought Wilmar who will be reporting after-hours on Mon, Feb 22.

5. Japan Equities - Higher. 30018 from 29520 from 28779;
viewtopic.php?f=10&t=7138&start=200
a. Support 15575 (2016); Record High
b. BOJ owns > Half government bonds and 75% of ETFs
c. Breakeven on BOJ's ETF at 19,500
d. Will not be chasing at this level

6. Malaysian Equities; Higher; 1599 from 1579 from 1566;
viewtopic.php?f=10&t=6292&start=30
a. Rotation from Tech to O&G
b. Glove makers still weak despite record profits
c. Bought some Infrastructure Plays
d. Added to IGB. I think that their Commercial Reit IPO will be coming soon.

Currencies: Risk-On (Data from XE.com on Feb 20 @ 9.00 AM)

1. USD to JPY - JPY Weaker; 105.54 from 104.94 last week from 105.69 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Unlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0486 from 3.0511 from 3.0438;
a. Would they devalue the SGD because of the Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.7870 from 0.7759 from 0.7608;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China further retaliate against Australia?
d. Stronger than expected but I wont be investing in any Australian assets anymore
viewtopic.php?f=32&t=5256&start=130

4. EUR to USD - EUR Flat. 1.2122 from 1.2120 from 1.1987;
viewtopic.php?f=32&t=5523&start=100

5. USD to HKD - HKD Strong. 7.7531 from 7.7528 from 7.7528;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
c. Inflow for IPOs?
viewtopic.php?f=32&t=3529&start=40

6. USD to MYR:- MYR Stronger. 4.0395 from 4.0426 from 4.0701;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

7. USD to SGD:- SGD Flat; 1.3251 from 1.3249 from 1.3371;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catastrophe can wipe them out
c. But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

8. USD to CNY:- CNY Stronger; 6.4856 from 6.4580 from 6.4706;
viewtopic.php?f=32&t=7720&start=90

9. GBP to USD:- GBP Stronger; 1.4010 from 1.3853 from 1.3687;
viewtopic.php?f=32&t=333&start=80

10. GBP to MYR:- GBP Stronger; 5.6591 from 5.6000 from 5.5707;
a. Converted some GBP to MYR
b. Will convert the rest next week

11. Dollar Index - USD Weaker; 90.36 from 90.48 from 91.39;
a. Expecting the USD to weaken
viewtopic.php?f=32&t=7616&start=60


Properties:-

1. China Properties:-
a. Cap of 40% for loans to Developers by banks
b. Cap of 32.5% for mortgage loans by banks
viewtopic.php?f=10&t=8150&start=140

2. HK Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7785&start=150

3. Singapore Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=7750&start=210

4. Malaysian Properties:-
a. How much will it drop and for how long?
viewtopic.php?f=10&t=4220&start=200


Others

Market Sentiment - Complacent
viewtopic.php?f=16&t=9099&start=90

Headwinds:-
viewtopic.php?f=16&t=8930&p=231225#p231225

Tailwinds:-
viewtopic.php?f=16&t=8940&p=231226#p231226

Warning Signs:-
viewtopic.php?f=16&t=9909&p=231227#p231227

Risk Management:-
viewtopic.php?f=16&t=7547&p=231228#p231228


Yield on 10 Year US Treasuries - Lower; 1.34% from 1.21% last week from 1.17% two weeks ago

Yield on 2 Year Treasuries - Flat; 0.11% from 0.11% from 0.11%

Interest Rates:-
viewtopic.php?f=16&t=7319&p=221670#p221670

JNK (SPDR Barclays High Yield Bond ETF) - Lower: 109.30 from 109.64 from 109.05;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 87.50 from 87.78 from 87.39;

Baltic Dry Index - Lower; 1770 from 1313 from 1327; Low 290; High 2330 (2013)

Covid19 Notes:-
viewtopic.php?f=25&t=5657&start=150

US Slowdown - How Deep & How Long?
viewtopic.php?f=11&t=9039&start=50

Risks Out There:-
posting.php?mode=reply&f=16&t=8930


Please Note:-

The above is to from help me crystallize my thinking. It's not a recommendation to Buy or Sell. Use the above comments at your own risk and please do feel free to provide me with your kind thoughts and comments

Active Topics - There is an "Active Topics" button on the top right corner.
search.php?search_id=active_topics

Support The Forum - If you have benefited from the ideas in the forum but have not participated in the discussions, we would appreciate your kind support to defray the expenses of maintaining the forum. The bottom is at the top right hand corner.

Second Opinion - Please see the "Second Opinion" thread in the "Services for InvestIdeas Members" section, located just below the Miscellaneous Section.