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

[winston]

TOL @ May 10, 2020

Moving Parts.jpg

Too Many Moving Parts?

The US markets were "mysteriously" strong again this week despite the bad US unemployment numbers.

They are behaving as if this Covid19 has disappeared and that this "US Great Opening" will quickly bring back the lost Revenues, Earnings and Jobs.

Either that or an "Invisible Hand" is manipulating the indices.

As mentioned last week, one needs to control only 7 stocks in the US and 3 stocks in HK, to manipulate the indices.

My gut feel tells me that it's the latter.

Do you really believe that an army of "Pyjamas Traders" can moved the Nasdaq with such fury?

And if you are not a "Pyjamas Trader" but a "Rational Medium Term Investor', would you really be chasing this rally at this point in time?

Even if you are short the markets, would you really be covering your positions at the beginning of a Recession (or Depression)?

In view of the above, I still believed that the markets are quite uninvestable for a few months, although there could be some isolated "Trading Opportunities".

If one did not managed to sell before the markets plunged in Feb, it's probably a good time to sell.

If one did managed to sell before the plunge in Feb., this is probably not the right time to chase the rally, unless one is convinced that one has a huge "margin of safety".

I'm reminded of the same feeling now, that I had in mid February, 2020. At that time, the markets were rising everyday. And everyday, I would feel like a fool for not chasing that rally.

Suddenly, on Feb 24, 2020, the crash started. It dropped 12% for 7 straight days before the first rebound.

Do you not feel like that fool now, for not chasing this rally?

Anyway, I think that there's too many moving parts now, so it does not hurt to be a bit more conservative:-
1. Unlimited QE: Unintended Consequences, Moral Hazard esp. Junk Bonds
2. Food: Inflation, Inadequate Supply, Exports Restrictions etc.
3. Blame Game: Sanctions; Restrictions On Capital; Miscalculation leading to War?
4. Recession: Strike, Riot, Civil Disobedience, Crime, Social Disorder etc. Manipulation; etc.
5. Commodities: Deflation leading to "Inadequate Supply" later?
6. Stock Market: Withdrawals: Retirees, SWFs; Margin Calls; PPT Manipulation etc. Im
7. High Debt: When will they be hit?
8. Currency Risk: When will they be hit, especially Emerging Markets?
9. Politics: Rhetoric; Nationalism; Racism; Decline of Globalisation, Immigration & Travel;
10. Covid19: Mortality low; 280,000 deaths out of 8b; Mutating; Rolling Lockdowns;

Finally, it's interesting to read between the lines of what Buffett said at his AGM ie. he could not find anything attractive to buy. If the greatest mind in investing, cannot find anything attractive to buy, who am I to disagree with him?


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (11% from 13% from 14%, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 25%;

2. To Diversify From Asian Equities: Progress (77% from 74% from 68%):
Goal: To reduce the percentage of Asian Equities to around 50%

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" - No Progress. (Around 26%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: No Progress (13 from 16 from 16)
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
Goal: To diversify across various Sectors, Countries and Currencies


Market Risk Indicators

1. Euphoria: 9 (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: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 9 (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: 55 out of 70 (79%); (Safe: 60%; Danger: 85%)


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

1. WTI Oil - Higher. US$24.62 from US$19.70 last week from US$17.19 two weeks ago;
Support: Resistance: US$29; US$45 (R1); US$77 (2018);
a. Demand is down about 30%? With Reopening, +15%?
b. Supply is up about 20%? Current cut -20%?
c. Price is down about 50%? How low can it go?
d. China is filling it's SPR
e. US is renting their SPR storage out, to the private companies
f. Not too much storage space left on Oil tankers and Railcars
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Lower. US$1705 from US$1710 from US$1746;
Support: $1240; $1050; Resistance: $1775; $1830;
a. They cant print gold
b. Gold will probably rally after the current physical selling
c. In a crisis (cash crunch), gold will also be sold
d. 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$2.42 from US$2.31 from US$2.36;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Risk-On/b] [(Data as of Saturday every week)

1. US Equities - Higher; 2930 from 2831 last week from two weeks ago;
a. Support: 1930 (2016); Resistance: 3385
b. Sold SQQQ (Nasdaq Inverse 3x)
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 24230 from 24644 from 23831;
a. Support: 22000; 21600; 19500; 16800
b. Resistance: 29000; 31600;
c. Bought Cosco Shipping Energy (1138)
d. Sold CNOOC (0883)
e. Sold 7500 (Inverse Hang Seng ETF)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher; 2895 from 2860 from 2860;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 2592 from 2624 from 2518;
Resistance 3850
a. Sold Silverlake Axis
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 20179 from 19619 from 19262;
a. Forward PE 13
b. Support 15575 (2016); Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Lower; 1382 from 1408 from 1370;
a. No Trade
viewtopic.php?f=10&t=6292&start=30


[b]Currencies: Risk-On (Data from XE.com on May 8 @ 2.00 PM)

1. USD to JPY - JPY Stronger; 106.41 from 106.92 last week from 107.51 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Umlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0600 from 3.0357 from 3.0608;
a. Would they devalue the SGD because of the coming Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.6527 from 0.6420 from 0.6393;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China retaliate against Australia?
d. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9220 from 0.9087 from 0.9108;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Stronger; 2.8219 from 2.7585 from 2.7876;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.0842 from 1.1074 from 1.0792;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Stronger. 7.7507 from 7.7609 from 7.7505;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
c. Converted some HKD to MYR recently
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.3204 from 4.2969 from 4.3603;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

9. USD to SGD:- SGD Stronger; 1.4125 from 1.4154 from 1.4245;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catatrophe can wipe them out; But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 7.0722 from 7.0624 from 7.0818;
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Weaker; 1.2392 from 1.2500 from 1.2367;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Weaker; 5.3563 from 5.3711 from 5.3926;

13. Dollar Index - USD Stronger; 99.73 from 99.08 from 100.38;
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 long 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:-
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 - Higher; 0.69% from 0.62% last week from 0.61% two weeks ago

Yield on 2 Year Treasuries - Lower; 0.16% from 0.20% from 0.22%;

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

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 98.40 from 96.96 from 96.62;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 79.75 from 78.68 from 78.32;

Baltic Dry Index - Lower; 514 from 617 from 665; 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:-

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viewtopic.php?f=26&t=3168

[investar]

TOL @ May 10, 2020

The US markets were "mysteriously" strong again this week despite the bad US unemployment numbers.

They are behaving as if this Covid19 has disappeared and that this "US Great Opening" will quickly bring back the lost Revenues, Earnings and Jobs.

Either that or an "Invisible Hand" is manipulating the indices.

As mentioned last week, one needs to control only 7 stocks in the US and 3 stocks in HK, to manipulate the indices.

My gut feel tells me that it's the latter.

Do you really believe that an army of "Pyjamas Traders" can moved the Nasdaq with such fury?

And if you are not a "Pyjamas Trader" but a "Rational Medium Term Investor', would you really be chasing this rally at this point in time?

Even if you are short the markets, would you really be covering your positions at the beginning of a Recession (or Depression)?

In view of the above, I still believed that the markets are quite uninvestable for a few months, although there could be some isolated "Trading Opportunities".

If one did not managed to sell before the markets plunged in Feb, it's probably a good time to sell.

If one did managed to sell before the plunge in Feb., this is probably not the right time to chase the rally, unless one is convinced that one has a huge "margin of safety".

I'm reminded of the same feeling now, that I had in mid February, 2020. At that time, the markets were rising everyday. And everyday, I would feel like a fool for not chasing that rally.

Suddenly, on Feb 24, 2020, the crash started. It dropped 12% for 7 straight days before the first rebound.

Do you not feel like that fool now, for not chasing this rally?

I Agree 100% that the stock markets are decoupling (a lot) from the real economy at this moment.
And it is probably a very good idea to take profits off the table, as valuations are high.
On the other hand, there is a lot of money flowing to the markets...
Moneyprints in all markets are working double shifts, and the number of new online trading accounts is peaking
And a few niches in the market could probably (even in the May go away month) keep on going strong/rallying, like:

covid19 related stocks (vaccine? quarantine compliance? cure? testing? online? delivery services?)
(junior) gold and silver exploration companies (and miners)

[winston]

And a few niches in the market could probably (even in the May go away month) keep on going strong/rallying, like:
1. covid19 related stocks (vaccine? quarantine compliance? cure? testing? online? delivery services?)
2. (junior) gold and silver exploration companies (and miners)

Hi investar,

Thanks for your kind comments.

Yes, I have been trying to follow the various treatments for Covid19 as well as the potential vaccine players eg. GILD, MRNA etc. over the past few months.

Unfortunately, they are beyond my circle of competence and I would be really shooting in the dark, if I do decide to put any money on them.

The same goes for the Junior Miners. They are also beyond my circle of competence.

However, I have been following GDX and FNV for a while now. I sold FNV a few weeks ago and I have not bought any gold shares recently.

I think that there would be some more physical selling of gold by the lower segment of society, due to the bad economic situation, as witnessed in Thailand and India recently.

I think that it will also take some time for the "Unlimited QE" to affect gold prices going forward. Hopefully, I would be smart enough to pick some up when they are start trending upwards later, due to stagflation and maybe geopolitical issues.

Thanks and take care,
Winston

[winston]

TOL @ May 17, 2020

Waiting.png

Waiting?

The markets have not really gone anywhere this week, despite trillions being continuosly pumped into the markets and the economy.

So, isn't this a good selling opportunity then?

Or is the FOMO so great, that one must buy on this dip?

Anyway, most of the states in the US have already reopened, the earliest being, about 20 days ago.

Therefore, in about two to three weeks, we will know whether a "Second Wave" will be resurfacing in the US.

In the meantime, it's interesting to note that Trump and his supporters, are walking around without a mask. And my understanding is that if somehow, Trump and Pence is brought down by the Covid19, Nancy Pelosi that would be President.

Anyway, I think that this Covid19 may not be going away so fast. Total deaths around the world is only about 300,000 now, out of the world's population of around 8 billion.

That means that the world's most populated countries have not being really being hit badly eg. India, Bangladesh, Pakistan, Indonesia, Brazil, Mexico etc.

And if we cannot control this Covid19 by October, a Third Wave could return during winter.

By the way, the US "Stimulus Checks" will be expiring in September, so it will not surprised me, if they will extend the "helicopter money" till November, the time of the US Presidential Election.

On the horizon, we have the following:-
1. Parliament Meeting in Malaysia on May 18; No "No-Confidence" Vote on the program
2. Parliament Meeting in China on May 22; Targeted Stimulus Program

In view of the above, I have no choice but to wait for things to play out. There's really nothing much to buy nowadays and shorting the markets would also not be a good idea as the PPT and the Central Banksters, are throwing everything they have at the markets.

Trying to buy some "Dividends Stocks" is also a bit dangerous. I dont want to suddenly end up with a 15% loss while trying to chase a yield of 5%.


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (12% from 11% last week from 13% two weeks ago, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 25%;

2. To Diversify From Asian Equities: Worse (78% from 77% from 74%):
Goal: To reduce the percentage of Asian Equities to around 50%

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" - No Progress. (Around 26%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: No Progress (13 from 13 from 16)
Goal: To focus on maximum of 12 counters from 4 countries at any one time.

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


Market Risk Indicators

1. Euphoria: 9 (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: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 9 (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: 55 out of 70 (79%); (Safe: 60%; Danger: 85%)


Commodities: Mixed (Data from Commodities Live every Saturday)

1. WTI Oil - Higher. US$29.71 from US$24.62 last week from US$19.70 two weeks ago;
Support: Resistance: US$29; US$45 (R1); US$77 (2018);
a. Demand is down about 30%? With Reopening, +15%?
b. Supply is up about 20%? Current cut -20%?
c. Price is down about 50%? How low can it go?
d. China is filling it's SPR
e. US is renting their SPR storage out, to the private companies
f. Not too much storage space left on Oil tankers and Railcars
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Higher. US$1753 from US$1705 from US$1710;
Support: $1240; $1050; Resistance: $1775; $1830;
a. They cant print gold
b. Gold will probably rally after the current physical selling
c. In a crisis (cash crunch), gold will also be sold
d. 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$2.33 from US$2.42 from US$2.31;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Risk-Off/b] [(Data as of Saturday every week)

1. US Equities - Lower; 2864 from 2930 last week from 2831 two weeks ago;
a. Support: 1930 (2016); Resistance: 3385
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 23797 from 24230 from 24644;
a. Support: 22000; 21600; 19500; 16800
b. Resistance: 29000; 31600;
c. Sold Cosco Shipping Energy (1138)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower; 2868 from 2895 from 2860;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 2524 from 2592 from 2624;
Resistance 3850
a. Bought Silverlake Axis
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Lower. 20037 from 20179 from 19619;
a. Forward PE 13
b. Support 15575 (2016); Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1403 from 1382 from 1408;
a. No Trade
viewtopic.php?f=10&t=6292&start=30


[b]Currencies: Risk-Off (Data from XE.com on May 16 @ 9.30AM)

1. USD to JPY - JPY Weaker; 107.04 from 106.41 last week from 106.92 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Umlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0481 from 3.0600 from 3.0357;
a. Would they devalue the SGD because of the coming Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Weaker; 0.6415 from 0.6527 from 0.6420;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China retaliate against Australia?
d. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Weaker; 0.9157 from 0.9220 from 0.9087;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Weaker; 2.7911 from 2.8219 from 2.7585;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Weaker. 1.0820 from 1.0842 from 1.1074;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.7513 from 7.7507 from 7.7609;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
c. Converted some HKD to MYR recently
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.3508 from 4.3204 from 4.2969;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

9. USD to SGD:- SGD Weaker; 1.4274 from 1.4125 from 1.4154;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catatrophe can wipe them out; But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 7.1022 from 7.0722 from 7.0624;
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Weaker; 1.2106 from 1.2392 from 1.2500;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Weaker; 5.2671 from 5.3563 from 5.3711;

13. Dollar Index - USD Stronger; 100.40 from 99.73 from 99.08;
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 long 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:-
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; 0.64% from 0.69% last week from 0.62% two weeks ago

Yield on 2 Year Treasuries - Lower; 0.15% from 0.16% from 0.20%;

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

JNK (SPDR Barclays High Yield Bond ETF) - Lower: 97.13 from 98.40 from 96.96;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Lower; 78.71 from 79.75 from 78.68;

Baltic Dry Index - Lower; 407 from 514 from 617; 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.
viewtopic.php?f=26&t=3168

[winston]

TOL @ May 24, 2020

Long Game.png

The Long Game?

The US markets spiked up at the beginning of the week and didn't go anywhere thereafter. It's as if the US market, is waiting to see what the damage will be, from the "Great US Reopening".
In the meantime, there's about 39m unemployed Americans and the Nasdaq is up 3% YTD.

In contrast, HK had a huge drop yesterday on the new security law that was introduced by China. That came out from nowhere and caught everyone by surprise. However, when people gets emotional and wants to sell, it's then not a bad time to do some shopping, especially when the counters are China related and has nothing to do with HK eg. China Life, China Mobile, China Mengniu, Meituan, Cofco Meat etc.

At the same time, the US listed China based companies, got whacked on the new bill. Luckily, I had anticipated this event and have sold my SINA and 3/4 of my Weibo. More importantly, I have abstained from buying any US listed China companies eg. BABA and JD (which will have a secondary listing in HK soon).

As mentioned, there are currently too many moving parts and it's a mine-field out there. If one is not careful, one can be blown up to pieces, in this type of market. Hence, I have been extra careful and being very conservative.

Anyway, some of my trader friends have been laughing at me as I have not been doing much trading, while they have been continuing to make a few percent, here and there.

I have told them that my intention is to play the long game at this point in time. I need to survive these few months, so that I'm in a good position to ride out any sustainable upside later.

That means that I will not be chasing any rallies eg. Oil Companies and Glove Makers in Malaysia, Tech in the US or even REITS in Singapore. However, I may buy any deep plunge eg. in HK yesterday, if I'm convinced that it's overdone, for a quick swing trade.

It also means that I will be keeping my Cash level very high ie. around 80% in the meantime. In the Sub-Prime Crisis in 2007, things did dropped for about 18 months and I dont think that it would be that different this time.

Finally, there was an article a few weeks ago that mentioned that the time to buy is "PEAK VIX + 75 days" and that time is around June 15, 2020. I'm not sure about that date anymore due to the "US Great Reopening".


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Worse (18% from 12% last week from 11% two weeks ago, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 25%;

2. To Diversify From Asian Equities: Worse (85% from 78% from 77%):
Goal: To reduce the percentage of Asian Equities to around 50%

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" - No Progress. (Around 26%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Worse (19 from 13 from 13)
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
Goal: To diversify across various Sectors, Countries and Currencies


Market Risk Indicators

1. Euphoria: 9 (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: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 9 (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: 55 out of 70 (79%); (Safe: 60%; Danger: 85%)


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

1. WTI Oil - Higher. US$33.41 from US$29.71 last week from US$24.62 two weeks ago;
Support: Resistance: US$29; US$45 (R1); US$77 (2018);
a. Demand is down about 30%? With Reopening, +15%?
b. Supply is up about 20%? Current cut -20%?
c. Price is down about 50%? How low can it go?
d. China is filling it's SPR
e. US is renting their SPR storage out, to the private companies
f. Not too much storage space left on Oil tankers and Railcars
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Lower. US$1735 from US$1753 from US$1705;
Support: $1240; $1050; Resistance: $1775; $1830;
a. They cant print gold
b. Gold will probably rally after the current physical selling
c. In a crisis (cash crunch), gold will also be sold
d. 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$2.39 from US$2.33 from US$2.42;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Mixed/b] [(Data as of Saturday every week)

1. US Equities - Higher; 2955 from 2864 last week from 2930 two weeks ago;
a. Support: 1930 (2016); Resistance: 3385
b. Sold SINA (SINA)
c. Sold 1/2 Weibo (WB)
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Lower. 22930 from 23797 from 24230;
a. Support: 22000; 21600; 19500; 16800
b. Resistance: 29000; 31600;
c. Bought China Mobile
d. Bought AIA
e. Bought China Life
f. Bought China Mengniu
g. Bought Cofco Meat
h. Bought Meituan
i. Bought 7200 (Hang Seng ETF 2x)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Lower; 2813 from 2868 from 2895;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Lower; 2500 from 2524 from 2592;
Resistance 3850
a. Added to Silverlake Axis
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 20388 from 20037 from 20179;
a. Forward PE 13
b. Support 15575 (2016); Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1437 from 1403 from 1382;
a. No Trade
viewtopic.php?f=10&t=6292&start=30


[b]Currencies: Risk-On (Data from XE.com on May 23 @ 4.15 PM)

1. USD to JPY - JPY Weaker; 107.65 from 107.04 last week from 106.41 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Umlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0623 from 3.0481 from 3.0600;
a. Would they devalue the SGD because of the coming Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.6536 from 0.6415 from 0.6527;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China retaliate against Australia?
d. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9313 from 0.9157 from 0.9220;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Stronger; 2.8515 from 2.7911 from 2.8219;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.0898 from 1.0820 from 1.0842;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Weaker. 7.7569 from 7.7513 from 7.7507;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
c. Converted some HKD to MYR recently
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Weaker. 4.3634 from 4.3508 from 4.3204;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

9. USD to SGD:- SGD Stronger; 1.4249 from 1.4274 from 1.4125;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catatrophe can wipe them out; But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 7.1292 from 7.1022 from 7.0722;
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.2173 from 1.2106 from 1.2392;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.3116 from 5.2671 from 5.3563;

13. Dollar Index - USD Weaker; 99.86 from 100.40 from 99.73;
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 long 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:-
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 - Higher; 0.66% from 0.64% last week from 0.69% two weeks ago

Yield on 2 Year Treasuries - Higher; 0.17% from 0.15% from 0.16%;

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

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 100.29 from 97.13 from 98.40;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 81.23 from 78.71 from 79.75;

Baltic Dry Index - Higher; 498 from 407 from 514; 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.
viewtopic.php?f=26&t=3168

[winston]

TOL @ May 31, 2020

AAR.jpg

After-Action Review (AAR)

The US Market has gone up by more than 30% since it's low, that was reached on March 23, 2020.

At the same time, "Main Street" is in very bad shape, with more than 40m unemployed Americans and many SMEs going bankrupt.

And with the riots going on in various US cities, with no "Social Distancing", the conditions on "Main Street" can't be getting better for a while.

In addition, "Main Street" is also not being helped by the White House, who has decided to have a "Cold War" with China.

Anyway, this huge disconnect between "Wall Street" and "Main Street", has enabled many "pyjamas traders" to make some money. It does not matter that Airlines, Cruise Companies, Banks, Energy Companies, Casinoes etc are losing money. As long as their share price is going up (maybe due to short-covering), the "pyjamas traders" would be there.

Personally, I have friends who are now telling me that the US Market is a "Day Trader's Heaven" and some of these people have never traded the US markets before. And it does not matter that some of them are sleeping only 4 hours a night.

And closer to home, we have seen the Glove Makers rose by more than 300% in Malaysia in 2.5 months, the REITs rebounding strongly in Singapore, the Malaysian Property Companies flying just last Friday, HK's Tech companies defying gravity eg. Tencent, Meituan, Xiaomi etc.

Therefore, it's probably time to do an AAR (After Action Review):-
1. What did we do right and should continue to do?
2. What did we do wrong and should try to improve upon?

In my case, I was right to protect my capital else I could be in deep trouble. And I was probably wrong to stay away from the markets and not to trade them like the "pyjamas traders".

I was also wrong to connect "Wall Street" strongly to "Main Street", as "Wall Street" is being distorted by the massive "Liquidity" injected by the Central Banksters (Central Bank Gangsters) and the Plunge Protection Teams (PPTs).

So where do we go from here? I think that the markets could be hitting Resistance soon. However, I'm fully aware that I could be wrong again. So if there is any special situation, I may take some risk and trade that situation.

Last week, I have also started to trade Bull Calls and Bear Puts, on the Hang Seng again. These are highly leveraged (+30x) and extremely dangerous. Therefore, I always have a "Mental Stop Loss" when trading them, as well as a "Time Limit" if I'm losing money on them.


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Progress (15% from 18% last week from 12% two weeks ago, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 30%;

2. To Diversify From Asian Equities: No Progress (85% from 85% from 78%):
Goal: To reduce the percentage of Asian Equities to around 50%

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" - No Progress. (Around 26%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Progress (15 from 19 from 13)
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
Goal: To diversify across various Sectors, Countries and Currencies


Market Risk Indicators

1. Euphoria: 9 (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: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 9 (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: 55 out of 70 (79%); (Safe: 60%; Danger: 85%)


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

1. WTI Oil - Higher. US$35.34 from US$33.41 last week from US$29.71 two weeks ago;
Support: Resistance: US$29; US$45 (R1); US$77 (2018);
a. Demand is down about 30%? With Reopening, +15%?
b. Supply is up about 20%? Current cut -20%?
c. Price is down about 50%? How low can it go?
d. China is filling it's SPR
e. US is renting their SPR storage out, to the private companies
f. Not too much storage space left on Oil tankers and Railcars
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Flat. US$1732 from US$1735 from US$1753;
Support: $1240; $1050; Resistance: $1775; $1830;
a. They cant print gold
b. Gold will probably rally after the current physical selling
c. In a crisis (cash crunch), gold will also be sold
d. 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$2.44 from US$2.39 from US$2.33;
viewtopic.php?f=33&t=5598&p=231237#p231237


Equities - Mixed/b] [(Data as of Saturday every week)

1. US Equities - Higher; 3044 from 2955 last week from 2864 two weeks ago;
a. Support: 2820; 2740; 1930 (2016); Resistance: 3130; 3385
b. Sold Goldman Sachs (GS)
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 22961 from 22930 from 23797;
a. Support: 22000; 21600; 19500; 16800
b. Resistance: 29000; 31600;
c. Bought CSPC Pharma (1093)
c. Sold China Mobile (0941)
d. Sold China Life (2629)
e. Sold China Mengniu (2319)
f. Sold Meituan (3690)
g. Sold 7200 (Hang Seng ETF 2x)
h. Traded AIA (1299)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher; 2852 from 2813 from 2868;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Higher; 2511 from 2500 from 2524;
Resistance 3850
a. Bought SGX
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 21878 from 20388 from 20037;
a. Forward PE 13
b. Support 15575 (2016); Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1473 from 1437 from 1403;
a. No Trade
viewtopic.php?f=10&t=6292&start=30


[b]Currencies: Risk-On (Data from XE.com on May 30 @ 3.20 PM)

1. USD to JPY - JPY Weaker; 107.80 from 107.65 last week from 107.04 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Umlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Stronger; 3.0792 from 3.0623 from 3.0481;
a. Would they devalue the SGD because of the coming Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.6668 from 0.6536 from 0.6415;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China retaliate against Australia?
d. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9414 from 0.9313 from 0.9157;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Stronger; 2.8987 from 2.8515 from 2.7911;
a. The range is 2.20 (2008) to 3.41 (2017)

6. EUR to USD - EUR Stronger. 1.1106 from 1.0898 from 1.0820;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Stronger. 7.7512 from 7.7569 from 7.7513;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
c. Converted some HKD to MYR recently
viewtopic.php?f=32&t=3529&start=40

8. USD to MYR:- MYR Stronger. 4.3475 from 4.3634 from 4.3508;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

9. USD to SGD:- SGD Stronger; 1.4119 from 1.4249 from 1.4274;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catatrophe can wipe them out; But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 7.1371 from 7.1292 from 7.1022;
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.2350 from 1.2173 from 1.2106;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.3692 from 5.3116 from 5.2671;

13. Dollar Index - USD Weaker; 98.34 from 99.86 from 100.40;
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 long 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:-
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; 0.65% from 0.66% last week from 0.64% two weeks ago

Yield on 2 Year Treasuries - Lower; 0.16% from 0.17% from 0.15%;

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

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 102 from 100.29 from 97.13;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 82.42 from 81.23 from 78.71;

Baltic Dry Index - Higher; 504 from 498 from 407; 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.
viewtopic.php?f=26&t=3168

[winston]

TOL @ June 7, 2020

Green Shoots.jpg

Green Shoots of Recovery?

The "US Employment Statistics" released yesterday, rose stunningly by +2.5m for the month of May, versus an expectations of -8.3m (a difference of 10.8m jobs!).

Trump prompty held a news conference and took credit for the increase in employment. The Dow then rose 830 points for the day. It's as if the whole thing was carefully choreographed.

Having said that, Boeing has been rising for a few days, together with the Airline, Cruise, Banking and Energy stocks. So the rise in the US markets cant be only from the covert work of the Plunge Protection Teams. (It could be due to the desperate covering by the shorts).

So is Covid19 really over and are there really green shoots sprouting all over the place?

IMHO, I think that the US economy is indeed slowly recovering from the lockdown. The people are starting to go outside to enjoy the summer and along the way, they could also be spending some of money.

However, I think the markets have run quite a bit ahead of the fundamentals on "Main Street".
It's very bad on "Main Street" and many SMEs are closing down, from the one two punch of the Covid19 and now, the Riots.

However, using "Main Street" to predict the direction of "Wall Street" is probably futile, for the short term. Perhaps for the longer term, there could be some direct coorelation between "Main Street" and "Wall Street".

So where does that leave us? Do we chase the rally, sell into the rally, short, hold or walk away?

Intuitively, I think that one has to be a very disciplined in this type of market:-
1. Sell some of your shares if they have recovered a lot from the bottom
2. Do not chase the rally unless you have a very convincing story
3. Buy only when there's a sharp drop, for the technical rebound
4. Hold if the valuation are still reasonable and the story is still convincing
5. Wait for the "M" to form first before shorting heavily
(As you get older, you tend to repeat things)

By the way, it's almost 5 weeks since Georgia reopened and we have not seen a "Second Wave". Maybe this Covid19 is really under control in the US.

However, with the various protests in the US now, we will be able to confirm in another week, whether this Covid19 episode is really over in the US.

Intuitively, I think that the Covid19 cases is already declining in the US. However, it's now starting to surface in Latin Amercia eg. Brazil and Mexico. And it still has not significantly affected the other densely populated countries eg. India, Pakistan, Bangladesh and Indonesia.

It will also be Winter soon in the Southern Hemisphere and it would be interesting to see whether Covid19 would be spreading there, in the cold weather.

And on n the horizon, we have the following:-
1. Jun 9 & 10: FOMC Meeting; Probably Non-Event
2. Jun 10 & 12: G7 Meeting; Central Banksters plotting "Next Steps"


Weekly Risk Management Progress Report:-

1. To Monitor NET Exposure To Equities (Long Less Shorts):- Safe (11% from 15% last week from 18% two weeks ago, of Liquid Assets)
Goal: 5% exposure to Equities before the next crash; Maximum 30%;

2. To Diversify From Asian Equities: Progress (83% from 85% from 85%):
Goal: To reduce the percentage of Asian Equities to around 50%

3. To Buy Inverse ETFs and Puts before the next crash:-
Current Position:-
a. 7500 (Hang Seng Inverse 2x)
b. TZA (Inverse Russell 3x)
c. SOXS (Inverse Semiconductor 3x)
Goal: To have a sizable short position going into the next crash / recession

4. To Increase "USD/HKD/Gold" - No Progress. (Around 26%).
Goal: To be in the safe havens before next recession; (HKD may be repegged)

5. To Reduce Number Of Counters: Progress (12 from 15 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
Goal: To diversify across various Sectors, Countries and Currencies


Market Risk Indicators

1. Euphoria: 9 (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: 6 (Low Inversion: 1; High Inversion: 10) - Rising Interest Rates; Slope; Inversion; US 10 Years < US 2 Years; Expecting 2019 to 2020

6. Valuation; 9 (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: 55 out of 70 (79%); (Safe: 60%; Danger: 85%)


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

1. WTI Oil - Higher. US$38.95 from US$35.34 last week from US$33.41 two weeks ago;
Support: Resistance: US$29; US$45 (R1); US$77 (2018);
a. Demand is down about 30%? With Reopening, +15%?
b. Supply is up about 20%? Current cut -20%?
c. Price is down about 50%? How low can it go?
d. China is filling it's SPR
e. US is renting their SPR storage out, to the private companies
f. Not too much storage space left on Oil tankers and Railcars
viewtopic.php?f=33&t=9249&p=231235#p231235

2. Gold - Lower. US$1688 from US$1732 from US$1735;
Support: $1240; $1050; Resistance: $1775; $1830;
a. They cant print gold
b. Gold will probably rally after the current physical selling
c. In a crisis (cash crunch), gold will also be sold
d. 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$2.54 from US$2.44 from US$2.39;
viewtopic.php?f=33&t=5598&p=231237#p231237


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

1. US Equities - Higher; 3194 from 3044 last week from 2955 two weeks ago;
a. Support: 2820; 2740; 1930 (2016); Resistance: 3130; 3385
b. No Trade
viewtopic.php?f=11&t=7643&start=200

2. HK Equities - Higher. 24770 from 22961 from 22930;
a. Support: 22000; 21600; 19500; 16800
b. Resistance: 29000; 31600;
c. Bought Yeahka (9923)
d. Bought 7500 (Hang Seng Inverse 2x)
e. Sold CSPC Pharma (1093)
f. Sold AIA (1299)
g. Sold Cofco Meat (1810)
h. Traded China Shipping Energy (1038)
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120

3. Shanghai Equities - Higher; 2931 from 2852 from 2813;
a. Support: 2450; Resistance 3300; 3600
b. No Trade
viewtopic.php?f=10&t=7190&start=210

4. Spore Equities - Higher; 2752 from 2511 from 2500;
Resistance 3850
a. Sold Silverlake Axis
viewtopic.php?f=10&t=6828&start=b110

5. Japan Equities - Higher. 22864 from 21878 from 20388;
a. Forward PE 13
b. Support 15575 (2016); Resistance 25000
c. BOJ owns > Half government bonds and 75% of ETFs
d. Breakeven on BOJ's ETF at 19,500
e. No Trade
viewtopic.php?f=10&t=7138&start=200

6. Malaysian Equities; Higher; 1556 from 1473 from 1437;
a. No Trade
viewtopic.php?f=10&t=6292&start=30


Currencies: Risk-On (Data from XE.com on Jun 5 @ 8.30 PM)

1. USD to JPY - JPY Weaker; 109.35 from 107.80 last week from 107.65 two weeks ago;
a. 52 week range is 76 to 126
b. Aging Population
c. High Debt Ratio
d. Umlimited QE
viewtopic.php?f=32&t=4205&start=180

2. SGD to MYR - SGD Weaker; 3.0618 from 3.0792 from 3.0623;
a. Would they devalue the SGD because of the coming Recession?
viewtopic.php?f=32&t=136&start=110

3. AUD to USD - AUD Stronger; 0.6976 from 0.6668 from 0.6536;
a. The range is 0.70 (2016) to 1.10 (2011)
b. Commodity Currency
c. How will China retaliate against Australia?
d. To diversify my AUD into what currency?
viewtopic.php?f=32&t=5256&start=130

4. AUD to SGD - AUD Stronger; 0.9721 from 0.9414 from 0.9313;
a. The range is 0.98 (2016) to 1.36 (2012)

5. AUD to MYR - AUD Stronger; 2.9783 from 2.8987 from 2.8515;
a. The range is 2.20 (2008) to 3.41 (2017)
b. Converted some AUD to MYR recently

6. EUR to USD - EUR Stronger. 1.1308 from 1.1106 from 1.0898;
viewtopic.php?f=32&t=5523&start=100

7. USD to HKD - HKD Stronger. 7.7500 from 7.7512 from 7.7569;
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

8. USD to MYR:- MYR Stronger. 4.2671 from 4.3475 from 4.3634;
a. 52 Week Range is 3.27 to 4.54
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9

9. USD to SGD:- SGD Stronger; 1.3922 from 1.4119 from 1.4249;
a. High 1.70 (2004); Low 1.20 (2011)
b. Am uncomfortable holding the currency of a small country where a catatrophe can wipe them out; But Singapore has been managing it's finances well.
viewtopic.php?f=32&t=136&start=100

10. USD to CNY:- CNY Weaker; 7.0981 from 7.1371 from 7.1292;
viewtopic.php?f=32&t=7720&start=90

11. GBP to USD:- GBP Stronger; 1.2669 from 1.2350 from 1.2173;
a. Brexit
viewtopic.php?f=32&t=333&start=80

12. GBP to MYR:- GBP Stronger; 5.4067 from 5.3692 from 5.3116;

13. Dollar Index - USD Weaker; 96.69 from 98.34 from 99.86;
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 long 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:-
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; 0.93% from 0.65% last week from 0.66% two weeks ago

Yield on 2 Year Treasuries - Lower; 0.228% from 0.16% from 0.17%;

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

JNK (SPDR Barclays High Yield Bond ETF) - Higher: 103.54 from 102.00 from 100.29;

HYG (iShares iBoxx $ High Yid Corp Bond ETF) - Higher; 83.67 from 82.42 from 81.23;

Baltic Dry Index - Higher; 632 from 504 from 498; 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


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viewtopic.php?f=26&t=3168

[helios]

Winston isn't that ōld !!

Frankly speaking, I'm becoming more restless now that markets shoots seem to point UP ...

Intend to play last round of 2-weeks and then realised all profits to take a trading break.

Target of 100k should be enough, right?! ^^

[winston]

Frankly speaking, I'm becoming more restless now that markets shoots seem to point UP ...
Intend to play last round of 2-weeks and then realised all profits to take a trading break.

I think stock-picking is very important now. The easy money have already being made where all the ships rose with the high tide.

[investar]

Frankly speaking, I'm becoming more restless now that markets shoots seem to point UP ...
Intend to play last round of 2-weeks and then realised all profits to take a trading break.

I think stock-picking is very important now. The easy money have already being made where all the ships rose with the high tide.

Even leaky boats are going higher today:

$HTZ (bankrupt): up 114%
$JCPNQ (bankrupt): up 96%
$CHK (preparing for bankruptcy): up 175%
$NKLA (profitless): up 104%