TOL @ May 5, 2024
Sell in May? Really?
The US Markets have been moving up over the past two weeks and Tom Lee, the uber bull from Fundstrat, is saying that the sell-off is over.
He pointed to five dovish signs that the Fed gave:-
1. The Fed is slowing its pace of quantitative tightening
2. Inflation is pointing lower
3. Rate cuts can coexist with a strong labor market
4. The economy isn't facing stagflation
5. A rate hike is unlikely
As for myself, I'm just trading the US Markets. Whenever a branded counter collapses on poor earnings announcement, I will try to buy it for the 1/3 retracement. So far, I have been lucky with New Oriental Education, Meta and Etsy. Waiting for Cloudflare which I entered on Friday.
As 2/3 of the US companies have already reported earnings, there wont be much opportunity left to trade the US markets. In addition, volume would probably be dwindling down in a few weeks time too due to the summer holidays.
For the HK market, it has moved up about 2200 points in the past 2 weeks or so. The "experts" are now saying that the HK market can touch 19,500 to 20,000 from the current 18,400. Where were these "experts" when the index was at 16,200 just two weeks ago? Did these "experts" ask you to buy at 16,200? If not, why are you listening to them now? Talk is Cheap.
As for myself, the HK market probably moved up after 16,200, on short-covering by the warrant issuers, as they have already made their money by suspending the leveraged call warrants to 16,200. Thereafter, the long funds and the hedge funds probably chase the market up from 16,200 as they were so underweighted HK.
Going forward, do you really think that the hedge funds and long funds would be buying after the HK market has gone up about 14% from just two weeks ago? In addition, cant you see the CBBC issuers salivating and waiting to slaughter the leveraged call warrant holders, all the way to 16,500?
Anyway, I have been selling whatever I can into the HK rally and raising as much Cash as possible.
In addition, fundamentals in HK and China have not really changed over the past two weeks.
For next week, it would probably be the same old, same old. I will continue to sell if the opportunity presents itself.
Risk Management Progress:-
1. To Monitor "Net Exposure" To Equities (Long Less Shorts):- Lower; (28% from 31% last week from 43% two weeks ago, of Liquid Assets)
Goal: 15% exposure to Equities before the next crash; Maximum 40%;
2. To Diversify Across Countries; Goal: Maximum 15 Counters (Not Easy)
a. Singapore: 0% (0 Counter); Boring Market
b. HK: 48% (12 Counters); Trading Market
c. US: 33% (5 Counters); Large Caps & ETFs @ Time Difference Risk
d. Malaysia: 19% (7 Counters); Special Situations
Goal: To ensure that my portfolio is not too concentrated in any country.
3. To Increase "USD/HKD/Gold/Silver" from around the current 33%
Goal: To be in the "safe havens" before next recession; (HKD may be repegged)
4. To Minimize Industry / Sector Risk / Country Risk
a. Heavy exposure to Asian Based Equities ie. HK & Msia
b. Heavy exposure to Asian Based Currencies eg. HKD & MYR
Goal: To diversify across various Sectors, Countries and Currencies
Commodities: Risk-Off; (As of May 03, 2024 @ 1.30 PM)
1. WTI Oil - Lower. US$79 from US$84 last week from US$83 two weeks ago;
Support: US$67 (Jun 2023), US$17 (Mar 2020); Resistance: 115 (Jun 2022); US$138 (Jun 2008);
a. Weak China Demand
b. Russia produced about 11m bpd. About 4m of Supply could be affected.
c. SPR: Inventories -60%; Released 25% (180 m barrels); 372m barrels left; Replenishing 1.2m @ US$78; Suspended Replenishment;
d. OPEC+: Cut 5m bpd (5% Global Demand)
e. Saudi's massive budget needs oil prices to be > $81 per barrel
viewtopic.php?f=33&t=9249&p=231235#p231235
2. Gold - Lower. US$2316 from US$2350 from US$2407;
Support: 1490; 1240; 1050; Resistance: 2700;
a. In a crisis (cash crunch), gold will also be sold
b. Vested in Gold Coins, GDX;
viewtopic.php?f=33&t=8845&p=231236#p231236
3. Silver - Lower; US$27 from US$28 from US$29;
a. Attractive "Silver to Gold" ratio
b. Industrial Demand eg. Solar
c. Monitoring SLV
viewtopic.php?f=33&t=10086&start=80
4. Copper - Lower. US$4.50 from US$4.57 from US$4.49;
Support: 3.08; 2.25; Resistance: 4.75;
a. Slight oversupply for a few years?
b. 14 years for operational new mine
c. Monitoring COPX;
viewtopic.php?f=33&t=5598&p=231237#p231237
5. Uranium - Higher; US$92 from US$86 last week from US$89 two weeks ago;
Support: 14 (2016); Resistance: 140 (2007);
a. Kazatomprom, world's largest, to keep production flat in 2022 & 2023.
b. If O&G drops, how would that affect Uranium?
6. Bitcoin - Lower. US$59,619 from US$64,463 last week from US$63,652 two weeks ago @ 1.35 PM on May 03, 2024
a. Record: $69,000 Nov 2021; Support: $8300;
b. Cost of Mining Bitcoin: US$15,000 (Floor?)7
c. US$1m Target by Cathie Woods by 2030
d. Demand from Russia-Ukraine War, Iranian & Venezuela Sanction;
e. Not vested
viewtopic.php?f=16&t=6175&start=170
Equities - Risk-On (Data as every Saturday)
CNN Fear & Greed Index - Lower; "40 Fear" from "42 Fear" last week from "31 Fear" two weeks ago.
viewtopic.php?f=16&t=9099&start=9
1. US Equities - Higher; 5128 from 5100 last week from 4967 two weeks ago;
viewtopic.php?f=11&t=7643&start=200
a. Support: 5180; 4800; 3850; 3600; 3400; 2800; 2237 (2020); 1930 (2016); Resistance: 5350
b. S&P 500: PE 22; Forward PE 21; Average 16
c. S&P 500 CAPE Ratio; Current = 31; Sept 1929 = 33; Dec 1999 = 44
d. Buffett Indicator: U.S. Equity Market Cap / GDP = 151; >140 is Expensive
e. Nasdaq PE 23; Forward PE 27; Average 19
f. PE of "Magnificent 7" = 45
g. Bought Cloudflare
h. Traded ETSY
i. Sold Alibaba
2. HK Equities - Higher. 18476 from 17651 from 16224;
htttp:/investideas.net/forum/viewtopic.php?f=10&t=7470&start=120
a. Support: 16400; 14700; 13300; 8600
b. Resistance: 17100; 19500; 24000; 31200;
c. Sold 1/2 AIA
d. Sold 1/2 Alibaba
e. Sold HS Tech ETF (3033)
f. Sold Sands China
3. Shanghai Equities - Higher; 3105 from 3089 from 3065;
viewtopic.php?f=10&t=7190&start=210
a. Support: 2450; Resistance 4600
b. Vested 3188 (CSI 300 ETF) & 2822 (A50 ETF)
c. Targeted Stimulus Programs
d. CSI 300; Forward PE 11
e. No Trade
4. Japan Equities - Higher; 38236 from 37935 from 37068;
viewtopic.php?f=10&t=7138&start=200
a. Support 15575 (2016); Resistance 33800; 38960
b. BOJ owns > Half government bonds and 75% of ETFs
c. Recession? Stagflation?
d. No trade
5. Malaysian Equities: Higher; 1590 from 1548 from 1551:
https//investideas.net/forum/viewtopic.php?f=10&t=6292&start=30
a. Support: 1369; 1210; Resistance: 1895 (Apr 2018)
Currencies: Risk-On (Data from XE.com on May 03 @ 1.40 PM)
1. USD to JPY - JPY Stronger; 153 from 156 last week from 154 two weeks ago;
a. Range is 76 to 154
b. Aging Population
c. High Debt Ratio
d. Expecting rates to rise in Japan
e. Monitoring FCY and YCL
viewtopic.php?f=32&t=4205&start=180
2. SGD to MYR - SGD Weaker; 3.50 from 3.51 from 3.51;
Resistance: 3.54;
a. Would they devalue the SGD because of the slowdown?
viewtopic.php?f=32&t=136&start=110
3. AUD to USD - AUD Stronger; 0.66 from 0.65 from 0.64;
a. Range: 0.66 to 1.10 (2011)
b. Commodity Currency
viewtopic.php?f=32&t=5256&start=130
4. EUR to USD - EUR Flat; 1.07 from 1.07 from 1.06;
a. Avoided Energy Crisis?
b. Ukraine War - Escalation or Cease Fire?
c. Monitorinbg FEZ
viewtopic.php?f=32&t=5523&start=100
5. USD to HKD - HKD Stronger; 7.8128 from 7.8294 from 7.8314;
a. USD Peg band: 7.75 to 7.85
b. When will they be removing the peg to the USD?
c. No Hot IPO
viewtopic.php?f=32&t=3529&start=40
6. USD to MYR:- MYR Stronger; 4.74 from 4.78 from 4.78;
a. 52 Week Range is 3.27 to 4.75
b. Lowest: 4.885 (1998)
viewtopic.php?f=32&t=397&start=9
7. USD to SGD:- SGD Stronger; 1.35 from 1.36 from 1.36;
a. High 1.70 (2004); Low 1.20 (2011)
b. Uncomfortable with currency of small country
c. Singapore has been managing finances well.
viewtopic.php?f=32&t=136&start=100
8. USD to CNY:- CNY Stronger; 7.24 from 7.25 from 7.24;
viewtopic.php?f=32&t=7720&start=90
9. Dollar Index - USD Weaker; 105.10 from 105.48 last week from 105.97
two weeks ago;
viewtopic.php?f=32&t=7616&start=60
Properties:-
1. China Properties:-
a. Supportive Programs
viewtopic.php?f=10&t=8150&start=140
2. HK Properties:-
a. New launches are at 2018 prices
viewtopic.php?f=10&t=7785&start=150
3. Singapore Properties:-
a. Stronger than expected
viewtopic.php?f=10&t=7750&start=210
4. Malaysian Properties:-
a. Johor and Penang properties seems to be strong
viewtopic.php?f=10&t=4220&start=20
Others
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; 4.58% from 4.69% from 4.62%;
Yield on 2 Year US Treasuries - Lower; 4.88% from 4.99% from 4.99%;
Interest Rates:-
a. 2/10 Inverted; Recession Indicator
viewtopic.php?f=16&t=7319&p=221670#p221670
JNK (SPDR Barclays High Yield Bond ETF) - Higher: 93.84 from 93.42 from 92.84;
HYG (iShares iBoxx $ High Yield Corp Bond ETF) - Higher; 76.75 from 76.39 from 75.86;
Baltic Dry Index - Higher; 1774 from 1743 from 1901; Low 290; High 11,400 (2008)
Inflation:-
viewtopic.php?f=16&t=6950&start=11
Health:-
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 help me crystallize my thinking. It's not a recommendation to Buy or Sell. For illiquid counters, I may not disclose my trading activity for the week.
Active Topics - There is an "Active Topics" button on the top right corner.
https://investideas.net/forum/search.ph ... ive_topics
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