Hey Folk
Last post I talk about the year 7 or also known as the famous 10 years
cycle have reached. The S&P 500 10 years cycle show that year ending with 7
usually have a dropped in the 3rd to 4 qtr.
Coincidently, next year is also known as the post election year. The
data for post election year also shows that there will be a dropped in the 3rd
to 4 th qtr.
The 10 years cycle and the election cycle also show that there is a
rally coming up right after the US presidential election.
As mention, this is a guide and just take it as a guide. The market is
following these cycles quite closely now. So they may happen.
Commitment of traders
On Christmas eve when data are collected, I do see lots of big players
eg the government or huge funds are loading up on the stock market. I do wish
to see if these phenomenon continues and also that the retail players are
continuing selling or shorting the stock market. If these carry on for weeks to
come that mean the stock market is a buy that will last awhile.
Accumulation/Distribution
The accumulation is slightly leading the price of the stock market.
Which is a good sign that price will propel upwards.
Price relationship
There are divergent in
many indicators. We do need to pay attention to them if these things continue.
As of Christmas eve, a
semiconductor ETF that always forefront the move of stock market are at the
new high. Russell are near the new
high. These again suggest that stock market will rally further.
Bonds market are hammered. But
price has stabilize. Which mean price of stock market may correct soon.
Bonds yield are still having a
positive gradient, but more distorted now. It shape more like a S than a linear
line. These show that stock market are set to propel but we may need to be
cautious on the long run.
Price action wise is bullish for the
US stock market and DAX. Hong Kong, SSE and STI are the less bullish market.
SSE is shaking up and trying to evolve into a ‘real dragon’ with their one belt
one road idea that make them to be the world trade hub.
One of the key thing about
stock market is, it is upward bias. If you do enough backtesting and you will
find that the most reliable way to certify when the stock market is having a
huge drop is when the stock market proofed that they are doing so. How to
certify, is with all the relationships and all that I mention above and
breaking of pivot points. So until proven wrong the market is in the upwards
trend.
*PS this is more of my opinion. Everyone is talking about how bad our
Singapore economy is. Is like the end of the world. Stock market wont do well.
But I think that everyone is wrong. I totally believe that for mid term to long
term we are facing tons of trouble. But for now STI may soar much higher. But
this is sincerely just my opinion.
For funds holder, probably you may like to
keep them into China and US. These 2 markets will make a good run for passive
investing.
Anyway, as usual, I may be wrong. So do not take all these outright.
Good luck good health and good wealth for the year ahead.
Cheer
