Tuesday, June 28, 2022

BYD (1211 HK) "Sky is the limit"

BYD continues to deliver resilient EV sales thanks to a strong model line-up, vertical integration and leadership in LFP batteries.


Global EV sales remain resilient as car makers are prioritising EVs and China policies remain supportive amid the energy crisis.

BYD is a battery makers with technological leadership and cost competitiveness that will help to alleviate margin pressure caused by material inflation.

BYD is breaking above its all time high of 324.60 today and will enter a path of least resistance and the "Sky is the Limit", next target 350 and 367.




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Wednesday, June 15, 2022

BOJ Ramps Up Yield Control Defense Against Global Debt Rout

I don't think the Japanese central bankers can hold out any longer.


Start shorting Japanese government bonds, betting the Bank of Japan will be forced to abandon its super-easy monetary policy that's increasingly isolated from global peers.


The Japanese market will crash along with the bond market when liquidity is tighten. This could be the trigger for the next big crash.


Start shorting the Nikkei, it could happen soon!







All posts and charts are for educational and illustration purposes only
Monday, June 13, 2022

Is decline in yen due to carry trade ? Or is the market questioning the credibility of the Japanese central bank indiscriminate money printing policies.

Usd/Yen - Since I posted my bearish views of dollar / yen on 12 Apr when it was traded at 125.4 and had a target of 134 and 147 , the first target has been hit today, frankly it came sooner than I thought.

The sell-off in the Treasury bond market over the past two weeks, with the 10-year Treasury bond yield rising from 2.70% on 26 May to 3.02%, has predictably triggered renewed downside pressure on the yen and as long as the US treasury yields continue to go higher it will cause the yen to decline further .

What is the key issue here for investor? Is decline in yen due to carry trade or is the market questioning the credibility of the Japanese central bank indiscriminate money printing policies.

How the yen behaves in the next downturn is the crucial issue on which investors need to be focusing.

If the yen hits my next target at 147, it will be unusual signal worth paying attention to and potentially a signal that the monetary madness of the previous decades is seeing its first credible market signal that it will no longer be tolerated.

It could lead to the next Global Financial crisis.




All posts and charts are for educational and illustration purposes only

Glad to be featured as a part of the APAC Trader’s Summit line-up held on Saturday (11 June 2022).

Just in case you missed this it’s just up on YouTube. Tips and tricks dropped!


If you missed the event this is the recording ➡️ https://youtu.be/HhRvZYwDPF0




All posts and charts are for educational and illustration purposes only
Tuesday, June 7, 2022

Bloomberg Commodity Index poised to challenge the year's high after a 3 months consolidation.

Commodity super cycle typically last between 7-10 years , this cycle is 2.5 years old. 

Congrats to those who invested in the commodity unit trust under my management since mid 2021 , we are  outperforming every asset class. Ride this mega trend!




All posts and charts are for educational and illustration purposes only
Monday, May 30, 2022

WTI Crude Oil - WTI is poised to break out of its 3 months consolidation


WTI is poised to break out of its 3 months consolidation as Shanghai allowed manufacturers to resume operations from June and Beijing's coronavirus outbreak is under control.

WTI will hit 130 when it breaks above 117 and a longer term target of 147 if WTI is able to stay above 130.

All posts and charts are for educational and illustration purposes only
Sunday, May 29, 2022

Inflation finally slows! Does that mean that the market has found its bottom?

Inflation finally slows! 

Wall Street closed sharply higher as signs of peaking inflation and consumer resiliency sent investors into the long holiday weekend with growing optimism that the Federal Reserve will be able to tighten monetary policy without tipping the economy into recession. Does that mean that the market has found its bottom?


In the 12 months through April, the PCE price index advanced 6.3% after jumping 6.6% in March.


The annual PCE price index increase is slowing as last year's large gains drop out of the calculation.


Excluding the volatile food and energy components, the PCE price index gained 0.3%, rising by the same margin for three straight months. The so-called core PCE price index increased 4.9% year-on-year in April, the smallest gain since last December, after rising 5.2% in March. It was the second straight month that the rate of increase in the annual core PCE price index decelerated. This inflation measure is the most followed by economists and policymakers.


Inflation past the peak?

Inflation has pass the peak but it will remain stubbornly high. I remain confident that crude oil recent consolidation is getting ready for another parabola spike up to 140 d/b. 


Substantial declines in the annual rate of inflation are unlikely to materialise until there are significant improvements in geopolitical tensions (that would get energy prices lower), supply chain strains and labour market shortages. Unfortunately, there is little sign of any of this happening anytime soon – The Russia-Ukraine conflict shows no end in sight, Chinese lockdowns will continue to impact the global economy. 


At the moment consumer demand is firm and businesses have pricing power, meaning that they can pass higher costs onto their customers. 


Housing will keep inflation high 

The housing components, accounting for more than 30% of the CPI basket, are not likely to turn lower soon. The housing market remains red hot and this feeds through into primary rents and owners’ equivalent rent (OER) components of inflation with a lag of around 12-18 months. 


Rent contracts are typically only changed once a year when your contract is renewed so it takes time to feed through.


Fed under political pressure to curb inflation 

This situation intensifies the pressure on the Fed to hike interest rates. This potentially means aggressive rate hikes and the risks of a marked slowdown/recession.


The Federal Reserve remains, for now at least, under political pressure to tighten  with the  poll this month which shows that Americans remain far more concerned about inflation than any other issue. A total of 70% of Americans view inflation as “a very big problem”


And the empirical evidence shows that the Fed in the post-Volcker era has been increasingly sensitive to such political pressures. It is certainly not  easy for Fed to talk dovish when the executive and legislative arms of government want to curb inflation as a top priority especially ahead of the mid term election.


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Tuesday, May 24, 2022

Valuation Looks Compelling But Is It Time To Buy?

Time to start buying ? Valuation is tempting  after the meltdown.

US shares took at beating with Nasdaq 100 down 30 % and S&P testing the 20% bear market benchmark.  Valuation looks compelling but is it time to buy?

United States Private Consumption accounted for 68.3 % of its Nominal GDP in Mar 2022. 

Shares of U.S. retailers and consumer-oriented stocks took a beating last week on worries about whether surging inflation will continue to hurt corporate bottom-lines and cause shoppers to cut back.

Last week, consumer staples dived 8.6% and consumer discretionary tumbled  7.4%, the biggest declines of any S&P 500 sectors, with inflation hammering corporate results. Shares of some companies fared far worse, with Walmart down 19.5% for the week and Target down  29% after disappointing results. 

We are beginning to see Investors consumers cut spending in the face of higher prices. This is happening sooner than what most on Wall Street are anticipating .

I think we are only at the beginning of people cutting down spending  and changing their spending patterns.

The latest consumer price index jumped 8.3% on an annual basis. Prices for gasoline stand more than 50% higher than a year ago, according to AAA.

Gasoline prices are scaling new high while oil prices has stubbornly stay above the 100 dollar/ barrel mark will keep undermining consumer spending.

A survey by Morgan Stanley found that more than half of consumers plan to cut spending over the next six months due to inflation.

The  slump in share prices has made valuations and risk/reward more tempting but we to see evidence of ebbing inflation before we start bottom fishing .  

Private consumption makes up 68 % of the US economy , when consumer cuts back spending US and the world is going into recession. This bear market has more downside , it’s not time to get  into stocks yet .

All posts and charts are for educational and illustration purposes only