Thursday, February 18, 2021

Pacific Basin 2343.HK - Provides Dry Bulk Delivery Services , A Commodity Recovery Theme Play

 


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Commodity Super Cycle That Will Last for next 7-10 Years Could Just Have Started



In the past 120 years we have seen four major cycle peaks in the Broad Commodity Index measured by its 10-year rate-of-change indicator, with the most recent peak in 2008. This historical supercycle pattern shows that commodity prices could be sets up for the next secular bull market. Bull market in commodities are volatile, don’t expect a smooth ride.

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Bitcoin Hit Channel Line Chart Point At 52,600, Could Retrace In The Short Term.

 


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Wednesday, February 10, 2021

Inflation on the rise

Inflation is on the rise , question is, does the market really care. Obviously, it hasn’t cared yet. I think it’s the biggest risk. Nobody is really bother because of the belief there will be fiscal stimulus and that it’s going to be highly supportive of economic growth and the stock market.

The House has just given its approval to Biden's 1.9 trillion stimulus plan and when this money gets into the hands of the American people it will unleash another wave of spending spree that will cause prices of goods and services to skyrocket.
The US ISM Manufacturing Price Paid Index was up 5.8% MoM and 54% YoY in January to the highest level since April 2011 . While core inflation in the Eurozone soared to 1.4% YoY in January, way above expectations

On Wednesday (Feb 3, 2021) , the 5-year breakeven inflation rate, a Treasury market metric of inflation expectations, was at 2.30, the highest since April 2013. That means market pros expect inflation to average 2.3% over the next five years. The measure compares the 5-year Treasury yield to the TIPS note of the same duration.

The market has not priced in the ballooning debts but rather the positive outcome of the relieve stimulus package.

If inflation gets too hot, that could turn into a negative for stocks, and it would crimp corporate earnings by pressuring margins

CEIC Data, Eurostat

ISM, CEIC Data


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Thursday, February 4, 2021

Bitcoin Goes On The Main Stream

Central banker indiscriminate easy money policies has flooded the world with fiat money with Federal debts held by pubic equivalent to world war 2 levels . We are in the midst of the largest monetary experiment in human history, with no foreseeable end. Governments worldwide are adopting quantitative easing policies while simultaneously running progressively larger deficits on top of increasingly untenable debt levels. Considering that 25% of all US dollars ever created were made in 2020, bitcoin could also act as an insurance policy against monetary and fiscal irresponsibility from central banks.

Bitcoin's reflexivity
In the past institutions couldn't buy bitcoin . Today bitcoins is a viable investment asset class with liquidity, a regulatory framework, established exchanges and its market cap.
Stanley Druckenmiller and Paul Tudor have both invested in cryptos and they highlighted its potential as a hedge against inflation

An increasing number of reputable firms and respected investors have acknowledged and purchased bitcoin, lowering the career risk for investment managers who want to incorporate the cryptocurrency into their professional portfolios. US market regulators are also opening up to the concept of institutional money flowing into bitcoin. In addition, central bank digital currencies will naturally push people towards further acceptance of digital value accrual.

At the time of writing, Ethereum continue to scale new high on track to my 1800 target and Bitcoin should test 39700 resistance before attempting for its ATH at 42K.






Ethereum



Bitcoin


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Thursday, January 28, 2021

US Major Indices Price Action Trend Cycle Are Maturing, A Major Correction Could follow

The charts of US Major Indices are showing the narrative that their respective Price Action Trend Cycle are maturing at the same time. 

Both the S&P 500 & Nasdaq-100 are currently trading at the upper band of the Bollinger with the S&P 500 trading at 15% premium to its 200-MA while Nasdaq-100 is trading at 20% premium to its 200-MA.

Since 1997, the S&P500 has traded at a 15% premium to its 200-day MA on 14 occasions with a subsequent average drawback of -0.9% from these levels.

As for Nasdaq-100, it currently trades at the upper band of the Bollinger and 20% premium to its 200-day MA. This is the 18th time the Nasdaq 100 has traded under these conditions with subsequent average pull-back of -0.95% after reaching these levels. 

We at the stage of the financial market where the market’s most aggressive energy has gone racing toward “pre-profit” growth companies, long-shot emerging growth and massive SPACs listing and acquisition spree.

Stock like Gamestop or a Plug has been dramatically surging within a one-month period with momentum investors chasing on them.

Such a euphoria bears a resemblance to that of the 90’s dotcom bubble where this sort of thing kept rolling until the Nasdaq doubled in less than a year and a few-hundred IPOs hit the market before an inevitable correction.

Nobody knows when the market is going into a meltdown. However, the ingredients of a significant correction are in place. 

The charting model used has been spot on many occasions and there is reason to believe that a correction is impending. 


Figure 1: S&P 500 Valuation

Figure 2: What type of bubble are we in 


Figure 3: Dow Jones’s Price Action Trend Cycle Is Maturing



Figure 4: S&P 500 ‘s Price Action Trend Cycle is Maturing


Figure 5: Nasdaq-100 ‘s Price Action Trend Cycle is Maturing








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Monday, January 18, 2021

China Railway Construction (CRCC, 1186.HK) Positioning for a rebound?



Like China Mobile, CRCC (1186.HK) finds itself being in the crosshair of the US government.

US funds are barred from investing in CRCC as the company is controlled by the Chinese government.

The stock showed potential signs of bottoming from market capitulation (5 January 2021) trading at low of 4.10 after the stock was being removed from the major index providers such as the S&P, Dow Jones, MSCI and FTSE.

The stock has since rebounded by more than 20% after China enacted new countermeasure rules to shield its companies from “unjustified sanction”.

The stock currently trades at 5.03 (at the point of this write up), the immediate target level could be 5.51. If the stock does breaks 5.51, it could reach target of 5.70 and 6.00 with a long-term target of 6.55.


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Tuesday, January 12, 2021

CSI 300 set to reach its at-time high at 5885.48.

CSI 300 its broke 2015 high (5,380.42) on 6 January 2021 and could set to reach its 2007 ATH at 5,885.48. 




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Friday, January 8, 2021

China Mobile (0941.HK) Signs Of A Potential Bottoming?



With NYSE delisting China Mobile, global fund providers such as MSCI and FTSE are divesting their holdings in the company. The recent sell off by fund managers has led to the stock trading close at its 15-years low.
The price action is suggesting that the stock could be “capitulating” under massive sell volume. The stock could be bottoming out and potentially provide a window of opportunity for long term investors.
The company currently trades at 41.15 (at the point of writing this article), providing investors a decent dividend yield (based on 2019-20 dividend pay-out rate) close to 8%.
Should price level break above the 42.50, we could see the bulls back in control of the stock and potentially head towards first target level at 44.20.
If prices breakout even further above 44.20, the stock could move towards second target price at 50.

First Target – 44.20
Second Target – 50.00
Stop Loss – 39.00
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