To help out those who are keen but new and inexperience in trading DLCs, Robin is pleased to announce that he will be launching two new telegram chat groups where he will be sharing his DLC insights and trade ideas.
Robin is pleased to announce the launching of RHO DLC Trader Group and RHO DLC Discussion Telegram Group (15 May 2022)
Dow and S&P are racing to bear market territory.
Watch for 20%: Market cycles are measured from peak to trough, so a stock index officially reaches bear territory when the closing price drops at least 20% from its most recent high (whereas a correction is a drop of 10%-19.9%). A new bull market begins when the closing price gains 20% from its low.
I have learnt in my 35 years in the stock market that when the macro turns and the market corrects, the weak get weaker.
Always choose to short the weaker sector like the Nasdaq and Russell because they fall faster .
Dow Jones is down 13% from the peak, S&P 500 17.5% , Nasdaq 100 down 27.6% and Russell 2000 down 28.6% from its peak
Stocks lose 36% on average in a bear market.
We are not there yet.
Bear markets tend to be short-lived. The average length of a bear market is 289 days, or about 9.6 months.
We are not there yet.
Every 3.6 years: That’s the long-term average frequency between bear markets. Though many consider the bull market that start after the great financial crisis in 2008 and ended in 2021 to be the longest on record.
Here’s is the danger , the longest bull market may begat an exceptionally long bear market much longer than the average 289 days .
This bear market still has Legs to go further and longer .
Amazon (Nasdaq: AMZN) - Well defined long-term trendline that stretches back to 2017 is suggesting that Amazon heading lower towards 2215 and prehaps 2035.
On 2 May 2022 (Monday), this trade plan on Amazon (Nasdaq: AMZN) was posted on my Telegram Stock Chat Group when the stock was at 2,485.
Last night, Amazon (Nasdaq: AMZN) traded at a low of 2,159 (down more than 5%) and has hit my first target at 2,215 before closing at 2,175. The stock is down more than 12% since this trade plan was posted.
On May 6 2022 (last Friday), this trade plan on Russell 2000 Index was posted on my Telegram Stock Chat Group when the index was at 1,871.
On May 4 2022 (last Wednesday), this trade plan on City Dev (SGX:C09) was posted on my Telegram Stock Chat Group when the stock was at 8.05.
TINA - A common refrain since the March 2009 market low has been “there is no alternative” (TINA) — a catchphrase used as justification for buying stocks amidst ever higher price-to-earnings multiples where treasury yield are close to zero .
Benchmark Treasury yields definitively broke above 3%, moving further above their four-decade downtrend which intimates a new era has begun. A cold look at the long-term chart shows the next obvious stop should be around 4% The higher yields go, the more appealing they become for many investors and increased fears of a global recession suggests that some may soon consider returning to bonds.
Tina has reversed so has the “buy on dip strategy”. In the recent months “ Sell into strength” has overtaken “buying into dip” as a dominant and profitable strategy . The continuing weakness of the Treasury bond market, in the face of a hawkish Fed, is the best evidence of stagflationary concerns. It has also reconfirmed the death of risk parity with bonds and equities both down year to date in America. The S&P500 has declined by 9.4% on a total-return basis year-to-date, while the Bloomberg US Long-term (10Y+) Treasury Bond Index is down 19% . The longer this state of affairs continues, the more likely it is to trigger severe collateral financial damage somewhere. A Hawkish Fed trying to regain credibility remains plain bearish for growth stocks which is why, I have been so bearish on Nasdaq. The forward price-earnings gap between the MSCI AC World Growth Index and its value equivalent has come back down to around 10 points, having reached as high as 16 points in January last year. The bad news is that the long-term average valuation gap between global growth and value shares is about 5 P/E points, something which suggests the premium still has room to shrink even further.
Another danger lurking on the horizon for equities is a growing risk of mass redemptions from ETFs with the sell-off exacerbated by the reality that everybody owns the same stocks (Fanngs) because of the socialist monstrosity know as passive investment or “indexation”. This is why I continues to believe this bear market on Growth stocks is in its early innings .