The Russian equity fund bought turned out to be a big money-loser within 1 week of purchase. The painful experience was shared in this elitetrader thread. https://www.elitetrader.com/et/thre...russian-equity-fund-my-after-thoughts.365609/
Even the resilient Straits Times Index and Singapore market has succumbed to global stock market weakness. Crypto is crushed. USD is king. I have been pleasantly surprised by the resilience of the Straits Times Index(STI) and the Singapore stock market for most of the past 2 weeks. There were days when the U.S market plunged but STI declined much lesser than expected (usually less than 0.4%). That was unusual strength. Unfortunately, by the end of this week (6 May 2022), STI finally succumbed to global stock market weakness and joined in the decline. I started getting more aggressive in adding to my Singapore portfolio during the week of 19Mar2022 when STI showed signs of strength. I took some profits off as the market started to weaken this week. Initially, I enjoyed good profits in some palm oil stocks like Bumitama Agri and Golden Agri but Indonesia's ban on palm oil exports caused these stocks to plunge, particularly Bumitama which happened to be my biggest winner among palm oil stocks. The ban caused a substantial portion of the gains to be lost. I generally do not like stocks which are strongly influenced by politicians' unpredictable decisions. Most of the winners in my portfolio are commodity-based stocks. Another winner was RH Petrogas but it has dropped 28% from its recent peak. Most stocks in a portfolio will drop when the general market drops. However, there are some stocks which remain resilient and drop lesser than average. These are stocks which I will keep as they will rebound strongly when the market recovers. One of them is Jardine Cycle and Carriage. Straits Times Index remains among the best performing Asian index in 2022 year-to-date, losing only to Indonesia's Jakarta Composite Index which is boosted by commodity stocks. Ranking of stock indices (Source) While STI still remains relatively strong, the stock market internals shows worrying signs of weakness. The market internals for other markets like Hong Kong, U.S, and China look even worse. Nasdaq100 is terrible. Stock market internals (Source) Among the financial markets I monitor, the worst is the crypto market. Cryptocurrencies have been absolutely crushed year-to-date. Ranking of major cryptocurrencies(Source) Bitcoin has fallen to a 52-week low. Even the top performer Tron is 34% below the 52-week high. Anchor has been a favourite crypto protocol among crypto investors because of its high 19.5% yield with UST stablecoin. Almost everyone agrees that the high yield is unsustainable. The high yield is being paid from the Anchor reserves and will last approximately 38 more days. Maybe the reserves will be topped up later. I don't know. I have warned people around me to not put too much of their savings into it for the high yield. Personally, I have taken my funds out of the Luna ecosystem for the time being and will stand by as a spectator for the time being. Crypto market has been highly correlated with the U.S stock market in 2022. In fact, I have come to use the crypto market during the weekend as a leading indicator to guess the performance of the U.S market when it reopens on the following Monday. Ranking for currencies (Source) The strong USD is the king among currencies in 2022. Only commodity-based currencies manage to beat USD. The biggest surprise is the Russian Ruble. It is now the world's strongest currency, rising from the ashes a few months ago when it was the world's weakest currency when Russia invaded Ukraine. Probably the best trade of the year would be buying the Russian Ruble when Russia initiated its invasion of Ukraine.
In terms of the stock market, your comment regarding.... "However, there are some stocks which remain resilient and drop lesser than average. These are stocks which I will keep as they will rebound strongly when the market recovers." Yes maybe some stocks, but they will be very rare and not worth betting on. If you want a further explanation, you need ask, otherwise I'm not bothering to waste my time explaining.
Ok, a slight long winded response, so that others don't come back on me splitting hairs with silly technicalities. In a bull market, the flyers are hot to trot stocks, most popular, favorites, high potential, usually a bit speculative. They usually run hard and fall hard because they run ahead of themselves in terms of price getting cooked too much. The plodders can be mediocre stocks, also utilities and defensive stocks. When a stock mkt corrects, some of the hot to trot had already corrected weeks or maybe months prior, just due to no reason other than they were overbought long ago. The plodders, utilities, defensive stocks, these are usually least volatile, and when they correct are mostly never overcooked, and their corrections usually modest. 'Safe' traders invest in safe stocks, booring as batshit types which plod up and pay a dividend. On a stock mkt correction, often fall minimally. For traders, looking for volatility, stuff which runs hard, they have to expect hard falls. On a mkt correction, near bottoms (if you can gauge it, savvy, know how to trade / experienced,) you will be wanting to buy in on those previous hot to trot which have been smashed down hard and still not recovered. Most likely, especially in a bear mkt, these will be at bargain prices.
Because a stock mkt has bottomed, does not necessarily mean all stocks have bottomed. For example, if a mkt correction is short duration, some stocks may still be too expensive. How can you measure that? Speccy stocks have no earnings mostly and therefore no PE. Besides that, speccy stocks may have no revenue. Also, depends on debt levels within a stock. It's a juggling act of previous S/R levels, round numbers, debt, price/revenue ratio, DOM, stock turnover $, stock price, Cap, # shares on issue, gamblers luck, etc.
The U.S stock market rally which started 2 weeks ago is dead. China stock market fights back. Resuming purchase of China, HK stocks (11 June 2022) 2 weeks ago when the U.S stock market started a mini-rally (27 May 2022), I suspected it was a bear-market rally driven by profitable short-sellers covering their shorts. After 7 down weeks, short-sellers would be looking for an excuse to take profit. S&P500 suffered a mini-crash this week dropping 5.05% and it was the worst week of the year since January. This market action showed that it was indeed a bear-market rally. Take a look at the U.S stock indices in the table below. Source Take a look at the internal market statistics of the U.S market. Source Take a look at the internal market statistics of individual U.S sectors. Source Only the energy sector looks healthy. The U.S stock market looks terrible at the moment. I will be avoiding the U.S market until it shows enough signs of recovery. Fortunately, elsewhere in China and Hong Kong, the market action is telling a different story. Take a look at China and Hong Kong stock indices in the table below. Source Take a look at China's and Hong Kong's internal market statistics in the table below. Source The numbers for China's and Hong Kong's stock markets look better but not really that fantastic. Nevertheless, it shows enough signs of recovery. It is good enough for me to resume buying China and Hong Kong stocks, but not aggressively yet. Last year (2021), the U.S stock market enjoyed a bull market. While the bull charged ahead, a bear was mauling China's and Hong Kong's stock market. Therefore, it is reasonable to bet that the reverse case may happen this year. Mean reversion at work. The bear market in China last year was largely man-made, caused by the government's strict regulatory crackdown on the technology and education sectors. China's government has recently relaxed its tough stance and Mr Market has been responding positively. From past experience with China's stock market, government intervention plays a huge role in influencing the market. More so than in other markets. Despite my positive feelings about China/HK markets at the moment, there is always the possibility that these markets will slip back to correction. This has happened to me several times in the past after I became bullish and it will continue to happen in future. I remind myself never to neglect risk management to survive through bear markets. USD has been showing an inverse relationship with the U.S stock market this year (2022). When the U.S stock market is weak, USD will be strong and vice versa. Look at USDSGD and USDCNH this week. 5 strong daily up bars throughout the week. Just by looking at forex pairs, I can tell how the U.S stock indices are performing without looking at them. If one is to go into cash, the best cash to be in will be USD. The strength of USD complicates my investments in China stocks. Losses from bad stock-picking will be compounded by a weak currency. Due to the strength of the USD, I will convert my USD holdings to CNH only when necessary. If the market weakens and forces me to raise my cash levels, I will convert most of it into a safe-haven currency like USD. Crypto-currency market action has been really bad. 2 weeks ago when U.S stocks were up, crypto-currencies crashed. This week when U.S stocks went down, crypto-currencies crashed along with it. The crypto-currency market is so awful that I think some investors even avoid looking at their crypto portfolio to avoid pain. Look at this table ranking the major crypto-currencies this year. The top performer Tron(TRX) is 35.55% down from its 52-week high. If the best is so bad, what else can I say? Source The commodities market paints a worrisome picture of our rising cost of living. Source The top-performing commodities that rose the most this year are related to energy and food. They are the main drivers behind our rising cost of living this year. On another worrisome note, industrial metals such as copper, aluminium, lead, and tin are among the poorer performing commodities. These are signs of a weakening global economy. Is a recession coming? The cure for high oil prices is higher oil prices because they encourage commodity producers to raise supply. Unfortunately, commodity prices are not high enough to motivate the producers to produce more due to soaring input costs. It seems to me only a recession can pull down oil prices now. No wonder the U.S stock market made a tantrum this week. Mr Market is expecting central banks to raise interest rates to cause a recession in order to kill inflation.