ROARING TIGER HIDDEN DRAGON...
Next week comes the year of the Water Tiger...
Tigers are born in 1938, 1950, 1962, 1974, 1986, 1998, 2010 or 2022.
For Chinese, the tiger is the king of all beasts, a symbol of strength and bravery.
Investors or traders born in the year of horse, rabbit, goat and pig will have an abundant year.
Water will work well boasting travel industry, shipping and trade.
Metal is missing this year, so the internet sector will be mediocre. It will only pick-up nearer to mid of year.
Chinese being Chinese will want to start the year with a bang, so be prepared to see some boost in the China market when the lunar new year starts...
Okok... enough Feng Shui....
The hard hit sector which are the travel related sector will rise when the coast is clearer for travel. As we expected the travel sector to come back during November before Omicron kicked in early December, the sector spiralled down once again. Get ready to pick up some of the travel related stocks such as Marriot (MAR), Hyatt (H), Carnival Cruise (CCL), Wynn Resorts (WYNN) when they come back to the Dec lows. These are for trading only, not for long term investments. Shipping, FDX and UPS may be interesting play as supply chain improvements and normalisation kicks in. Wait for it to bottom out again before entry on a reversal pattern.
The tech sector, will be clearer by February and March. If opportunity comes and valuations are dirt cheap because of the risk on by many due to the interest hike expected in March, no problem to add some long term positions to your investments.
Lets see how 2022 Tiger plays out, but we hope to have a roaring Tiger year to fill up our fat wallet and it can awaken the sleeping Dragon, ie. China.
Wishing all a Happy and Prosperous Chinese New Year!
SPX
SPX continued to spiral down for the week by 265 points or 5.7%. From the previous high, it has dropped almost 420 points (8.7%), the highest drop we have seen for a while.
Compared to the past, the bears seems to be stronger as the earlier bulls may have been hurt already from the huge retracements of the tech stocks which made a big chunk of their profits in 2020 and 2021. Nevertheless, the VIX seems to trend lower than previous smaller retracements in Feb 2021 and Dec 2021. SPX has for first time dipped and touched 200 MA as the back to back retracements within a short span of 2 months.
If market continue to go down for the week but we do not see VIX going up above 30, there might be possibility that the current retracements may be enough for this round, setting up a new limit of 9%-10% retracement test for SPX.
NDX
It has been a brutal start of the year for NDX, loosing around 11.5% or 1877 points. Not that it is abnormal, but for certain high flying stocks, which has lost more than 40% its value, it makes some people's portfolio really painful.
The theme for Nasdaq would be Value Value Value.... no more risking on high flyers now. Together with the market retracements, fundamentally sound value companies have also retraced from its high, giving opportunity for long term buy ins. Eg.:-
MSFT - 15% retraced
FB - 21% retraced
AMZN - 25% retraced
GOOGL - 13% retraced
ADBE - 28% retraced
SBUX - 23% retraced
TRADE WATCHLIST - SBUX...
SBUX failed to rally despite going up almost $3 intraday on Friday but everpowered by the huge market drop at the end of day losing its reversal momentum.
We are still bullish on SBUX and will continue to monitor a confirmed trend reversal for the stock. Like previous reversals for SBUX, it will be quick run up when market turns positive. The reversal will be amplified if China market also does a runup.
TRADE WATCHLIST - JPM
JPM failed to jump as overall market is still on a selldown mode last week. Given it being heavily beaten down, it is one upswing canditate for sure when market overall turns green.
INVESTMENT BUY IN - MSFT...
MSFT closed at 296 on Friday, triggering our 300 first buy in point, a 13% retracement level from all time high.
If it reaches 270, it will again trigger our second position.
INVESTMENT BUY IN - ADBE...
We add on a new Investment Buy in which we did this week.
At current 500, it triggered our 2nd buy in. The last one was added at 550, another 10% down.
Considering a market shift from high returns tech stocks which was heavily beaten down, a part of investment will shift over to value stocks when the Nasdaq trend reverses. So it is ok still to buy in in stages when it is continuing going down as if we wait too long, we might miss this cycle of reversal buyin.
For the heavily beaten down tech stocks, lets keep that for short term trading play if they come back from the pits.
TRADERS TALK
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