Riding the waves of markets
Just a collection of my ideas about US and China stock markets. Let's ride the waves of the markets to financial freedom!
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The market was still consolidating today. But all 3 major indices were hovering around EMA20 /w light volumes, so traders were waiting for some catalyst to jump back. Hopefully things will clear up next week.
Based on the economic data released this week, things are not too exciting, but certainly nothing to be down. April Retail sales was below expection, so it triggered the sell-off on Wed. But the market sentiment was completely different this time around. It was merely profit taking and nothing panic. So we should not scare ourselves like another huge drop is coming. Dude, this is the bull market. Buy on dips!
April Core PPI & CPI were no suprise: no inflation at all. Fed's printing press has been working hard to prevent the deflation. Good job, Mr. Bernanke!
Consumer Sentiment has been rising the last 4 months. Since consumer spending takes up 2/3 of GDP, it certainly reassures the demand is picking up.
On a side note, Industrial Production is flattening out. As consumer confidence is rising, Industrial Production probably already bottomed out.
Fed is still on full-throttle of doing quantitative easing. The evidence can be seen from the US Treasury yield curve. It's back to normal recently and even curving up. Guess what happened on Thursday? Fed intervened and bought $3billions of long-term Treasurys. The yield curve then got brought down a bit. We all know as the phrase goes, "Don't fight with the Fed." They can print as much money as possible. Intervention, intervention... The markets will not go down with such heavy interventions.
Based on the economic data released this week, things are not too exciting, but certainly nothing to be down. April Retail sales was below expection, so it triggered the sell-off on Wed. But the market sentiment was completely different this time around. It was merely profit taking and nothing panic. So we should not scare ourselves like another huge drop is coming. Dude, this is the bull market. Buy on dips!
April Core PPI & CPI were no suprise: no inflation at all. Fed's printing press has been working hard to prevent the deflation. Good job, Mr. Bernanke!
Consumer Sentiment has been rising the last 4 months. Since consumer spending takes up 2/3 of GDP, it certainly reassures the demand is picking up.
On a side note, Industrial Production is flattening out. As consumer confidence is rising, Industrial Production probably already bottomed out.
Fed is still on full-throttle of doing quantitative easing. The evidence can be seen from the US Treasury yield curve. It's back to normal recently and even curving up. Guess what happened on Thursday? Fed intervened and bought $3billions of long-term Treasurys. The yield curve then got brought down a bit. We all know as the phrase goes, "Don't fight with the Fed." They can print as much money as possible. Intervention, intervention... The markets will not go down with such heavy interventions.
I took a quick look at FA of the stocks. Sorry, they seem to have various issues:
loop: neg growth; nuan: neg profit margin, neg ROE; faro: neg growth; nile: neg growth (but I like the high ROE); cryp: can't find Q earning on Yahoo; bbbb: low ROE.
I would not touch those stocks based on my system. I only pick high growth (>50%) & high ROE, etc. To give an example, I have RIMM & GMCR in my holdings.
But the pt is not bragging abt whose holding is better. I'd like to talk abt investment strategy, market & econ conditions. Once you know where the economy and market are heading, picking the right stocks will be trivial. My system is to: 1. identify the global econ trends; 2. Know where the market stands in terms of biz cycle; 3. Use FA to identify the right stocks in the right sectors, and use TA to find the right entry/exit points. I find that once #1&2 are understood, #3 will come by easily.
I pay much more attention on FA than TA. As you mentioned before on good quality high tech, these are some of my favorites: loop, nuan, faro, nile, cryp, bbbb ... I own some of them, looking to buy others.