Global Stock Market is Falling or Correction?

These days everyone is concerned about the future movement of the Global Stock Market. Recently, the global markets were influenced by the US NASX and S&P 500 markets. Many people were arguing whether is it a new crash (after 10 years) or just a correction.

To be honest, all fundamental analysis are pointless at this current global markets condition, investors should focus more on the technical analysis to determine where to take profit or stop loss. The Index PE ratio has actually dropped back to last year level. However, we believe that it is only a technical correction as the S&P 500 were on the uptrend without any correction since early of 2016 for around 60%.

Around 60% uptrends since early of 2016 

Investors should focus more on the US Stock Market (S&P 500) as the global market falling due to them. Most importantly, this is not yet a global economic crisis because there are no economic crashes at this moment (Unsimilar to the past few global crisis). All the annual company financial reports released lately reflects that the economic are still strong and solid.

However, we would still need to prepare for any possibilities. According to the technically analysis, there are a few supports that need to be considered. If the US index fall below the support, we will have to start preparing for the second stock portfolio adjustment.

S&P 500 First Support @ 2540.00

The first support would be at 2540.00 and the second is at around 2467.73. If it is really fall below the second support, we believed that the bear market might just gonna start. Hence, from now onwards, the global stock markets are getting more harder to invest for normal investors.

To be advised,
1) Please sell off without hesitate for those short term stocks that did not perform too well.
2) For medium or long term investors should wait for a better signal.
3) US government still planning to increase the interest rate on the upcoming FOMC meeting. hence, the global stock markets have not really come to the end yet.
4) If it is just a correction of the global stock market, we should start looking for any undervalued stocks to increase your stock management portfolio.

Please feel free to drop any comments. Thanks.

The Coming Bear Market?

Recently, the performance of the stock market does not perform well. Does it means that the Bull Market is coming to the end? Bear Market is coming soon? The candlestick pattern indicator is showing a weird signals. Based on the backtesting results,

HSI: Market (2007)

A breakout signal on 29 Oct 2007 with four candlesticks and then a gap drop signal to begin with the bear market. In fact, it was the beginning of a Bear Market,

If compared back to the recent HSI (2017),

Exactly the same candlesticks signals have appeared again. A breakout signal then four candlesticks and a gap drop signal with a similar Volume of transactions.

KLSE (2017)

For Malaysia Bursa, the stock market started to perform poor in June onwards. Recently, there were also a continuously 8 days of dropping in the stock market. In addition, the recent highest point in Sep was even lower than before in June, in which the market proved that the economy might be collapsing. The most critical point is 1753, better hope that the stock won't drop below that level. If not, 1727 (-3.34%) will be the next resistance line.

According to these recent performance, it is quite dangerous. However, nobody will exactly know or inform everyone that the Bear Market has arrived (not until you have almost reach to the bottom). Personally, I think everyone should re-examine your portfolio and try to get rid of useless or underperformance stocks as the market does not really look so healthy.

Technical Analysis - The wave analysis showed that this is the final wave of the Bull Market (5th wave) before the bear market has come. For those safety investors or low risk investors, short term stocks should not be considered as the current market is quite difficult to play.

Be Prepared For The Bear Market to arrive! Have you think of any strategies to prepare for the coming bear market?