Here it comes, the long waiting Papa bear. Pouncing on the tire bull hard and fierce.
Asia market majority down for the first four days. On the fifth day it retraced. Where else for US and Europe markets, for five days straight they closed in red.
Analysts, fund managers.........put the blame on China, because of their circuit breaker. The circuit breaker caused panic to the sell down. Policy shift by China regulators late on Thursday night helped to cool down Friday China market which has caused the global market to tumble? Again was that true? Absolutely nonsense.
Tuesday and Wednesday China market closed positive but all other markets closed in red. Friday, China and other ASIA (except Nikkei) markets closed positive, where else the Europe and US markets closed in red. So ask yourself, was it true that China was the spark that caused the fire. Was it true that circuit breaker caused panic to investors and traders that lead to the sell down?
Have you seem index dropped by 15%, 20% and even as much as 27.5% in hours? Have you seem a stock dropped by 70%, 80% and even 90% in a day? Why the China market on Monday dropped so much as compare to the others and especially Thursday, just half an hour after the market has opened, the circuit breaker alarm was triggered?
Somewhere 3Q 2015, China yuan devalued. It lead to the sell down on the China and global markets. Starting from 8-Jan'16 major shareholders are not allows to sell their stock for six months. The later policy caused the big crocodile to panic and they started to sell as many as their stocks as possible on Thursday, before 8-Jan.
Tension on Saudi and Iran was another reason that caused panic to the stock market as well as oil. Nevertheless, these two areas, China and the tension between the Saudi and Iran were not the root caused of this crisis.
As I mentioned, artificial everywhere. Every countries were/are printing money. Remember I gave this example: (http://achua138.blogspot.sg/2014/12/y2015-is-going-to-be-volatile.html) As I said artificial liquidity. Today situation is like you are boiling a "ba ku teh" soup. Not salty, you add salt, not spicy, you put in more pepper, not enough water, you add more water.....you just continue to add ingredient after water, water after ingredient. Although you may be boil the soup with low heat, but this boiling has been carry out day after day, week after week...........end of the day how you think the "ba ku" going to look like and how the soup going to taste like? Another word I used recently in Chinese 温水煮青蛙.
And yes, this is the root caused. Many things that happened over the past few years were artificial. Money, bull charge........ we are going to pay a price on this.
Last Friday, I saw a lot of analysts came out trying to comfort everyone - don't worry, this is only the first week of Y2016...........this year the market is going to be better than 2015.....some even suggested to buy on dipped........recommended numerous stocks....saying how much undervalued on those counters......
As I mentioned in my last posted (http://achua138.blogspot.sg/2016/01/prepare-for-much-more-interesting-2016.html) any retracement/pull back is an opportunity for you to sell if you are holding any long position. In Chinese, I called it 逃命反弹.
I knew some of retail investors/traders listened to those analysts and trading representatives advice, they entered on Friday to long some of the recommended counters. My advise to them is please know where is your cut loss. When market turned against you and hit CL, make sure you cut and don't wait until it drop another 50 tics, 100 tics.......by the time you sell, the market is about to turn.
Sit tight, tighten your sit belt and enjoy the ride.
Asia market majority down for the first four days. On the fifth day it retraced. Where else for US and Europe markets, for five days straight they closed in red.
Analysts, fund managers.........put the blame on China, because of their circuit breaker. The circuit breaker caused panic to the sell down. Policy shift by China regulators late on Thursday night helped to cool down Friday China market which has caused the global market to tumble? Again was that true? Absolutely nonsense.
Tuesday and Wednesday China market closed positive but all other markets closed in red. Friday, China and other ASIA (except Nikkei) markets closed positive, where else the Europe and US markets closed in red. So ask yourself, was it true that China was the spark that caused the fire. Was it true that circuit breaker caused panic to investors and traders that lead to the sell down?
Have you seem index dropped by 15%, 20% and even as much as 27.5% in hours? Have you seem a stock dropped by 70%, 80% and even 90% in a day? Why the China market on Monday dropped so much as compare to the others and especially Thursday, just half an hour after the market has opened, the circuit breaker alarm was triggered?
Somewhere 3Q 2015, China yuan devalued. It lead to the sell down on the China and global markets. Starting from 8-Jan'16 major shareholders are not allows to sell their stock for six months. The later policy caused the big crocodile to panic and they started to sell as many as their stocks as possible on Thursday, before 8-Jan.
Tension on Saudi and Iran was another reason that caused panic to the stock market as well as oil. Nevertheless, these two areas, China and the tension between the Saudi and Iran were not the root caused of this crisis.
As I mentioned, artificial everywhere. Every countries were/are printing money. Remember I gave this example: (http://achua138.blogspot.sg/2014/12/y2015-is-going-to-be-volatile.html) As I said artificial liquidity. Today situation is like you are boiling a "ba ku teh" soup. Not salty, you add salt, not spicy, you put in more pepper, not enough water, you add more water.....you just continue to add ingredient after water, water after ingredient. Although you may be boil the soup with low heat, but this boiling has been carry out day after day, week after week...........end of the day how you think the "ba ku" going to look like and how the soup going to taste like? Another word I used recently in Chinese 温水煮青蛙.
And yes, this is the root caused. Many things that happened over the past few years were artificial. Money, bull charge........ we are going to pay a price on this.
Last Friday, I saw a lot of analysts came out trying to comfort everyone - don't worry, this is only the first week of Y2016...........this year the market is going to be better than 2015.....some even suggested to buy on dipped........recommended numerous stocks....saying how much undervalued on those counters......
As I mentioned in my last posted (http://achua138.blogspot.sg/2016/01/prepare-for-much-more-interesting-2016.html) any retracement/pull back is an opportunity for you to sell if you are holding any long position. In Chinese, I called it 逃命反弹.
I knew some of retail investors/traders listened to those analysts and trading representatives advice, they entered on Friday to long some of the recommended counters. My advise to them is please know where is your cut loss. When market turned against you and hit CL, make sure you cut and don't wait until it drop another 50 tics, 100 tics.......by the time you sell, the market is about to turn.
Sit tight, tighten your sit belt and enjoy the ride.
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