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  • Writer's picturewhatsyourtradingangle

The Story of the New Year is Shanghai Composite Index

On 6 Jan 2020, 12.33pm, I emailed my Clients my latest post titled 'The Story of the New Year is Shanghai Composite Index'. Below is the full transcript of my write up: Dear Clients Quite a few things to say, so it will be in point form: 1. Do not for a moment get too excited now with the Iran problems, FYI the S&P500 Index (SPX) has not even dropped/crossed below its Bollinger Bands (BB) midpoint yet. We'll see how it develops over the next few weeks. Pls call me for updates. 2. The USD Index (DXY) has continued to weaken against its majors. Its downside breakdown is not a sealed deal yet but so far the good news is that bounces have been weak. 3. More importantly, the Shanghai Composite Index (SSECOMP) saw a gap up on Thursday, 2 Jan 2020. This gap up above multi-month resistance is no ordinary pop - from the Chart*, you can call it an Inverted Head & Shoulders pattern (IH&S) or Cup & Handle (C&H) pattern. Either way, the short to medium term connotation is bullish. The IH&S pattern targets 3311 (>7% upside) while the C&H pattern targets the 3214 level (>4% upside). Of course support at 3000-3042 needs to be defended at all times. 4. As explained many times before, the general strength of the Chinese markets makes sense since the direction of the USD has a general inverse relationship with Emerging Markets stock indices (EEM ETF) & Chinese equities is one of the largest component of the EEM ETF (>34%). Other major components are Taiwan/Korea (22%), India (8%), etc. Click here to see them all -…/239637/ishares-msci-emerging-mark… 5. Now, the up move in Chinese markets is likely to continue to give the tailwind to the local market (Singapore). Capitaland, which derives 41.4% of its revenues from China, saw a similar gap up above its multi-month resistance, so do check it out. Capitaland is also sporting the same bullish patterns as per the SSECOMP, in case you ask. Now, some interesting small to mid caps (old names) have started to move too. Clients who like to do short to medium term swing trades, you may wish to drop me a line for the list of small to midcap stocks to look at**. The list looks at volume, recent announcements, market depth structure and chart patterns. Pls do your due diligence and check against their fundamentals before embarking on any purchases. Live Long & Trade Well! *Apologies I'm working on very tight schedules on multiple projects, will attach respective charts likely in another email. **In case you doubt my track records for eyeing small to mid caps in the local market, look no further than my 2017 posts (when SG market was in bull phase and small-mid caps were fun then!) where I unveiled alpha-seeking & market-beating small-mid cap stocks then. Here’s the link: & Thank you & rdgs Thomas Ng, CMT Principal Trading Representative 首席股票经纪 #plsreaddisclaimer #spx6jan20 #bullishSSEC6jan20 #SGsmallmidcapslist6jan20'

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