Read:
The Impact of the Likely U.S. Rate Hike on Asian Equity Markets
"Although QE tapering and rate hiking are two separate issues, the implication to the markets is similar, namely rising interest rates, tightening capital funding, capital outflow from emerging economies, and currency instability. All of these will have a much worse impact on economies with large current account deficits, high external borrowing relative to reserves, high inflation, and deterioration in economic fundamentals."
"That period of rate hiking had the worst effect on the U.S. bond market compared to the other two, during which the Fed took more measured paces. The impact was more pronounced on Asian equity markets than that of the U.S."
- Although 2016 market has a gloomy start, but I think the turbulence is far from GFC and subprime unless *touchwood* some canon got triggered again. Fed's rates hike spells confidence in the US economies, Yuan's depreciation might boost export from China, oil prices benefit emerging Asian economies but hindered the stock growth.
- Caution is to be exercised in commodities, bonds and cyclical stocks
- As we can observe from previous crises, dip was fast but rebound was fast as well. It's a matter of how you buy into the dips those stocks that are fundamentally sound to benefit from the gains.
- STI hasn't quite come to the big dip yet if you look at it over years long time frame (chart above). I would expect the conservative support to be at 2500 to 2600 range if investors continue on sell-down this year (for whatever reasons that I can't foresee).
Even if it's the start of a 'roller coater dip', I would continue to fasten my seat belt, hold tight and just ride the course. #conviction #don't scream
Which point would STI consolidate at?
What's your take as an investor? Trend traders what do you see?