The +1000-point rally in the Hang Seng may be the shot that signals a reversal in trend for emerging markets - the beginning of the end of a long down trend (which in my opinion began in January 2018).
Emerging markets tend to lead the global stock market.
I will probably begin scaling back into emerging markets, with a longer time horizon. Unlike recent buy/sell alerts, it probably won't matter whether you buy in today, tomorrow or next week (recall the 't+5' study).
Not having bought back in last night? I don't view it as a 'missed buying opportunity.' First of all, none of us participated in the recent down draft. Secondly, it's appropriate to wait for a catalyst before making a trade - we open positions only on high(er) probability bets.
Obviously, I've been in and out of the markets over the past few weeks. I was a lucky dog and sidestepped the recent decline. I'll be scaling back in.
ReplyDeleteThe t+5 study was an interesting retroactive study of trading results based on time of entry following a buy/sell signal. In a nutshell, the astonishing result was that best results occurred not by opening on the day of the signal or the few days following the signal - but on the fifth day following the signal!
Looks like we rip higher this morning.
ReplyDeleteI ended the regular session on Wednesday about 88% invested. Investment portfolio-> a mix of VTSAX (total US market) + VTIAX (total world market ex-US) + VEMAX (emerging markets). Trading portfolio-> positions in iEMG (emerging markets) + FXI (China 'H' Shares) + ASHR (China 'A' Shares).
Considering a position in GDX (gold miners) this morning. Maybe BABA (Alibaba).
Sorry for the late notice - I trimmed most of my positions today. Why?
Delete(a) Had I been prescient enough to buy two days (rather than one day ago), I'd be taking it all off the table for a two-day +3% gain. (No complaints about a one-day +1.2% gain.)
(b) Equity put/call ratio closed @ 53%. I didn't know it at the time - but I sensed it.
(c) Today's buyers will be tested.
+11% ytd, trailing benchmark by -4.8%.
I apologize for the late notice, but as you'll learn in a moment - should you decide to open a position in VEMAX you'll probably end up with a better basis than I did.
ReplyDeleteHere's what I'm thinking. Trade talks will begin again on Thursday. Expectations are low - in my opinion low enough that even just showing up for negotiations will be enough for a short-term spike.
EEM/ VWO (emerging markets) both ended the day off ~ -0.8%. To save a trading commission (Fidelity waives all commissions on trades in iShares), I opted to open a position in iEMG. What about VEMAX (Vanguard), which is the vehicle I used in my retirement accounts - well, it closed off just -0.15%!
Clearing all positions end of day and moving to cash. Will be taking an extended leave from trading.
ReplyDeleteEmerging Markets A Buy!
ReplyDeleteThat's my take. Just about everyone has been shaken out of the sector. If you want in, today's the day.
Another perfect setup for a trend continuation trade...entirely reversed by the Donald (who wants to limit capital flow from the US-> China stock market and/or delist Chinese companies from US exchanges)! My advice? Take the hit. We have no clue how China will respond.
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