I’ve written last Friday (12 June) on my Patreon to my 2 beautiful subscribers, to be weary in specific positions and how to hedge against them.
Previously, when VIX spiked up you could see stock prices dropping but as you know, life have been confusing these days and so have the stock market too.
Technical Analysis:
Market have broke off the wedge pattern after my previous post, signalling bullish momentum in place. With $45.5 as structure resistance level, if broken, a higher probability for it to trend higher will be greater.
What this entails
As you have seen and read many articles showing you what would the future economy will be and, which you would have logically deduce the many possible outcome. Hence, I will not bore you with more fundamentals as it seems now would be a wild man’s guess.
What I will share with you is that, during this crisis some stocks/reits have made a new high and some stocks have made a new low. When stocks/reits makes a new high, a retracement is needed. Similarly, stocks making a new low will need to retrace before continuing further. – Look up the stock that you want to buy/sell
A highly likely situation for stock/reits price to play out in the future would be, stocks that are trading at their new highs will retrace back and stocks that are trading lower will continue to trade lower. Stocks that are trading lower have been price through anticipation by “forward-looking” participants of the market and will continue to do so, statistically shown. – It might just be the opposite case like Hertz but a roulette game is not my game.
Didn’t you say market is recovering?
Previous recoveries had retracements in asset prices.
The question now is how rigid should you be in times of uncertainties? If you’re stuck and you need a singular answer, the answer is probably you have no exit plan at all or probably no plan from the start.
My take
You can read up on friedman / kuttner / adam smith and many others to find reasons why Government intervention wouldn’t work and will it might work. But the matter of fact, every bet is a bet on probability.
Protect your position – you can use options to hedge, you can wait for market to recover then buy, you can realise ur capital gain and hold.
Nonetheless, it doesn’t matter who is right or wrong, is about how much you make/loss in the end. – Use what make sense to you.
It is indefinite that market will recover, is just how soon or how late. – perspectives are everything.
May the odds be in our favour!
p.s you can support my work at https://www.patreon.com/financialveracity and get private updates by me on every Monday, Wednesday and Friday! Also I’m on instagram!
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