stock market crash Archives

Stock Market Crash with Coronavirus Pandemic

Posted on March 12, 2020 Written by Dr Tee (Ein55)

There are always 2 sides of news, outcome depends on which side you position. Learn further here to position in both Coronavirus and Stock Market Crisis.

1) Fear

Bad news: Coronavirus is now a PANDEMIC (declared by WHO).

Good news: It has been a fact (global speading) for weeks, only a label now

2) Wealth

Bad news: Global economy will get more hit (global travelling restrictions by most countries, consumer and retail sectors would lose money), global stock market would fall further (so far down by about 20%), people may lose jobs, etc.

Good news: Global stock market is cheaper now, investors could get highly discounted prices to buy stocks

3) Health

Bad news: Many people would die after infected

Good news: Fatality rate is actually less than 2%, even much lower for those less than 50 years old with stronger immune system.

There are in fact more people die in common flu each year, awareness in Coronavirus could directly help to minimize death in common flu, therefore more lives would be saved in this health crisis.

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So, stay calm, be cool, both for Coronavirus pandemic and also global stock market meltdown. However, one has to take active actions in both crisis:

Coronavirus

1) Enhance personal hygiene (wash hands, wear mask if unwell, etc)

2) Social distancing (avoid crowded places)

3) Stay healthy (exercise & healthy diet, optimistic, etc)

Stock Market

1) Buy – Mainly for contrarian investor (eg. Warren Buffett), aligned with lower optimism at country/world levels (L3-L4), stock market may have further downside.

2) Hold – Mainly for fundamental strong stocks which are defensive to sustain through possible global financial crisis

3) Sell – Mainly for trading stocks, exit following the plan (eg when down by 5%, 10% or 20% or breaking below certain price support).

4) Wait – Mainly for trend-following traders or investors for clearer market signal.

5) Shorting – Mainly for short term traders to align with current short term bearish market, profiting from shorting with breaking of support, following lower highs and lower lows pattern.

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Currently with 20% price correction in global stock market, it is still a mini bear, medium term investors may start to do homework but position only after there is a clear price reversal (eg. economic stimulus plans by G7 or fading of Coronavirus in summer time, etc) and cut loss has to be included in plan.

If not, need to be patient to align with longer term lower optimism, especially for Level 3 (US) and Level 4 (world), not just on individual stocks or sectors which are falling knifes in prices, not suitable for traders.

Do you feel better now that you have a choice to be positive or negative? More importantly, position in the right side with right action for both Coronavirus and stock market crisis. Learn from Dr Tee free 4hr investment course to convert the crisis into opportunity: www.ein55.com

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Crashes in Global Stock Market and Oil Market

Posted on March 10, 2020 Written by Dr Tee (Ein55)

Global stock markets crashed yesterday, dropping as much as 7% (with protection of circuit breaker) for US stock market, 6% for Singapore stock market. There could be more downside if fearful emotion continues.

Oil crisis comes faster than Coronavirus spreading, Brent crude oil price dropped to about US$30/barrel overnight. Saudi could cut oil price because the production cost per barrel is the lowest. Price war is lose-lose for for both OPEC and non-OPEC, see who could last longer. Eventually, this could trigger Level 3 country financial crisis as national income would be reduced significantly.

Crude oil is a giant commodity by default, it could not drop to $0 (unless end of the world when energy is not required anymore, then investment or money is also no longer important) as a stock but it could stay at low optimism level for a long period of time, especially under manipulation of certain forces (eg. OPEC). This drama is not new, episode #1 was about 5 years ago, aiming to wipe out shale oil producers in US with higher production cost. Eventually, the shale oil producers still survive but becomes more efficient in operation, harder this time in Episode #2 of global oil price war.

It could be no-brainer investing when Brent crude oil dropped to or below US$30/barrel, one could position in crude oil through USO (oil ETF) as Saudi and Russia could not sustain in long term at this low price (perhaps only Saudi could still make a profit due to low production cost). However, such a contrarian investor (similar to Warren Buffett style) needs to have strong holding power, at least can hold longer than oil produce countries before they burned out first.

Similarly there are many blue chip stocks, buy low could get lower in bearish short term market, not suitable for speculator. Global stock market is not yet very bearish yet, so far is only a major correction. Again, shorter term trend-following strategy is safer during this uncertain market, either for exit (could have exited last week if following signal, eg. S&P 500 below 3000 points) or entry again.

Everything has 2 sides, when oil price is crashed, consumers such as car drivers are happier with lower petrol cost. However, one has to look at a bigger picture, lower inflation or cheaper price is not always a good news because when global economy is weak, one could even lose the job because company may be eventually losing money as well.

Learn further from Dr Tee to leverage on current Oil Crisis and potential global financial crisis with stock market crash. Register for Dr Tee Free 4hr Course to position with crash in global stock market: www.ein55.com

Stock Market Crash with Coronavirus Pandemic

Crashes in Global Stock Market and Oil Market

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