The Currency War Big Picture Analysis for Gold, Silver & Stocks
Traders Unscripted: Market Timer Fari Hamzei PT.3 - Quant Trading
Traders Unscripted: Market Timer Fari Hamzei PT.2 - Failure & Success
Fear that China may Overheat Triggers Surge in U.S. Dollar.
Despite a move by China to tighten its monetary policy, U.S. equity markets mounted a strong recovery late in the trading session on Wednesday. This served as a sign that there is plenty of money on the sidelines and that investors continue to maintain a “buy the dips” mentality.
Fear can manifest itself in many ways and I don’t see fear dissipating any time soon. What should long term investors do? I think an analysis of previous bear markets will be helpful. You may be surprised to know that bear markets in the mold of the 1929 Great Depression are actually a blessing in disguise for investors.
Speaking of fear, stark naked fear has descended on stock markets everywhere. Wall Street is in a bloodbath and Asian markets are not having an easy time either. The Straits Times Index dropped over 30% from its zenith and Shanghai ‘A’ index tumbled over 65%. Seen from a positive lens, it is a sign that we are closer to bottoming out though.
The brutal sell-off in financial stocks over the past couple of weeks smacks of the kind of real fear typically seen during the capitulation phase of bear markets. While the underlying problems that created this maelstrom are real, the market is behaving as if every domestic financial institution is at risk of failing--which is simply not true.