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Long-term Value InvestorFinal stage (April 9, 2024)
Preface: After falling nearly 1,000 points from its high last week, the U.S. stock market rebounded on Friday; meanwhile, the Hong Kong stock market opened higher after the long holiday but seemed to lack momentum to rise further, hovering around 16,500. This seems like the calm before the storm...
U.S. Market Update
Last night, the three major U.S. stock indices closed almost flat: $Dow Jones Industrial Average(.DJI.US) fell slightly by 11 points to close at 38,893; $NASDAQ Composite Index(.IXIC.US) rose by 5 points to close at 16,253; and the S&P 500 fell by less than 2 points to close at 5,202.
Hong Kong Market Update
$Hang Seng Index(00HSI.HK) once again challenged the 17,000-point level this morning but ultimately failed to break through. It closed at 16,828, up 95 points, with a turnover of HKD 82.9 billion.
Strategy
As mentioned earlier, gold has been a highly watched investment over the past month, with prices reaching $2,350 during Asian trading hours today. In the long run, gold is just getting started, but I believe a short-term correction is imminent. Recent news reports suggest progress in the Israel-Palestine ceasefire talks, with some indicating a ceasefire agreement could emerge this week. If true, geopolitical risks would decrease, and gold could likely correct. Therefore, I have closed leveraged gold products (e.g., $FL2CSOPGOLD(07299.HK) and $Pro Ultr GLD(UGL.US)) or derivatives, retaining only physical gold.
The three major U.S. stock indices are consolidating near their 52-week highs, making U.S. stocks unattractive at this stage. On the other hand, it’s also not a good time to heavily short U.S. stocks. As mentioned in the previous article, the global investment market in Q2 is fraught with risks: I reviewed several major market indices (U.S., U.K., Germany, France, Japan, India, South Korea, Taiwan, Singapore, Hong Kong, and China) and found that except for China, Hong Kong, and Singapore, all others hit new highs, many of which surged suddenly over the past quarter or two. Yet the world is turbulent—Europe has the ongoing Russia-Ukraine conflict, Asia has the Israel-Palestine issue, and there are financial wars, trade wars, and information wars. With constant natural disasters and human-made crises, it’s hard to justify the stock market’s relentless rise. Thus, I boldly speculate that global stocks are nearing their peak.
As for $Hang Seng Index(00HSI.HK), recent trends suggest a triangular consolidation:
This is a breakout pattern. Market sentiment toward Hong Kong stocks is pessimistic, but market direction often moves contrary to sentiment. I believe if $Hang Seng Index(00HSI.HK) breaks out, it’s more likely to be upward. To benefit from this potential breakout, my top picks are $HKEX(00388.HK) and $BABA-W(09988.HK). The former would benefit from increased turnover if Hong Kong stocks rise, while the latter is a lagging major component.
If a breakout happens, it should occur in the coming days—keep an eye out.
Good luck to all.
(The above views are my own. The investment strategies provided may not suit everyone and should not be seen as an invitation or intent to buy or sell financial products. Stock prices can rise or fall, even becoming worthless. Trading stocks may not guarantee profits and could result in losses. Investors should exercise caution and consider this as one of many factors in their decisions.)
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