Rate Of ReturnRetail investors often focus too much on the short term and ignore the implications of long-term trends. A logical review of the market 240601.
Key points of this article:
𝒪 Monthly chart trend review
𝒪 Once-in-a-lifetime entry opportunities at key monthly levels, with more trading chances than imagined
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◉ Investors are generally short-sighted
Investor myopia is a common cognitive bias.
When using technical analysis, most retail investors focus on intraday charts like 1-minute or 1-hour charts, while few pay attention to daily, weekly, or even monthly charts.
Smaller charts naturally provide more data but also introduce more noise, increasing overtrading risks.
Using larger charts as reference helps identify overall trends before trading on smaller timeframes.
When small and large chart key levels align, it presents excellent trading opportunities.
Our monthly market reviews aim to help readers confirm major trends and capitalize on excess returns from overtraders' mistakes.
◉ Asian markets—Hang Seng with long upper shadow, Nikkei oscillating narrowly at highs
Hang Seng May futures hit lows of 17,520 and highs of 19,772, but closed at 18,009, up just 290 points.
Despite the long upper shadow, we can interpret it as a large bullish candle followed by a bearish one.
This perspective suggests a potential head-and-shoulders bottom pattern near 18,000.
If 18,000 breaks, next supports are 17,050 and 15,500, potentially forming head-and-shoulders and double-bottom patterns.
Nikkei May futures showed minimal movement, up just 20 points (0.05%), offering little trading insight.
The optimal long-term buy point remains near 34,240.
◉ US markets—Pullback from highs
Nasdaq and S&P 500 futures hit new highs in May, rising 6.07% and 4.83% respectively.
US stocks remain in strong uptrends with no reversal signs—traders shouldn't prematurely bet against them.
Our capital isn't large enough to require early positioning; entering after trend confirmation suffices.
Russell futures underperform due to containing too many stocks of varying quality.
For small-cap performance, monitor VBR and VBK ETFs—small-cap growth stocks significantly lag value stocks, with the latter recently showing entry patterns.
US Treasuries barely reclaimed key levels after April's breakdown, but weak trends suggest watching for double-bottom opportunities at 105.
◉ EUR/USD—Fluctuating within consolidation range
EUR/USD's consolidation is clear, with multiple May entry opportunities.
Currently at mid-range, long-term accumulation interest wanes while short-term lacks clear direction.
◉ USD/JPY—Clear resistance-turned-support
After April's major breakout, USD/JPY retested resistance in May but quickly rebounded, maintaining strong bullish momentum.
As mentioned last month, we expect USD/JPY to reach 180.
◉ Cryptocurrencies—High volatility
Both Bitcoin and Ethereum recovered April losses in May, sustaining strong uptrends.
Ethereum showed slight strength due to spot ETF news, but overall differences are minor for long-term entries.
◉ Gold—Weakening momentum
Gold has risen for three months since March's historic breakout but faces clear resistance near 2,400 in April-May.
This represents a "bullish but no trade" zone—stop losses are too distant relative to potential rewards.
◉ Crude oil—Battle between head-and-shoulders top and double bottom
Crude followed the downtrend in May, with 84.3 being the clear long-term resistance and optimal shorting level.
First profit target for shorts is 67.35, coinciding with bulls' double-bottom defense.
Whether it breaks 67.35 to trigger panic selling isn't discernible from this pattern.
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