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Long-term Value InvestorThought I was late, but the market is still sluggish. The still valid June strategy is out (June 10, 2024).
Preface: Remember that StockPro mentioned in last month's article that June this year would not be easy. The first half of June has passed, and I thought the June strategy that hadn't been released yet was outdated. However, the market has been stagnant over the past week, with little difference from the previous week. So, StockPro will take a look with everyone at the risks and opportunities in June.
U.S. Market Situation
$Dow Jones Industrial Average(.DJI.US) and $NASDAQ Composite Index(.IXIC.US) have frequently shown "divergent trends" recently. The NASDAQ has been "carried single-handedly" by $NVIDIA(NVDA.US)'s earnings and stock split news. But NVIDIA alone cannot sustain it for long, and eventually, the NASDAQ will succumb to gravity. Before that, StockPro accidentally noticed a potential head-and-shoulders pattern forming in the Dow Jones:
From the chart above, if the head-and-shoulders pattern holds, the neckline would be around 38,000 points. This 38,000 level, calculated using previous methods, is also a critical point. StockPro personally believes this 38,000 level is worth watching. To guard against potential traps, StockPro would leave an extra 300 points of leeway: in other words, 377 would be a technical indicator determining whether the U.S. market is turning bearish.
Another thing worth noting is the exchange outage. Setting aside all conspiracy theories, let's analyze it purely from a technical perspective. The NYSE system can handle a significant trading volume, so if even its system couldn't cope, the trading volume must have been staggering. Was this volume due to big players buying or selling? This is purely StockPro's speculation.
For the U.S. market, StockPro expects a very "exciting" performance in the second half of the year......
Hong Kong Market Situation
$Hang Seng Index(00HSI.HK) has been hovering between 180 and 187 since June began. Last week, almost every trading day saw a high open and low close, which has likely shaken many investors' confidence in the Hong Kong market.
Strategy
StockPro has always felt that June is not an easy month to make money. Last month, StockPro adjusted the stock/cash ratio to 3:1 and hasn't changed it since, as there’s no high-probability short-term trading tool available. Given the current situation, the best strategy this month is to stay patient and observe before acting. Unless there’s groundbreaking news, it’s better to hold off.
(The above views represent personal opinions only. Any investment strategies provided in this article may not be suitable for everyone and should not be construed as an invitation or intent to buy or sell financial products. Securities prices can rise or fall, even becoming worthless. Trading securities does not guarantee profits and may result in losses. Investors and clients should exercise caution and consider this as one of many factors in their investment decisions.)
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