Last weekend, we conducted another online workshop on the basics of trading and investing, and since it is a SkillsFuture Credit-Eligible Course, participants could use their SkillsFuture credits to pay for the course instead of cash.
Thanks for the support! ?
During the 9 hours of training, participants learnt portfolio strategies to build and protect their wealth, as well as trading skills like market-timing, chart-reading and risk management to improve their trading results.
Here is some of the feedback and learning points from participants, after our hands-on market analysis session to find trading opportunities in the market.
If you are keen to learn more using your SkillsFuture credits, you can check out our courses:
Last week, we saw a continuation of the existing trends, but since these trends have been running for quite a while, it is likely we will have a short-term rebound, even if the longer-term trends remain intact.
We saw weakness in the USD, and strength in commodities like good, oil, agriculture, etc. This is in line with the inflationary pressures we have been observing.
The most interesting thing is the rebound in stock prices, but it is likely only temporary before the major downtrend continues.
Crypto markets are facing huge weakness after the Luna/UST saga, and have somewhat decoupled from stocks for the last week.
Product: Forex
Name: US Dollar / SG Dollar
Ticker: USDSGD
Exchange: N/A
Analysis: Following up on this, after hitting the TP near the top, it has come back down, and is now setting up a trading opportunity in the opposite direction.
Analysis: With the decrease in supply due to the Russian-Ukraine war, oil prices are steadily heading up after the initial spike. It is possible that it could test new highs.
EP: current price, or on pullbacks
SL: $110
TP: $130, or new highs!
“Here [in Davos] everybody’s pessimistic,” says Standard Chartered Chairman José Viñals. “But when I ask them how their business is doing, the picture is wonderful. It may be that the business reality catches up with the [very negative] macro-political reality.”
Analysis: Following up, Ethereum is now at the critical price level. Our trade call remains the same.
If prices break below this level, then it will be quite dangerous. The overall price pattern does not look that bullish.
On the other hand, when we look at the long-term weekly chart, we can see 8 consecutive weeks of price decline, which suggests at least a potential technical rebound.
The weekly 200-EMA also provides some potential support. The weekly RSI is also very near the oversold zone.
In short, the trend is uncertain but there is a high chance of a rebound in the short/medium-term.
Last week, the stock market continued to fall, so we continued to hold onto our short positions. I am not sure how much more it will fall, so I will just use a trailing stoploss to lock in profits as it continues to fall.
We also decided to add some long-term bond positions, since bond prices have dropped significantly, and we profited from our shorts on the way down.
Crypto remains a wild card, so I am holding a small position (with lots of cash on the side to add more later on), while waiting for a clearer bullish sign to appear.
Overall, we are thankful our portfolio is positive for this year, given the many wild fluctuations in various markets. This is the importance of diversified portfolio allocation, and not putting all your eggs into one basket (one asset class).
? Still holding a lot of cash because now is the time to play safe and make small gains instead of swinging big.
? Overall still net long crypto and net short stocks, but started buying up growth stocks that have gone down the most.
? Decided to take a long position in bonds which is a bit contrarian since most people are expecting interest rates to go up and bonds to go lower. But I have already profited a lot from the move down from the top, so I am willing to start accumulating at this price.
Forex & Commodities Market Highlights
Wheat, corn, soybean, rapeseed and palm oil prices have rallied since Russia invaded Ukraine, with wheat and corn prices up around 60% and 30%, respectively, since the beginning of 2022.
Product: Commodity Index Fund
Name: Teucrium Wheat Fund
Ticker: WEAT
Exchange: NYSE
“The Fund is an actively managed, long only, diversified agricultural ETF that provides futures price exposure to corn, wheat, soybean, and sugar markets.”
Analysis: Looking at the long-term weekly charts, the ongoing war and inflation has driven prices up.
EP: $11 to $13
SL: $10
TP: $17+
Stock & Bond Market Highlights
Comparing all the stocks in my watchlist against the S&P 500. Thinking if I should start buying some of the worst performers to hold for the long run.
Comparing the various stock sectors within the US stock market, from top to bottom:
Last week, the biggest news dominating the headlines is the depegging of UST and the crash of Terra LUNA token, which went from a high of $100+ to almost $0 in a few days.
This caused a lot of funds as well as retail investors to lose significant sums of money, especially since many were staking UST on Anchor protocol for 20% APY, which seemed like a very good deal.
I mentioned during my last Skillsfuture course that the risk of depeg was real, and they should either hedge it (by shorting the UST perp futures), or switch to some better yield farming strategies with much better returns and lower risk. Hence, I managed to dodge this bullet by not having any exposure to UST or LUNA.
Overall, I have the bulk of my portfolio in cash, with a net short position on equities.
For the week ahead, I have posted in my “Daily Trading Signals” some potential buying opportunities in the stock market.
In the past few weeks, we have seen huge declines in various markets, and thankfully the bulk of my portfolio is market neutral (not affected by market movements).
Yield farming continues to generate returns, while crypto losses (which are sometimes hedged) are balanced by gains in the stock market (net short position), so overall my portfolio is still positive.
There are also gains from the appreciation of the USD (against the SGD), since the bulk of my portfolio is in USD assets.
Now, the strategy is to continue to ride on the downtrend (swing trade and hedging), while waiting for the dust to settle so that I can buy more stocks/crypto when the times comes.
Forex Market Highlights
USD remains on top, as it is viewed as a safe haven when everything else is crashing.
Product: Forex
Name: US Dollar / SG Dollar
Ticker: USDSGD
Exchange: N/A
Analysis: Following up from the last analysis, it has resumed the uptrend after pulling back to test the breakout level.
EP: 1.370 to 1.375, or any pullbacks
SL: 1.365
TP: Near 1.400
Analysis: Initially I thought that crypto might be able to break free of the correlation with tech stocks, but it seems for now they still move very much in tandem.
Hence, Ethereum has not been spared the recent large drawdown.
The next major support level is the light green rectangle, where prices are currently at, and which might lead to some rebound.
Since the trend is uncertain, I will avoid adding more positions for now, and carefully hedge existing positions.
A few hours ago started hearing that the Luna fundraise had fallen apart.
Difficult to imagine any firm would put their reputation on the line back this dumpster fire.
It's over.
(deleted original tweet about this to not jump the gun, but now it seems clear)
Sorry for the multiple articles on UST and Luna, it is currently the biggest news in the Crypto market and has large ramifications. Many retail investors became broke overnight.
Here is one of the best overview explanations: https://newsletter.banklesshq.com/p/ust-luna-meltdown-what-happened?s=r
The Terrablock has officially halted and UST has remained de-pegged from the US Dollar since 9th May 2022.
With the market in risk-off mode and making new lows, it is a good thing our current largest positions are in cash and yield-farming, which is why our portfolio is still net positive even though most markets have dropped by 20-80% from the highs.
Recently, a lot of our currency trades have been very profitable, because the market started trending strongly, which makes it easy to ride and profit from these trends (as compared to the stock and crypto market which is more choppy).
At this point, I have quite a sizable short position in stocks, and I will close it only when I think the market has fallen enough. When that happens, I will take my profits and switch to going long. When will that happen? Stay tuned in my “daily trading signals”!
All the safe-haven assets are now at the top, showing that the market is in risk-off mode.
Product: Forex
Name: Aussie Dollar / Swiss Franc
Ticker: AUDCHF
Exchange: N/A
Analysis: Following up on this, the TP was hit, giving us a profit of about 230 pips! ????
Now, it looks like it is heading down, so there is a new shorting opportunity.
EP: Current price, or on pullbacks
SL: 0.6980
TP: 0.675, 0.660
Product: Forex
Name: US Dollar Index
Ticker: DXY
Exchange: N/A
Analysis: The USD continues to spike up, but such a pace of increase is not sustainable, so it should have a pullback soon, maybe when it hits the major resistance near $105.
Product: Forex
Name: Euro vs US Dollar
Ticker: EURUSD
Exchange: N/A
Analysis: Following up on this trade (weekly chart), our first TP has been hit, with 800+ pips profit! ????
Now, let’s see if it can break the support and reach the next TP.
EP: 1.13 to 1.15, or on pullbacks
SL: 1.16
TP: 1.055, 0.920
Product: Forex
Name: New Zealand Dollar vs US Dollar
Ticker: NZDUSD
Exchange: N/A
Analysis: Following up on this pair, it has exceeded our expectations and went past our TP, clocking 500+ pips profit! ????
Now, the move looks a bit oversold, so I would expect a pullback/rebound first even if it continues going down later.
EP: 0.687 to 0.690
SL: 0.700
TP: 0.665
Stock & Bond Market Highlights
Product: US Stock Index
Name: NASDAQ 100
Ticker: US100
Exchange: N/A
Analysis: After a small rebound, prices look ready to break new lows again.
Prices have only declined about 24% so far, so there is still a lot more room for a stock market crash if it happens.
Although the NASDAQ 100 and Ethereum have been quite correlated so far, I am hoping that the correlation will break at some point. (Because I am bullish on Ethereum.)
EP: Current price, or on pullbacks
SL: $13,635
TP: $12,400, $11,000
Analysis: Following up, Ethereum has finally reached the bottom of the trend channel (after a 25% decline), and is testing the bullish trendline.
This looks like a good low-risk area to take a long position (or add more long positions).
EP: Current price, or on pullbacks
SL: $2680
TP: $3700
The sale of nonfungible tokens, or NFTs, fell to a daily average of about 19,000 this week, a 92% decline from a peak of about 225,000 in September, according to the data website NonFungible.
The number of active wallets in the NFT market fell 88% to about 14,000 last week from a high of 119,000 in November. NFTs are bitcoin-like digital tokens that act like a certificate of ownership that live on a blockchain.
Rising interest rates have crushed risky bets across the financial markets—and NFTs are among the most speculative.
