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Some people have been thinking that nothing can bring the stock market down, because it has been steadily chugging up despite all the negative news of virus, lockdowns, unemployment, trade wars, and now riots.

So can the market continue to climb up forever? What will it take to actually bring the market down?

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Market Overview

The strong bullish trending markets are Gold (XAU/USD), Nasdaq (NASUSD), and the US 10-year T-Note Futures (TNOTEUSD), which have been trending for quite a while, and our positions there have remained largely unchanged.

The most bearish market is the Hang Seng (H33HKD), which is not surprisingly since China is planning to enact more stringent national security laws, which will likely negatively impact Hong Kong’s financial markets.

 

Major Events

This has been a very eventful year so far, with the virus outbreaks, quarantines, job market crashing, and now the slow re-opening of the economy.

Amidst all that, the amazing thing is that the stock market is recovering much faster than the economy.

And now, tensions between US and China are stepping up, with China’s latest actions on HK and corresponding US retaliation, adding to the accusations of China covering up the virus at the start of the outbreak.

And in the US, we are seeing riots and looting, after a white cop killed a black guy in broad daylight during arrest.

 

US Stock Markets

The US stock market, especially the NASDAQ, has been on steroids, thanks to the dominance of tech stocks.

In my private forum with my students, I shared a detailed analysis of the S&P 500.

 

Weekly Trade Highlights

Here are some highlights and case studies of trades done on forex, commodities and CFD products, also taken from our private forum.

Join our Last & Final Skillsfuture Workshop!

Last weekend, we conducted another full-house Skillsfuture workshop, with 40 pax of new traders & investors, as well as some of my past students who sat in to help out.

So far, every intake has been a full house, which is why we expanded to 3 workshops instead of 1 originally planned, because of the overflow. But our license expires on 18 June, so this is the last and final workshop which we can hold.

This fully subsidised Skillsfuture workshop will give you the skills and roadmap to build a second source of income to plan for early financial freedom, by building an all-weather portfolio that can perform well in any market conditions, and also market timing skills to create additional cashflow from short/medium-term trades.

Date: 13 & 14 June 2020 (6pm to 10pm)

Click here to check availability:
🔥 https://wp.me/P1riws-8OX

P.S. According to Skillsfuture regulations, the maximum intake is capped at 40 slots, so we will not be able to add new slots once all are filled up. Register early to avoid disappointment!

P.P.S. Your slot is only confirmed after you have completed payment, submitted your claims, and forwarded the confirmation screenshot to the organiser. If you did not complete the last step, your slot is still up for grabs to the next person who completes it.

💰 First-come, first-serve!
🍻 See you soon! 😄

If you have been keeping up with the news, you will know that oil futures (May) have hit negative territory for the first time in history, and that has spooked the stock market as well.

Going forward, will this be the catalyst that causes another leg down in the stock market, or will we see the lockdowns ending soon, and the economy returning to normal?

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Did You Catch This Epic Oil Crash?

If you are wondering why oil prices managed to go negative, the reason is quite simple:

Oil costs money to store.

Due to the economic collapse, oil isn’t being used much.

So all the storage facilities are filled up. So nobody who can store it will buy it from you.

If you want to get rid of oil, you have to pay someone.

When oil was trading at $20, we were already short with a target of $10.

To be honest, I did not really think it could go that low, and was prepared to take profits along the way.

But sometimes if you get the direction right, you might get lucky and enjoy a windfall profit.

 

It is worth noting that only the May contract dropped drastically, while the June and July contracts remained much higher.

This means that traders are expecting some economic recovery (and an increase in demand?) in the coming weeks or months.

 

Something interesting to note is the divergence between stocks and oil, shared by one of community members.

How Will This Affect the Stock Market?

Comparing across different asset classes, we can see that crude oil and the 10-year treasury are bearish, while the long-term treasury bonds and Gold are bullish.

The S&P 500 is somewhat sideways, and has not decided which way it would follow.

 

Most fund managers seem to think that the recovery will be U-shaped, meaning we can expected a prolonged sideways movement in the stock market while the real economy takes its time to recover.

The second most popular option is the W-shape recovery, meaning they expect another leg down to test the prior lows. This one has my vote as well.

And lastly only 15% think a V-shape recovery is likely.

 

Based on what I posted last week, there are 2 potential areas which I feel offer a high probability short trade, and if prices manage to clear the 3000 level, then I will rethink the W-shape hypothesis.

Updates Regarding the Covid Situation

 

Although the number of cases seem to have peaked in most major economies, and the US might want to relax its lockdown and resume the economy, there is a high risk of a second wave of infections, which might actually drive the second leg down of the stock market.

Also, the number of cases in developing countries seem unusually low, which is likely a case of not doing much tests. Hence there is a real risk that we might see an explosion of cases once the testing scales up.

Now that things have started to stabilise, many countries are starting to point fingers at China for their slow disclosure of the virus, thus allowing it to spread globally and wrecking havoc worldwide.

This could lead to more global tension and conflicts going forward.

As you can see, there are always many exciting trading opportunities in the markets, and I think that another big move is coming really soon, so now would be a really great time if you plan to start learning about trading & investing.

Start Your Trading Journey Today!

If you want to learn, you might as well learn from the best. 😄

Here is some feedback from our students:

“I am more confident to trade better with the setups I have learnt. I confident to meet my goals if I take action.” – Joseph Benjamin

“Really enjoyed the training by Spencer. He makes a complicated topic easy to understand and actionable.” – David Lee, Offset Pte Ltd

“Spencer has been a very good coach and is very equipped with skills that he can impart to us!” – Jun Hao

“Happy with the course as it gives a good intro and holistic approach. A unique TA approach to market. Also comes with many tools to help us kickstart the process.”

“The course is well-planned and thought-out. As an experienced trader, I feel it definitely helps me to have an edge over the markets in various ways.” – Shi Min

“A comprehensive and insightful course that is useful for those looking to understand technical analysis better.” – Daniel Tan

“Would recommend this course to others. I think, more focus on each type/setup will be good.” – Junnaidy

“Great resources and support to understand content. Spencer has condensed his market knowledge and experiences for new traders to understand and learn well.” – Minghan, MOE

If you are interested to start your journey with our community, click on the link below: https://synapsetrading.com/the-synapse-program/

See you on the inside! 🍻

For the past 2 months, the Covid-19 virus (Wuhan virus, Coronavirus) which originated in China was highly contagious, but it managed to remain mostly in China, hence the global community as a whole did not seem that worred about it, as seem by how the Us markets continued to run up.

However, it now seems that the virus is speaking to other countries quickly, with outbreaks in South Korea, Italy, and the Middle East (Iran), sparking fears that this might go out of hand and create a global pandemic.

Spread of the Covid-19 Virus

As we can see from the map, the virus has spread to most of the developed economies, thankfully sparing Africa and South America.

It would be disastrous if the virus did get there, as they are battling many other problems and other diseases (eg. Ebola).

The cases are still growing daily at an alarming rate, but at least it is no longer exponential.

The risk, however, is that clusters of outbreaks in various parts of the world might cause another exponential spike in cases.

 

Bearishness in Aussie Dollar (AUD)

Safe haven assets like Gold, Bitcoin and USD have been strong, while currencies like NZD, EUR and AUD have weakened the most.

 

Here are some of the recent analysis and trades of AUD/USD and AUD/CAD:

 

Gold as a Hedge Against Stock Declines

Gold is a good hedge against a crash in the stock market, because it is viewed as a safe haven asset, especially when the crash is happening.

Since the stock market is at all time highs, we have advised our students to add Gold to their investment portfolio.

Gold has since rallied strongly, and will likely continue to outperform.

 

If you would like to avoid missing out on any of such awesome trades (which we deliver on a daily basis), then you should definitely check out our training program & trading signals bundle:
https://synapsetrading.com/the-synapse-program/

See you on the inside!

Risks of Wuhan Coronavirus

As you can see from the world map below, the virus originated in Wuhan, China, and has slowly spread to other parts of the world.

To date, the number of infected cases has reached almost 10,000, surpassing the 8,000+ of SARS.

The WHO has also declared it a global emergency, which China quarantining cities of millions, and many countries restricting travel to and from China.

 

 

In my opinion, the scariest thing is how contagious this new virus is.

If you look at the chart below, you can the exponential increase in the outbreak, compared to the much slower spread of SARS.

In addition, there is a long incubation period of 2 to 14 days, where no symptoms might manifest, but victims remain contagious during that time.

That means that a handful of people have the potential to spread it to many, many others unknowingly.

 

 

Stock Market Opportunities

Looking at the data table below, the stock market tends to recover pretty quickly after any epidemics, and most of the time it gives a positive return within 3 months.

This means that the market tends to react overly negatively due to panic and fear, causing it to price in a much worse scenario than what usually happens in reality.

Hopefully, the virus does not escalate out of hand this time and become a black swan event.

 

 

Recent Trading Opportunities

Looking at our recent trade calls on our free Telegram channel, the AUD and NZD has shown much weakness, as well as commodities like Crude Oil (about 17% profit from shorting), whereas Bitcoin has performed well, gunning for the $10,000 level.

The thing about trading is that although you might spend time reading news or studying your charts or discussing trades ideas daily, the truth is you only need a handful of good trades every month to be very profitable. Quality, not quantity!

Stay tuned in our Telegram channel for the best trading opportunities!