WEEK 38 15TH SEP 2019: WEEKLY ROUND UP, TYPES OF BONDS, GOLD, CHINA, DJI, & BOND YIELD

Disclaimer: All information shared is solely for learning purpose and it does not constitute to a buy/sell call.

 

I have learnt the word “Precession” many years back from a very valuable course (those whom know this word would know what course I am referring to).

Today, I am truly having distinction of it’s meaning. I have started Investwhizz sometime back with the intention of creating a platform for like minded Investors & traders. With sheer determination and focus on delivering value, I am happy to see this “baby” grow up day by day.

While the journey is not so easy (creating the web, subscribing to paid data/services to assist me in analytics, coding the platform, setting up structures etc); I am happy to see that I am constantly touching the lives of people around me and adding value to people whom I don’t even know.

Thank you for giving the likes in Facebook, the compliment in private messages & words of encouragement to keep me motivated to deliver value to you and the universe. These small little gesture really mean a lot to me.

Writing articles each week helped me to reinforce my trading strategy, allowing myself to keep my radar on at all times and to be up to date of what is happening around the world. In turn, I am happy to receive the rewards through the positive investment returns from Mr Market. It also helped me in having good conversations to share during networking events 😉

 

I would like to take this opportunity to share that Investwhizz would be launching our beta testing for Fundamental analysis sometime in early Oct 2019 and it would be free to use for users whom join our telegram group.
(Well, there are no free lunch; you would need to provide me the feedback on how we can improve further! – Those whom have truly added value would be granted free access when we go live).

Link to join Telegram group: http://t.me/Investwhizz

(Happy to see the group grow from ~70 to ~160 pax in few weeks!)

 

Quick round up of what happened last week:

  1. European Central Bank (ECB) had done a surprise move last week to launch the so called “QE Infinity“. What entails in this QE Infinity is the buying of 20 billion Euro of net assets each month to push up euro zone’s inflation for as long as it needs to reach “satisfactory levels”. We believe that this may lead to an effect of blowing a bigger bubble in the stock markets as well as reducing the possibility of any near term interest rate hikes in the euro-zone. The interest rate on deposit is now negative 0.5% (this is only applicable to banks).
  2. Similarly, we are hearing that Japan/FED may follow similar moves. If so, the era of cheap money and bubble would be here all over again. Please do your own due diligence on this!
  3. We have seen news on Saturday that Saudi’s Oil facility have been attacked and it may affects up to 5% of global production – would be expecting a larger gap up in Oil on Monday. If this leads to more conflict within the area, Gold/safe heaven assets would probably have similar immediate term bullish effects
  4. Do save your calendar on 19th Sep (next week) – FOMC would be announcing the interest rate decision on that day. Market current expectation is estimating for a rate cut to ~1.875% (any deviation would probably cause the market to have a wigsaw effect again).
  5. In the immediate term, we are seeing US treasury bond yield for 1,2,3,5 and 10 years going up to be closer to 1 and 3 months.

 

Different types of Bonds:

Few members in Investwhizz telegram group have asked on the types of bonds and below are few examples

1.) US Treasury bonds; – These bonds are considered to be risk-free bonds issued by US FED government and are the ones in which we have been sharing in the weekly bond yield chart.

2.) investment-grade corporate bonds (high quality); These are private bonds issued by companies with healthy financial status (S&P/Moody rating of BBB and above). Their yield are normally slightly higher than US Treasury as the risk of default is considered to be remote.

3.) high-yield corporate bonds (low quality), also known as junk bonds; – These are private bonds issued by companies with weaker financial status (S&P/Moody rating of below BBB). Their yield are normally much higher than high quality corporate bonds due to the higher probability of defaults
4.) foreign bonds; Bonds issued in other currencies than USD (i.e. China’s Panda bond etc)

Note: There are many other bonds in the market in which information are widely available in google.

 

Updates on Gold:

  1. As mentioned last week, we have seen gold initiated further pull back and have showed signs of support coming in.
  2. Referring to the chart below, there are 2 levels of support to look out for; 1485 and 1480 (+/- few pts for slippages). Those would be considered good risk to reward to enter.
  3. Should it break 1480 range, it may go down further before going up.
  4. Mid to long term bullishness of gold remain intact. Do keep a lookout on 19th Sep’s FED announcement.

 

 

 

Updates on China:

  1. We have seen a bullish break out in China; do monitor for back-testing for support before entering. Do message me in the telegram group for me to explain this further :). It would be easy to read if you notice how we plot the chart upfront and look at the big picture.
  2. As mentioned, we are bullish China from long term perspective (value investors should buy and sleep).

 

Updates on DJI:

  1. With the easing of tension of trade war, we can see DJI moving up very quickly to reach all time high soon
  2. Do keep a look out for next week’s Fed’s announcement as “it will rock DJI like it have never done before!” (mimicking the way Trump says things)
  3. We can see that VIX is going down drastically where market fear have eased off

 

 

Updates on Bond Yield:

  1. As mentioned above, we are seeing US treasury bond yield for 1,2,3,5 and 10 years going up to be closer to 1 and 3 months.
  2. Yield inversion may be back to normal if this carry on

 

Should you have any queries on the above posting, do feel free to post in the Telegram group as well. Please feel free to share to those whom you think may benefit as well.

 

Stay safe, stay alert and NEVER over trade in any circumstances. Lets learn and enjoy the journey together!

 

Regards,

Ernest Koh

InvestWhizz Founder

P.s. Do private message me in Telegram if you would like to know more about the trading platform I used.