Dec 31, 2018

The Bull Market - The Beginningof the End

In the last article, I covered the 3 indicators to watch out to signal an impeding global recession and a Bear market. In the month of Nov, one of the indicators, the US treasury yield curve, turned inverted for the first time in the last 10 years. Automated trading systems that are watching out for similar indicators triggered a sell trade on a wholesale basis leading to a 8% crash in the overvalued US stock market within a single week. Some of the analysts lay blame on Trump for shutting down the US government while trying to get the government pass a bill to build the Mexican wall, others blame the US Federal Reserve for rising the interest rate when the stock market is going through a soft patch. The tension between US and China in their arrest of the Hua Wei CFO and various Canadian citizens created doubt if the trade war can ever be resolved in the near term. On the other hand, there was an influx of good news such as a record year end shopping sales revenue, low employment and low inflation rate.
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