Instead of trying to identify the best Chinese Stocks, the astute player would do well to focus on America as the trend is positive on America, while its neutral on China. The trend could also turn negative on China with ease, so we would not waste time on trying to identify the best Chinese stocks; at least not yet.
The rhetoric is increasing at a very rapid pace, and calls for reparations to outright war are starting to make waves. At this stage of the game, it does not matter if the arguments poised against China are valid or not. The press is going to change the narrative, and when they are done, the crowd will be calling for blood.
While some Chinese stocks will go against the trend and hold their value well, we don’t think its worth looking for needles in a haystack where there are so many great stock plays in the US. China is showing no signs of remorse, which is going to bode poorly for them in the future. They assume they can buy their way out of this situation; it will fail on a grand scale.
This chart will normally scare individuals, but if one looks at it closely, one can spot that huge spikes in unemployment were followed with a rapid turnaround in the job market. However, on this occasion, the job market is not as important as it was before, because businesses have already started to embrace automation. More importantly, the Fed is flooding this market with more than it has ever done, since its inception. The stock market is concerned with profitability, and these companies will return to profitability a lot faster than the experts are forecasting.
Goldman Sachs still sees a case for a V-shaped recovery amid the novel coronavirus, making the argument that the 1981-1982 recession could be a model for “multi-million job gains” once the labor market rebounds.
Goldman wrote that the current shutdown of the labor market is similar to the Volcker recession in the sense that both were “man-made.”
“Responding to the 1970s stagflation, the Fed deliberately reduced economic activity for over a year in order to slow inflation and anchor inflation expectations, much like today’s economic policymakers are discouraging some economic activities in pursuit of a public health priority,” Goldman wrote. The analysts pointed out that the same types of industries affect. https://yhoo.it/2JQpv4d
In this instance, we concur with the analyst’s general assessment. This crisis was “man-made”, and so the main drivers of the economy will recover faster than projected.
We are 99% sure that a “mother of all buys” will be generated shortly; the anxiety index is still stuck deep in the zone of madness, and the next pullback could push it right to the very edge. The secondary indicators posted below are trading in the extreme ranges and bullish sentiment while surprisingly high given the chaos is still below its historical average. Neutral sentiment rose, but it’s well below its historical average. To trigger this buy, all we need is for neutral sentiment to test its recent lows or for our weekly indicators to move a tiny bit more. Market Update, April 7, 2020
If the Dow trades in the 19,800 to 20,800 ranges, it’s almost guaranteed to trigger the MOB (Mother of all buys) signal as the indicators on the weekly charts have moved deeper into the oversold ranges.
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