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Early warning! After the rebound, is it brewing a bigger crash?

May 15, 2019 21:25
source: Golden ten data

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Summary
[Alert! After the rebound, is it brewing a bigger crash? 】 Market worries have eased on Tuesday, global stock markets ushered in a short-term breathing opportunity, US stocks are particularly gratifying. But a careful analysis can be found that this may be just a "dead cat jump" rebound.

Market anxiety has eased on Tuesday,Global stock marketWe are welcoming a short-term respite, and the US stock market is particularly gratifying. But a careful analysis can be found that this may be just a "dead cat jump" rebound.

In the past, risk aversion has dominated the global asset market trend and capital flow, and as the most popular safe-haven asset, gold has continued to rise from the downturn. But the situation seems to have reversed a bit on Tuesday, which has forced investors to re-examine the market.

As shown in the chart below, the European stock market responded enthusiastically on Tuesday, and both the Italian and French stock markets rose sharply, regaining the lost ground on Monday.

But to say that the most outstanding performance in this wave of rebounds, but also the US stock market. Despite a heavy setback on Monday, US stocks recovered on Tuesday and gradually rose to a “constructive” rebounderally point. The analysis believes that this is largely due to the latest USimport and exportThe data did not raise inflation concerns, and domestic investment sentiment also warmed up.

Specifically, the three major US stock indexes performed differently on Tuesday, and the Dow’s performance was the most prominent, with a sharp rebound of 300 points, the S&P 500 index andNasdaqThe index performed slightly worse.

As can be seen from the chart below, all major US stock indexes have returned to key technical support levels. The four major US technology stocks (FANG) have led the market. The stocks that were widely bearish have also risen sharply on Tuesday, at least before smoothing. Half of the decline on a trading day.

Similarly, the US dollar index also strengthened on Tuesday, giving the stock market more support. However, under the circumstance, gold, the safe-haven asset that faced double-strikes between the US dollar and US stocks, stopped its gains and fell back below $1,300 per ounce.

Seeing that US stocks are showing their vitality in a sorrow, investors naturally have more ideas. However, some analysts pointed out that a one-day rebound in the stock market that is in a downward trend for some time may not mean that the overall market trend will change. Investors should be more vigilant that this sudden rebound may be just a return to the "dead cat jump."

I believe that all investors know that the so-called "dead cat jump" refers to the market's anti-dumping after the plunge, but this does not have a solid foundation and strong positive news to form a support, the rebound will not last and can not change the overall investment environment. Conversely, a back pumping often means that a subsequent collapse may be induced.

A detailed interpretation of the decline in global stock markets and the rebound of yesterday in the past period may be a glimpse of the clues. As shown in the chart below, in the recent chaotic market environment, the trend of bonds and stocks is almost completely synchronized. This means that the goal of investors seeking stable returns has not changed.

At the same time, although the yield of US Treasury bonds has increased slightly, the reverse of the key US bond yields still exists. Economists believe that this is a strong proof of the country's economic downturn risk, which is clearly unfavorable to the US stock market and the US dollar.

On the other hand, Bitcoin has risen 13.4% in the past 24 hours, and the two-breaking 8,000-dollar mark has returned to its peak. Industry insiders pointed out that the recent surge in Bitcoin has also benefited from the high risk aversion in the market, such as Bitcoin, which integrates risk-averse assets and risk assets.currencyIt has become the new darling of investors, which naturally proves that investors' demand for safe havens is strong.

In addition, the leaders of the US stock market are not as ideal as they thought. Market news pointed out that the US technology giants are almost facing huge losses, and when the giants "the emperor's new clothes" are debunked, it is very likely to hit the market's confidence in other high valuation companies, thus dragging down the stock market.

The Wall Street Journal said that the biggest support for the US stock market today is to turn to the dovish of the Fed, but as global investment sentiment turns to pessimism and the economy is in a downturn, it is probably too weak for the Fed to try to hold the market.

In summary, regardless of the fundamental economic situation or the associated market comparison, the rebound of US stocks on Tuesday does not mean that it is about to get rid of the downturn, but it is more like a dying "dead cat jump." Investors who want to take advantage of the opportunity to enter the market may have to assess the market situation more comprehensively and make it clear.

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(Article source: Golden Ten data)

                (Editor: DF134)

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