Should We Buy Stocks (STI) Now? Or Wait Another Few More Months? (Part 2)

From previous post.
Let’s look at STI chart below. The highest peak is Apr 2018 with STI >3.5K. Bottom out in Oct 2018. The sell-off is led by US-China Trade war.
Covid-19 Crisis
Now let’s look at this virus triggered crisis. 12 Jan 2020, STI is still >3.2K. In fact up to 12 Feb 2020, STI is still >3.2K. Therefore the Peak is Mid Jan 2020.  

Source: Yahoo finance
NOW, let’s look at EU debt crisis and Great Financial Crisis.
Debt Crisis
2015 Apr Peak (>3500). End of QE, Fall in oil price and finally Greek debt default in June 2015. China stock turbulence leading the plunge and in Aug when Yuan devalue. Sep plunge below 2800, Oct rise above 3000 short term confidence, oil price drops and so is stock market. Feb below 2600.  
Source: Yahoo finance

1) Free Fall –  Peak Apr to 1st Trough Sep. 2016 (5 months) – Freefall above 3.5K to  below 2.8K i.e. >20% drop
2) ST confidence or good news – Sep to Oct (0.5-1 month) – Rise  below 2.8K to above 3K i.e. >6% rise.
3) 2nd Free-fall – Oct to Feb (3-4 months). Fall from above 3K to below 2.6K i.e. >13% drop

Debt Crisis STI Chart Conclusion
1st peak to 1st trough 5 months period. (>20% drop)
Dead cat bounce last for 0.5-1 month. (>6% rise)
Further drop for 3-4 months before hit bottom. (>13% drop)
Peak to final bottom, 10 months period. (>25% drop)
Great Financial Crisis

Source: Yahoo finance
1) Free Fall –  Peak Oct 07 to 1st Trough Mar 2008 (5 months) – Freefall above 3.8K to  below 2.85K (>25% drop)
2) ST confidence buy. Mar to May 08 (1-2 month) – STI rise below 2.85K to  above 3.2K (>10% rise)
3) 2nd Free-fall – May to Oct 08 (4-5 months) – STI drop above 3.2K to approx 1.6K (>50% drop)
4) Bounce up – Oct to Nov 08 (1 month) – STI rise 1.6K to above 1.8K (>10% rise)
5) Bottom – Nov 08 to Mar 09 (4 months) – STI drop from 1.8K to  below 1.6K (>10% drop).
GFC STI Chart Conclusion
1st peak to 1st trough 5 months period. (>25% drop)
1st Dead cat bounce last for 1-2 month period. (>10% rise)
2nd peak to 2nd trough 4-5 months period. (>50% drop)
2nd Dead cat bounce last for 1 month period (>10% rise)
Further drop for 4 months before hit bottom. (>10% drop)
Peak to final bottom, 18 months period. (>55% drop)
If Covid-19 and Oil plunge will induce a Major stock market crisis over a period of time, then below conclusion from this analysis:
In a major crisis, market normally takes 10 to 18 months from Peak to Bottom. For the Covid-19 crisis, peak is at Jan 2020, hence we expect that Market will only bottom out end of the year to mid next year. Do not rush to buy all stocks now. Nibble and be patient. Or you can use my previous post’s buy chart as a guide. 
The first sell-off typically wipe out >20-25% of stock price taking 4-5 months.
This means that it is better to enter with a larger position progressively Apr-May-June 2020 period. And expect STI to be below 2500 points.
But do not finish firing all bullets in the Warchest. Market will then have temporary good news and/or short sellers covering their position, hence leading to a temporary rise of market (+/- 10%). This will be short term which only last for +/- 1 month. To be conservative >50% of cash for the 2nd wave of crash.
Then market will crash further depending on the severity of the crisis. In GFC, it further plunged in the next 4-5 months for more than 50% of stocks wiped off. STI ~ 1500 to 1600 points.
This means that the impending bigger crash is expected to take place during the 2nd half of the year!

Related Posts

6 thoughts on “Should We Buy Stocks (STI) Now? Or Wait Another Few More Months? (Part 2)

  1. Especially when the impacted earning reports come out subsequently, that's when gloom gets more gloom.

  2. Yes yes yes. You are right. Or normally analyst / bigger institutional already priced forward earnings into current price.

  3. The most common wired networks use cables connected at one end to an Ethernet port on the network router and at the other end to a computer or other device. You can find the tutorials to change its password on 192.168.l.l

  4. Hello everyone, Are you into trading or just wish to give it a try, please becareful on the platform you choose to invest on and the manager you choose to manage your account because that’s where failure starts from be wise. After reading so much comment i had to give trading tips a try, I have to come to the conclusion that binary options pays massively but the masses has refused to show us the right way to earn That’s why I have to give trading tips the accolades because they have been so helpful to traders . For a free masterclass strategy kindly contact ([email protected]) for a free masterclass strategy. He'll give you a free tutors on how you can earn and recover your losses in trading for free..

  5. Are you in need of Urgent Loan Here no collateral required all problem regarding Loan is solve between a short period of time with a low interest rate of 2% and duration more than 20 years what are you waiting for apply now and solve your problem or start a business with Loan paying of various bills You have come to the right place just
    contact us [email protected]
    whatspp Number +918929490461
    Mr Abdullah Ibrahim

  6. Natural herbs have cured so many illness that drugs and injection can’t cure. I've seen the great importance of natural herbs and the wonderful work they have done in people's lives. i read people's testimonies online on how they were cured of HERPES, HIV, diabetics etc by Dr Edes herbal medicine, so i decided to contact the doctor because i know nature has the power to heal anything. I was diagnosed with Herpes for the past 3 years but Dr Edes cured me with his herbs and i referred my aunt and her husband to him immediately because they were both suffering from Herpes but to God be the glory, they were cured too .I know is hard to believe but am a living testimony. There is no harm trying herbs, Thanks. Write him on WhatsApp on +2348151937428. @dr_edes_remedies deals with
    (1)Alzheimer virus
    (5)Genital warts
    (7)Virginal infection
    Email him on [email protected]

Leave a Reply

Your email address will not be published. Required fields are marked *