2 months ago, China and Hong Kong stocks looked like they were making a recovery and I decided to resume purchase of China/HK stocks in June.
It was not a profitable experience for the next 3 weeks. The HK/China stock market did not seem to act right. Maybe something was wrong with me since the China stock indices were going up in June but my portfolio was not showing similar performance. My losses were telling me I was not in sync with the market. I decided to exit the trading positions to protect both my financial and mental capital. For long-term investments, one should give the portfolio more time before exit.
I was mostly out of HK/China stock markets by the first week of July. Thankfully, this protected me from further losses. China's CSI300 index declined 7.02% in July 2022. The Hang Seng index declined 7.79% in July 2022. There is nothing to gloat about my escape because I did not make money in the first place.
July 2022 has been a good month for global stock markets in general except for China/HK. This can be seen from the number of stock indices which cut above the 50-day moving average. In several markets, the percentage of individual stocks trading above the 50-day moving average has improved. The weakness of the USD in July is another sign that the mood is becoming more bullish.
I will be looking to buy some U.S stocks. Position size will be smaller than usual until there are further signs that this rally is not a bear market rally trap. All the key U.S stock indices are still trading below the 200day moving averages.
Meanwhile, the inverted yield curve in U.S and Singapore bond markets are suggesting an economic recession is coming or is already here. The inverted yield curve has been widely regarded by economists as being a good predictor of impending economic recession, although it has not been useful for predicting a bear market for U.S stocks in the past 40 years.
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