Update on Markets: 12th Aug 21
ATEC has not posted much recently since there has been little value to add.
We are big fans of history though, and believe there is often much one can learn if we bother to just look closely. We make the following observations on APEX50 as follows:
The last time APEX50 rallied massively for over a year was back in 2017. It peaked in early 2018 (see the white circle in the image above). Of course, we know this was due to the US-China Trade War. Even if we did not follow the news closely, we can make the following points:
- That after a massive rally the year before, it took the region about a year to make a proper bottom to correct the excess optimism.
- That every bounce attempt by the index was resisted successfully by the 20-day and/or 50-day Moving Averages. In other words, so long as these Moving Averages continued to cap the index, we cannot anticipate any potential trend change. Hence, we can use these as signposts for the current period.
- The down-trend also coincided with very weak readings on the RSI and MACD indicators (unable to show strong readings, unlike during uptrend periods). Again, whenever this changes, then we can go ahead to change our view on the market.
The long and short of all these basically brings us back to the same conclusion with regards to the now: be patient and learn to do nothing until something changes.