Yet Another Prediction of SG and US Market Sell-off Came True.

Those who have been following me long enough would know how accurate the system's prediction of market trend has been. A few weeks back when things were still nice and rosy, the system MATA module that tracks the proportion of uptrend stocks in the overall market, signaled a red flag that a stock market sell-off is nearing. During that time, the US stock market was still hitting new highs. Job market was good and US and China just signed the Phase 1 trade deal. The US economy was still fundamentally very strong. It did not look apparent that cracks were already forming.


Yes, stocks are overpriced, but it is not easy to determine exactly when everything will start to fall apart. As what John Maynard Keyne said, "The market can stay irrational longer than you can stay solvent". While the indexes continued to skyrocketing, the pressure was already slowly building up behind the veil. MATA detected this as the indicator went into the overheated region.  This is where the risk of a reversal is very high. It happened back in Jan 2018 as well with similar outcome which was correctly predicted by the system too. Of course not to forget the sell-off in October 2018 which was correctly predicted as well. You can check out the strategy page on how accurate MATA has been in predicting sell-offs.

I made a free post here in this blog and in other social medias. Of course my paid subscribers had a more detailed and timely information.

Well, true enough, a few weeks later, the market plummeted into correction territory in a span of only one week, due to the escalation of the COVID-19 outbreak.  I see the COVID-19 as just a reason for investors to take profit after all the frenzy buying. But when everybody thinks the same way, it became a sell-off.

As for Singapore market, the system also signalled in early February of impending danger. For SG case, the system went into 100% cash as the overall market trend weakened based on MATA analysis. Hence when the sell-off came, the portfolio was well protected. You can check out the post here.

As usual whenever I make a prediction, it will be met with sarcasm and disbelief, notably this comment.

If an indicator is free, do you think it will work well since probably a million other people could be looking at the same thing and acting the same way as you? That's why we have irrational exuberance and market crash in the first place.

As for now, MATA is indicating that both US and Singapore are in a market-wide downtrend. The market will continue to be weak in the near term as the COVID-19 outbreak began to spread to every nation, at the same time spreading fear to the population. The risk of further decline is high. Trade with care and stay safe.


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