Market Recovery Soon! Time to chase?

Market Update

The speaker said the previous day’s US market crash had spilled into Asia. Japan’s Nikkei 225 and South Korea’s Kospi were reported down more than 6%.

Singapore bank stocks were also weak. DBS and UOB were reported down more than 2%, while OCBC fell less sharply. The speaker attributed OCBC’s relative resilience to its good results, saying its profits had risen while those of the other two banks had fallen.

The speaker expected a possible rebound in the US market, partly because short sellers might buy back shares to cover their positions.

Rebound Risk and Suggested Approach

The speaker’s backtest found that after market drops of more than 6%, the market rebounded the next day more than 60% of the time. The backtest period and methodology were not specified.

The speaker cautioned that a sharp rebound does not necessarily mean the decline is over; markets may resume falling afterward. The suggested approach was to avoid chasing a rebound or trading emotionally. Crash buyers should step aside and act only when their predetermined levels are reached.

Assets and Instruments Mentioned

• Indexes: US stock market, Nikkei 225, Kospi
• Stocks: DBS, UOB, OCBC
• Other: Short positions

Disclosure

No explicit “not financial advice” disclaimer was included.

Presenter/source: Presenter not named; 1M65