2018 Year In Review

31/12/18 (2018 Year in review)

It has been 8 months since we started Thebearprowl as an alternative view blog to warn readers when global markets were trading at excessive optimism back then, and were already showing signs of upside exhaustion and lower highs.

We had issued downside calls for targeted bank stocks that were trading at highs in the Singapore market as a way of warning to readers against the optimism as STI traded at highs of the year while Asia have just started navigating the China - USA trade war.

Similar downside calls were made to STI , HSI and SSE for a 3-6 months time frame, by which now we can say have been successful downside calls as all 3 Asia indices have since traded lower by 15-20%.

Downside calls for DJI / Nasdaq100 & S&P500 were validated only in December 2018 as all 3 indices made all time highs in October 2018 to only see the major downside move erasing all gains for the year in December. This year, we a change to the global risk on / risk off theme which the markets were used to from (2005-2017) to something of a targeted specific market risk on / off theme, as Asia and Emerging markets suffered, while the US indices continue trending higher.

A good reminder to everyone that the markets dynamics can change at will even if it has been the norm of the markets for years.

We remain bearish global market indices in 2019 and expects further 30% downside targets from end of 2018 levels, with US corporate debt crisis, EU debt Crisis and continued deleveraging in Asia / EM sectors to take hold.

We were bit too early on our call to go bullish Gold in June 2018, as we saw the market dipped 10% before breaking out of the lows only in December. We remain negative the US dollar as we look at the possibility of two 25bps rate cut by the Fed in 2019 should our predicted US equity crash scenario take shape in Q1 2019 followed by a US corporate debt crisis scenario. We like to express this view by being bearish USD/JPY and expects it to trade the 90-95 range within 2 years.

We have stood firm to our view that the US-China trade war would not have an resolution even as the hopeful headlines have caused rallies in the markets back in August. We have been correct to view all bounces as an opportunity to sell, as the half-life of such positive trade war headlines induced bounces have decreased considerably.

We remain firm that 2018 is only the first year for the Trade War, which is expected to last on for at least another 5 years, as the US targets to weaken China via various economic means. A weaker China economically means a weaker Chinese Military as the US seeks to hold on to their World No.1 Power status.

We have introduced a new segment for Equity Long-Short strategies in November 2018. Three long-short trade recommendations have been made this year for global equities which were met with positive results just 1 month from inception, current up 25% beating expectations and outperforming the broader market by 31%.

We are proud to be no.1 winner in the SGX Bull Charge challenge organised by Investing Note & SGX which started from August to October. Our bearish thesis and various trading strategies have worked well for HSI and STI during that period.

Our team have also done well in the recent SGX/UOB/SOCGEN organised DLC Challenge which ended in December, taking home various weekly cash prizes and ranked high on the scoreboard.

We head into 2019 with expectations of higher volatility not only in financial markets, but also in global politics and expects heightened response from central banks when react to market conditions.

If you are short, stay humble and sit tight. If you are long, we like using bounces as opportunities to move into cash.

Please do your own due diligence for trade recommendations from us or other sources.

We take this opportunity to wish all readers a great 2019 ahead.

Happy New Year!

The team at Thebearprowl