New high coming

February 19th, 2021
1 minute read

Quieter
  • The stock-market has been quieter recently. Trading volume which surged at the end of 2020 has come down, market gains have slowed too.
  • Maybe it’s because of strong gains before. Maybe it’s because investors are waiting for the (slow) full year results.
  • Whatever the reason, we don’t think the lull will last... We are on our way to new highs.

Corona
  • One of the short term indicators that we have been using to help predict the market movement, is the Corona recovery rate.
  • This is a simple calculation of the Indonesian daily new Corona virus cases divided by the recoveries.
  • This recovery rate thankfully surged from 72% in early September last year & reached a peak of 85.9% by early November.
JCI
  • In September while the Corona recovery rate was rising, the stock market was at first distracted by the second Jakarta lockdown.
  • This meant the JCI didn’t immediately follow the recovery higher.
  • But then, starting from just below 5,000 in early October, it did finally start to catch up, even as the recovery rate fell back in December & January.

Pull back
  • Then when cases hit a peak on January16th, with the recovery rate back down to 81%....
  • ... the stock market got a bit worried & we had a correction back to 5,862 by the end of January
  • But since then, daily cases have fallen -50% & the recovery rate is back to 84.5%...& the JCI is back to almost 6,300...

6,500
  • Daily Corona cases are falling again at the end of this week & so the recovery rate will head to a new high & above 90%.
  • This means the JCI also going to a new high not only above 6,500, but after that a new all time high!
  • The quiet is almost over, stocks are going to get noisy again.