New high coming
February 19th, 2021
1 minute read
1 minute read
- 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.
- 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.
- 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.
- 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...
- 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.