Far East Capital Newsletter
Wicked correction offers up opportunities
12 Feb 2018

In This Issue


Weekly Commentary

Wicked correction offers up opportunities

Doing the charts for the first time in over a week, I was surprised how strong many of them were in the face of the selling. The overall sentiment was weaker, but in most cases the longer term trends held their ground. As of today, the charts are telling this has been a correction in response to the previously very strong market.

Corrections like these always hurt, but with the passage of time they invariably prove to be great buying points for the brave. There has been nothing to change the fundamental outlook, particularly with respect to battery input stocks. There has been no bad economic news, though the exuberance that was surfacing in the market has been hit with a bucket of cold water. The super bulls and the nervous players have both been taught a lesson, and the rational investor can now make less pressured decisions.

The commentators in the market did a reasonable job of calming the nerves of those with whom they communicated, so the fear didn't accelerate. As one US-based technical analyst summed it up, this was a "wicked correction". As such, it was not the beginning of the end, but the volatility will remain with us. Being absent from the office, and in Cape Town, the emotional anxiety of these falls was somewhat muted to me. I was more concerned with the meetings with various companies at the conferences.
 

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