Revisiting the VIX

 28 November  2020

Dear Fellow Investor,

Revisiting the VIX

Weekly VIX (Volatility Index) signalling positive market action in the US markets and by proxy world markets

The VIX is a good measure of extremes in sentiment. The spike high in March  2020 signalled extreme bullishness and triggered a  10,000 point drop in the  Dow Jones.  World markets followed.  Presently we are slowly recovering. There is no indication of a potential collapse. In fact odds favour higher prices for most markets.

Weekly EWM, the Malaysian ETF representing KLSE blue chip shares. The EWH, EWJ and EWS, country funds for Hong Kong,  Japan and Singapore are showing similar bullish charts.

The KLSE is recovering with an upside bias as news flow regarding Covid vaccines is positive. In the Star headline today, Pfizer and BioN Tech  vaccines will be made available in early January free of charge to 6.4 million Malaysians  if proven safe for humans.  

Once the gloom of Covid is lifted expect market recovery to at least pre Covid levels. Couple this with low interest rates and massive money printing by all world central banks expect new equity highs .  Gold and bit coin corrected last week due to vaccine optimism but the fundamental reasons of wealth protection by holding gold and bit coin have not changed.    Governments will continue to expand their money supplies, increase social spending, and keep interest rates low or negative.  

Governments can not create gold or bit coin out of thin air unlike fiat paper money and credit. Continue to hold gold.

Keep safe,
Bill

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