Another Selling Opportunity 又是一个卖出机会

"The People's Bank Of China (PBOC) made a $57 billion liquidity injection in China. Additionally, reports suggest the PBOC may soon announce a cut in the loan prime rate and the required reserve ratio and that Beijing is likely to push an economic stimulus plan to offset the adverse economic effects of the coronavirus. " ---Briefing.com These actions stabilises the Chinese stock market. The Shanghai Composite rose 1.34% on Februay 4th. The Chinese stock market reopened on the 3rd from Lunar New Year break . The Shanghai Composite traded the down nearly 8% even after PBOC injected $22 billion liquidity on the 3rd. However, the whole world cheers on the 2nd day of liquid injection: Major US stock indices have recovered their Friday's 2% drops after yesterday and today's strong actions. The European and Asian stocks also rising sharply. Another reason for the market rally is that some people believe that the Wuhan coronavirus will eventually be contained.  What further supports the US stock market is that:  "President Trump's approval rating is the highest it's ever been, coming in at 49% in a new Gallup poll, which also found that 63% of Americans approve of the way Trump is handling the economy. Trump's ratings for handling foreign affairs and foreign trade also topped out at 47% and 50% respectively, his best numbers to date." ---ZeroHedge.com. People believe that Trump's reelection will help the economy and the stock market.

However, the bullishness is irrational and therefore not likely to be sustainable since the Wuhan coronavirus spread is still out of control. Many experts believe that the Wuhan coronavirus is basically a pandemic now. The latest confirmed infection cases are now 23892 and 492 deaths. The virus has spread to 25 countries globally. Virus infection are increasing rapidly in  other densely polulated provinces inside China such as ZheJiang (829), GuangDong(813), HeNan( 675), Hunan (593)...these figures have more doubled from 5 day's ago figures. Outside China, 6 new cases were confirmed in Thailand overnight (now total 25 cases), along with 6 new cases in Singapore (4 human-to- human), (now total 24),  a first case in Belgium and the revelation about 105 suspected cases in Philippines, up 25 since Monday.

When China is in a lock down mode , its economy is paralyzed and the economy of the world will be negatively impacted since China is the driving engine of the world economy. The  stock market rally due to injection of liquidity in the last couple of days is not going to last because it is not going to stop the virus from spreading.  It is a mistake to think that every thing will return to normal soon. US stock market rallied to all time high in January (and the Nasdaq  Composite just made new high even today) based on earning projections before the Wuhan's black swan hit, these projections are likely to be revised down soon. Besides, the overheat stock market which has reflected perfect scenarios need to correct any way with or without the Wuhan coronavirus pandemic.  Now that the Nasdaq just made all time high today and the Dow and S&P 500 are only down 2% and 1.2% respectively from all time high, there has not much of a correction and the risk is still high. It sure looks like this is another opportunity to sell stocks and expect a normal 10% correction from all time high. The S&P 500 need to drop to its 200 day moving at 3015 level for a near 10% correction.

“中国人民银行（PBOC）在中国注入了570亿美元的流动资金。此外，有报道称，中国人民银行可能会很快宣布降低贷款最优惠利率和所需存款准备金率，北京很可能会推动一项经济刺激计划。以抵消冠状病毒的不利经济影响。“ ---Briefing.com。这些行动稳定了中国股市。上证综合指数在2月4日上涨1.34％。中国股市从农历新年假期在2月3日重新开放。尽管在中国人民银行当天注入220亿美元流资金后，上证综合指数仍下跌近8％。然而，注资的第二天，全世界都欢呼雀跃：继昨天和今天的强劲表现之后，美国主要股指已经恢复了周五的2％跌幅。欧洲和亚洲股市也大幅上涨。市场反弹的另一个原因是，有人认为武汉冠状病毒最终将被遏制。另外一个支持美国股市的因素是：“特朗普总统的支持率达到有史以来最高，在新的盖洛普民意调查中达到49％，该调查还发现63％的美国人赞成特朗普处理经济的方式。特朗普在处理外交事务和对外贸易方面的评分也分别达到最高，达到47％和50％，是他迄今为止最好的支持率。” ---ZeroHedge.com。人们认为，特朗普连任将有助于经济和股市。

但是，由于武汉冠状病毒的传播仍处于失控状态，看涨股市是非理性的。因此股市能维持上升的可能性不大。许多专家认为，武汉冠状病毒现基本上已经成为一种大流行疫情。全球最新确诊的感染病例已增至23892人和492人死亡。该病毒已传播到全球25个国家。在浙江省（829宗），广东省（813宗），河南省（675宗），湖南省（593宗）等中国其他人口稠密的省份，病毒感染正在迅速增加。这些数字比5天前的数字增加了一倍。在中国境外，泰国在一夜之间确诊了6例新病例（现总计25例），在新加坡确诊了6例新病例（人传人4例），现在总数为24例，比利时发现首例，约有105例菲律宾的疑似病例（自周一以来增加了25例）。

当中国处于封锁情况，其经济将瘫痪，世界经济将受到负面影响，因为中国是世界经济的推动引擎。最近几天由于资金注入而导致的股市反弹不会持续，因为这不会阻止病毒传播。认为一切都会很快恢复正常是错误的。根据武汉黑天鹅事件之前的盈利预测，美国股市在一月份升至历史最高点（纳斯达克综合指数甚至在今天也创出新高），这些预测很可能会被下调以反映疫情的影响。此外，反映出完美情景的过热股市在有或没有武汉冠状病毒大流行的情况下都需要下跌整理。现在，纳斯达克指数今天创出历史新高，而道琼斯指数和标准普尔500指数分别较历史高点只下跌了2％和1.2％，因此修正幅度不大，市场风险仍然很高。看来现在是另一个抛售股票的机会，期望股市从历史最高点下跌调整正常的10％是不过份的。标普500要跌至200天移动平均线3015水平附近才是接近10％的修正。