My investing muse - strategy for week starting 28Feb2022 (27Feb2022)

This is a landmark week in our modern history.  Ukraine found herself caught in a battle as Russian troops poured into the country from several sides.

This single "black swan" event has commanded the attention of all countries and brought volatility to the global markets.  This has overshadowed the various good news which would have otherwise introduced positivity to the markets.  US CDC has eased their masking guidelines following a drop in the following:

1. drop in new Covid cases per 100,000 residents in the past 7 days
2. drop in new Covid related hospitalization
3. drop in hospitalization by Covid patients

There is also another landmark moment with the nomination of Ms Ketanji Brown Jackson (the first black woman) for Supreme Court.  On top of this, the Core personal-consumption-expenditures index (Fed's preferred inflation measurement) climbed 5.2% from a year ago to hit a new 38 years high for January 2022.

photo taken from news - congestion at US ports

There is some positivity as US spending rose briskly in January 2022.  It increased by a seasonally adjusted 2.1% in Jan 2022 from the previous month, snapping a revised 0.8% decline in December 2022 as reported by US Commerce Department.

The jam at Los Angeles/Long Beach (LA/LB) eased to a waiting list of 66 vessels from Jan 2022's peak of 109.  However, this is not good news as vessel arrivals will increase in the coming weeks.  Jan 2022 was the record month for Port of Los Angeles in their 115 years history where a total of 865,595 TEUs were moved.  On 17 Feb 2022, it was reported that there remained 64,000 empty containers to be 'removed'.  In mid-Feb 2022, the Marine Exchange for Southern California reported yesterday that a total of 74 containerships were heading to the twin ports with 69 slow steaming in the Pacific.  There is no rest for the weary as the congestion looks to persist.

With crude oil challenging the $100 per barrel price, this would continue to apply inflationary pressures to the global economies.  Unfortunately, the Russian/Ukraine situation has added more fuel to the ongoing inflation fire.  With more sanctions applied to Russia, the repercussion to the global economy looked to follow soon.

S&P 500 1 Day Chart from Yahoo Finance

From the S&P 500 chart above, there seems to be a reversal of the downtrend.  The divergence seen in both MACD and Stochastic seemed to suggest a reversal.  The market will hope for this to take place in the coming week.  However, there is a potential of a death cross being formed in the 1 Day chart above.  This happens when the 50 days moving average cuts the 200 days moving average from above - usually a bearish signal.  This may unfold over the next few days/weeks pending on the market.  As a technical indicator, this would lead to some downward price pressure.

Hopefully, we should see some market recovery in the coming days.  

There is always news that may spook the market but Dow Jones had one of the best Friday with a record jump.  Time in the market is more important than timing the market.  Let us avoid selling shares in panic - this would just give speed to the falling knife.  If the business has good fundamentals, demonstrated good growth, durable competitive advantages and price have a good margin of safety, let us consider adding these to our portfolio.

Personally, I am looking at $Alibaba(BABA)$ and $Tesla Motors(TSLA)$ to dollar cost average in the coming days.  Let us do our due diligence before we invest.