Connect with us


Finance: Market pullback nothing to worry about



PHUKET: As of late March, US stocks appear to be cooling after strong gains since the US elections. Over the next 1-3 months, I expect further market consolidation with a pullback by major market indices to the 50-day moving averages level being a real possibility.

The Dow Jones could fall below 20,000, while for the S&P 500 index, a 3-5 per cent pullback to a support level at the 2,300 mark would still indicate a healthy market. What I don’t want to see is the S&P falling further than that, as then we may start to see other (more bearish) technical formations start to form on the technical charts. Over on the NASDAQ, tech stocks have been strong performers lately; but I would still not be surprised to see a pullback to the 5,500 level.

The iShares MSCI Thailand Capped ETF has an increasingly healthy chart with multiple bottoming or bullish formations being layered on top of each other. Thailand and its tourism industry has struggled for the last few years with the military takeover and now the passing of the King; but the THD chart shows signs that the country may have finally turned a corner with the ETF ready to break out.

In fact, if we project upwards the difference between the market bottom (around US$55) and recent levels (US$77), the THD could break out to the US$90 level. Keep in mind that such a breakout would only take us back up to 2013 highs before much of the country’s troubles began.

Some US market indices are performing worse than the key market ones. The SPDR KBW Regional Banking ETF had a big run up after the elections and profit takers are now pulling their profits. However, not all regional banks are performing poorly – some individual names are holding on to their gains.

The iShares US Broker-Dealers ETF, SPDR S&P Metals and Mining ETF and the SPDR S&P Biotech ETF have also seen some additional pullback or profit taking.

It’s no fun to go through a pullback; but as long as we don’t see key indices cratering back down to pre-US election levels, there is no need to be overly worried. Investors also need to remember that while a sector index may see pullback or profit taking, not every stock in the index experiences a decline.

Pullbacks or corrections should always be looked at as opportunities to see which stocks in a portfolio are holding up, as weak stocks that do not hold up should be sold while any winning stocks should remain in a portfolio or be reviewed for profit-taking opportunities.

Finally, investors need to keep in mind that corrections will create headlines (especially if the Dow falls below 20,000), but investors need to ignore sensational headlines and focus on price action and long-term trends.

Don Freeman, BSME, is president of Freeman Capital Management, a Registered Investment Adviser with the US Securities Exchange Commission (SEC), based in Phuket. He has over 15 years experience working with expatriates, specializing in portfolio management, US tax preparation, financial planning and UK pension transfers. Don can be reached at 089-970 5795 or email: freeman

— Don Freeman


Get more from The Thaiger

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Thailand31 mins ago

Thais unhappy with Prawit’s response to daycare centre massacre

Thailand1 hour ago

Thailand lowers flags to half-mast to mourn daycare centre massacre victims

Philippines1 hour ago

‘Strange and unusual’ punishment for Filipino lottery winners

Sponsored3 hours ago

5 reasons why Thailand educators shouldn’t miss Bett Asia in Bangkok this year

Guides1 hour ago

5 posh places for a relaxing afternoon tea in Bangkok

Weather1 hour ago

Floods in northeast Thailand have reportedly killed 3 people since last week

Crime2 hours ago

Colleagues reveal daycare killer prone to mood swings

Join the conversation on the Thaiger Talk forums today!
Hot News2 hours ago

US sanctions Myanmar junta-linked businessman over buying Russian-made arms

Thailand2 hours ago

King, Queen and PM Prayut to visit mass shooting victims in northeast Thailand

Guides2 hours ago

What are the common international school curriculums in Thailand? What should you choose?

Hot News2 hours ago

US forces take down three senior ISIS figures in Syria

Bangkok2 hours ago

LIV golfers trundle pointlessly into Bangkok’s ‘billionaire’s paradise’

Hot News2 hours ago

Suitcase in Japan held different kind of explosives as bomb squad finds sex toys

Crime3 hours ago

The world mourns mass shooting at northeast Thailand daycare centre

Hot News3 hours ago

World’s oldest dog Pebbles dies at age 22

Crime3 hours ago

Mass shooting in northeast Thailand: Death toll rises to 37

Thailand1 year ago

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14

Thailand2 years ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism2 years ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket2 years ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism2 years ago

Phuket Thai food treats you need to try | VIDEO

Thailand2 years ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism2 years ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand2 years ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand2 years ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand2 years ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand2 years ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand2 years ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand2 years ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand2 years ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand2 years ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11