Foreign Investors Cover Short Positions, Taiwanese Stock Market Surges 450 Points in Night Trading, Experts Point Out Three Rebound Indicators

According to data from the Taiwan Futures Exchange, foreign investors today presented short position covering, and on the 17th, the Taiwanese stock market experienced a historic largest drop of 2953 points, but today they really did cover, with the net short position amount decreasing from 86,189 to 78,337, a reduction of 7,852. Regarding this, financial expert Yeu-Shiun Yeh posted on Facebook pointing out that today after the market closed, another signal worth noting appeared, in addition to foreign investors starting to significantly cover short positions, the Taiwanese stock market's night trading also surged 450 points. As for whether the Taiwanese stock market can touch the bottom and rebound, there are three key points worth continuing to observe. Yeu-Shiun Yeh pointed out that last Friday, the Taiwanese stock market set the largest single-day drop in history, plummeting nearly 3,000 points, the market was in a state of panic, margin calls, leverage washing, retail investor confidence had almost hit rock bottom. Many people started shouting that the bear market had come, and some believed this was just the beginning. But don't rush, don't panic, don't be afraid, today after the market closed, another signal worth noting appeared. In addition to foreign investors starting to significantly cover short positions, the Taiwanese stock market's night trading also surged 450 points, indicating that market sentiment is no longer as pessimistic as it was last Friday. Yeu-Shiun Yeh mentioned that according to the latest data released by the Taiwan Futures Exchange after the market closed today, the net short position of foreign investors in the Taiwan Index futures fell to 78,337, covering 7,852 short positions in one day, bringing the historical high short position of 86,189 back below 80,000. Many people might say, '78,000 is still a lot!' That's correct, 78,337 is still a relatively high level, and this does not represent that foreign investors have turned fully bullish. But what the market really needs to look at is not how many short positions are left, but whether the selling pressure has started to change. Because continuous increase in short positions represents rising market risk aversion; conversely, short positions starting to be covered represents decreasing risk aversion. Yeu-Shiun Yeh believes that there are three key points worth continuing to observe: First, whether the net short position of foreign investors in the Taiwan Index futures can continue to decline below 70,000. Second, whether foreign investors have started to shift from selling to buying in the cash market. Third, whether funding continues to decline, making the market's capital healthier. The real bottom will not be formed when everyone is optimistic. Rather, it is when the market is full of fear, the news is one-sidedly pessimistic, and everyone thinks it will continue to fall that professionals often start to quietly adjust their layout. Yeu-Shiun Yeh emphasized that therefore, this signal does not represent that the Taiwanese stock market has already V-shaped reversed, nor does it represent that the risk has been completely removed, after all, there will also be rebounds in a bear market. But at least it can be said that foreign investors have begun to show signs of pulling out, and the market's most panicked emotions are also slowly cooling down. Next, it depends on whether foreign investors cover short positions for one day or continue to cover. If it is just a short-term adjustment, then we still need to be alert to the possibility of turning bearish again, but if short positions continue to decline, coupled with covering in the cash market, for the Taiwanese stock market, it is a positive signal worth noting.