Taiwan stocks plunge 2,070 points in bloody start to the week! Middle East tensions rattle markets – how are your holdings? A quick guide to spotting rebound signals and essential tools

For anyone in Taiwan with skin in the game, this Monday has been pretty miserable. Opening the trading platform this morning, the numbers were simply hard to believe. The Taiwan stock market took a dive, gapping down over 2,000 points, smashing through the 32,000-point mark and hitting a low of 31,529. This kind of drop is enough to make anyone's heart race, let alone a seasoned trader like myself who's been in the market for two decades.

Oil price shock worse than a tiger! Who's behind this Black Monday?

At the end of the day, the root cause of today's market crash boils down to one thing: geopolitics. The escalating tensions in the Middle East have sent international oil prices soaring. This morning, both West Texas Intermediate and Brent crude futures spiked over 20%, breaching the $110 mark. This is a major problem. Markets were already fretting over US inflation and less-than-stellar jobs data. Now, with oil prices surging, inflationary pressures intensify, threatening to cool the economy further – the spectre of stagflation is looming large.

The gloomy sentiment from Wall Street on Friday has washed over to Asia. Japan and South Korea saw their markets battered in early trade, with losses of 7% or 8%. Taiwan's market was never going to escape this wave. It's clear to everyone that this isn't just a Taiwan issue; it's a full-blown crisis of confidence among international investors.

Even TSMC stumbles; which of these stocks are in your portfolio?

The heavyweight champion, TSMC (2330-TW), couldn't hold the line today, with its share price briefly dipping to 1,800, dragging the broader index down. The previously red-hot IC substrate trio – Unimicron, Kinsus, and Nan Ya PCB – were also completely flattened, hitting their daily downside limits.

Among them, one stock might be less familiar to some, but it's undoubtedly a source of pain for many investors: SIGURD Microelectronics Corporation (3265). The company also took a beating today, with its share price locked at the daily limit of NT$124.50. Looking at its fundamentals, the company seems reasonably solid. It recently reported EPS of NT$5.48 for last year and planned a dividend of NT$4.1 per share. But when panic sets in, the market turns a blind eye to fundamentals – it's a case of 'sell first, ask questions later'. This kind of irrational sell-off is the ultimate test of holding conviction.

What should you do now? Two key rebound signals according to institutions

With markets drenched in red, it's better to calmly assess the road ahead rather than panic-selling at the bottom. I've pulled together some of the more consensus views from the market for your reference:

• Signal one: Can support at the 200-day moving average (around 31,000 points) hold? Market veterans believe this correction is primarily due to an overheated market coupled with geopolitical jitters. The first support level to watch is near the 200-day moving average. If it holds, there's a chance for a short-term stabilisation and a breather.
• Signal two: When will margin lending be 'cleaned out'? This is another crucial point. There's a saying in the market: "As long as the bulls aren't dead, the downtrend isn't over." Margin debt is still relatively high. We'll likely need to see another wave of panic-driven liquidation to flush out weak hands and reduce margin balances by another NT$30 billion or so before a decent rebound can materialise.

Simply put, for now, it's a waiting game – waiting for prices to stabilise and waiting for margin calls to happen. Times like these call for preparation, not impulsive trading. Do your homework and get your tools ready.

Essential tools for survival! Must-have apps for your phone

In a highly volatile market like today's, relying on the naked eye is just not enough. Handy tools on your mobile devices become crucial. I've noticed several apps gaining traction in market discussions recently, and their features seem particularly useful in this kind of environment:

Real-time tracking, precision trading

For those who favour short-term or day trading, speed is everything. Apps like Stock Channel King - Version 1.6.3 - iOS, which emphasises channels and speed, or Taiwan Stock Day Trading Warrior - Version 1.29.3 - iOS, designed for ultra-short-term traders, can make a huge difference in volatile markets. Faster quotes and smoother order execution are critical. Additionally, if you want to track both US and Taiwan stocks, iWow Treasure Hunter - Real-time US/Taiwan Stock APP - Version 3.8.7 - iOS is a solid choice for getting a global view of fund flows.

Portfolio management: more important than chasing profits

While trading execution is important, portfolio management is absolutely fundamental. Many investors buy a bunch of stocks but have no clear idea of their overall profit, loss, or return rate. This is where ledger apps like Simple Taiwan Stock Ledger - Track Your Stock Profit/Loss Anytime - Version 1.1.1 - iOS prove incredibly useful. It helps you accurately calculate the profit or loss on each trade, including commissions and transaction tax, allowing you to not only understand entry and exit points but also get a clear picture of your true performance. After all, surviving in the market is more important than getting rich quick.

Is the National Stabilisation Fund on standby? The government's next move

With such a sharp decline, many are wondering whether the National Stabilisation Fund will step in. Based on current signals, the Fund is taking a cautious stance. They've indicated they will continue to monitor the situation, but haven't ruled out calling an emergency meeting to discuss measures if an irrational, disorderly sell-off occurs. The message is clear: "No plans to intervene just yet, but don't push it too far." So, in the short term, the market will likely have to find its own bottom.

Ultimately, while today's drop is painful, it also serves as a stress test. Use this opportunity to review the quality of your holdings, weed out the weak ones, and prepare the necessary tools. The market will always be there. As long as you preserve your capital, opportunities will return. Stay strong, everyone!