I had a bit of a result on Friday when a mate who lives in Ascot invited me to join him and his missus and a couple of mutual friends on a trip to the Horseracing gig at the Racecourse. It was particularly sweet because there is this special ‘Resident’s Enclosure’ which people who live in Ascot can use and it is free for them to attend and also for their Guests. On top of that it is sort of in the ‘infield’ bit opposite the main Grandstand so we managed to get right next to the rails and it was quite fun as the Horses thundered past.
They also have plenty of Bookmakers in the Enclosure and of course they did stacks of trade with the locals of Ascot desperate to chuck their money away. Fortunately for me I have never been a Gambler and I would certainly not place money on a nag just because it had a nice name or whatever. Of course lots of people see Stocks as gambling but I just don’t buy that idea because when you buy a Stock you have weighted the odds in your favour by doing lots of research and analysis and of course you have a Portfolio which helps to manage the Risks. It is funny how there is a sort of ‘Urban Myth’ that the Stockmarket is for gamblers when that is clearly not the reality – unless you are punting on binary-bet type AIM Trash.
I have to say though that we had very good weather and this made a huge difference – if the weather had been grotty then I doubt it would have been much fun. Horseracing is really quite a strange ‘sport’ because there seems to be huge periods of waiting for a Race to get underway and then that doesn’t last all that long and we only got to see the Horses for a few seconds. I guess it is really a social event and the Horses are a sort of sideshow that draws people there and of course it is really for the gambling. It reminded me of the Henley Regatta a lot, where you had various boat races but long periods of not much happening. In truth I prefer Sports which are continuous with plenty of action !!
It is of course very important and useful to take a break from ‘work’ and I can’t say I missed the Stockmarket at all on Friday and I didn’t even bother looking at my Fone to see what my Stocks were doing (in the evening it was rather nice to see that my Portfolio had actually done ok, although it only reduced the hit I took on the week). It is most definitely a good thing to pull ourselves away from the Markets on a regular basis and I am sure it means we are more effective when we are actually present at our desks. Another big factor for me is that I did not retire from real employment so that I could then spend all my time ‘working’ on Stocks – it is a big thing for me to do stuff I enjoy and not be too tied to my Portfolio. Life is simply far too short. Donald Johnson There is plenty of silliness going on in the World at the moment with the UK highly likely to have Boris as Prime Minister in a few weeks (I think we will hear on the 23rd July who has won) although his little domestic squabble probably hasn’t helped his chances but he has time to recover as the Media Caravan moves on to the next scandal. It is of course possible that Jeremy Hunt will be chosen as PM but to an extent it probably doesn’t change a lot because both of them seem to be saying that they would leave the EU on ‘No Deal’ terms if that is the only option facing the Country on 31st October and of course there is no guarantee the EU would allow an Extension yet again. It was notable on The Andrew Marr Show earlier today that Caroline Flint (a Labour MP with a Leave constituency) was saying she would not vote to revoke Article 50 and I suspect there are around 22 or more similarly-minded Labour MPs. There is a narrative that “Parliament will stop No Deal” but there doesn’t seem to be much substance for this and in fact an attempt to ‘take No Deal off the Table’ failed just a few weeks ago. The Institute for Government said in a recent report that if a Prime Minister and the Cabinet wanted to take the UK out on No Deal terms then there was nothing Parliament could do to stop them. Things could certainly get very interesting around the Autumn. And of course we then have Trumpy just pulling back from launching an attack on Iran and clearly the heat is being turned up big time in the Middle East. Trump says they will do more Sanctions on Iran starting tomorrow (I find this a bit surprising because I am amazed there is anything left to impose Sanctions on !!) and there was also a claim that the US had done a Cyber-attack on Iran to disable many of their Missile Systems. Anyway, there is huge potential to keep Oil Prices moving up and I guess Gold could remain popular. It is a bit paradoxical that Gold in general has been doing better of late at the same time that Stocks have been moving up but that is the nature of the beast really and I find it rarely does what the ‘experts’ say it should. If Oil stays buoyant that could help the FTSE100 which has heavy weightings to the big Oil Stocks like RDSB and BP. But also some of the big diversified Mining Groups have Oil exposure. On the flipside, if the Iran thing calms down, then Oil could drop back. It is of course also possible that if things really heat up in a nasty way, then Stockmarkets might fall as the mood turns more ‘Risk-off’. Last Week My Portfolio continues to suffer as the Major Indexes do well yet my Stocks fail to really keep pace. My Portfolio ended up down 0.5% last week which wasn’t a disaster but it is frustrating. I am being hurt by the Shorts I have on the FTSE100 and the S&P500 and these have turned out in practice to be much bigger than I had hoped their impact would be. My intention when placing the Hedges was to remove perhaps 40% of the Downside Risk so that if Markets rallied then I would still do ok but if Markets fell then my hit would be significantly reduced. As it has turned out my Portfolio does well when Markets are falling like back in May but when they rally I struggle. Anyway, as I have hinted at above, it is highly likely that the Autumn is going to be quite unpleasant and of course if there is a miracle and Brexit gets resolved in a smooth manner, then the Pound will rally and this may hurt the FTSE100. It is annoying that my Hedges are having to run longer than I intended but I will be looking to add slightly more to the Shorts if the conditions look right as we get towards the Autumn and this should make it easier to get out of them. June has turned out to be not too bad so far and we have one more week to go. Typically June has been the Second Worst Month so this is unusual and there are no guarantees that July will be as good as it normally is (a typical July is the 4th Best Month but after a better than usual June we might not get the normal ‘bounce back’ effect) but it is likely things will be quite choppy and we may get many of those sort of dull and turgid Summer months where not much really happens – we have had a few days like this recently. So my Strategy stays the same, I am not buying much and if anything my bias is towards Selling and I am letting my Hedges run until I can take them off with as little damage as possible. 7 Circles Meet Up Events My friend Mike who runs the 7 Circles website (you can find him on Twitter as @7Circles) organises Events for Private Investors which take place in London and have minimal fees to attend (£5). There are 2 coming up as per the links below: These both take place on Tuesday 16th July in London: https://www.meetup.com/London-Passive-Investing-Meetup/events/262487177/ https://www.meetup.com/Big-Picture-Investors-London/events/262487244/ Gaydon Museum Meet-up You can find out details about this one on the ‘Events’ page and the crux of it is that I will be at the National Heritage Motor Museum at Gaydon just off one or other motorway (it’s a bit below Birmingham I think) on Friday 12th July. Again everyone is invited and you just need to pay the entry fee to the Museum but it is well worth going and we should have a good laugh. Come and join us. I am not too worried about knowing who is coming because it is a huge venue and a public place anyway. Generally these kinds of Meet-ups tend to be smaller with perhaps around a dozen people or so which means that if you are new to investing or anything then they can be a superb opportunity to meet up with the highly experienced and successful Investors who I know are coming along. It is well worth taking advantage of. WheelieBash 2019 You can find out more details about this on the ‘Events’ page which is on WD2 (there is a Button at the top of the main Homepage on the main Website and you are actually reading this Blog on WD2 even if you hadn’t realized so if you go to the top of the Page you should find the Menu to get you to the ‘Events’ page) and it is taking place on Saturday 7th September and I can confirm that it will be held at the same venue as last year - the White Hart in Winkfield which is just outside Windsor. There is a link on the Events page to the Pub and everyone is invited but please contact me somehow if you are coming because I need to keep track of the numbers - we are allowed 60 People and it is pretty likely we will get that I think - the List is filling up fast with 20+ confirmed attendees already and a lot of people at Mello said they are interested and will let me know (and that was not prompted by me) Blog Slate A bit of a departure for me the other day when I published a very personal blog about the rather dramatic trip I had to A&E recently thinking I was suffering from a pretty serious problem which then turned out to be me worrying about nothing and I am 100% fine. It did however just go to show how easily our Brain can take various inputs of information and jumble them all up together to come to entirely the wrong conclusion – and however much we are aware of this and try our hardest to avoid its damaging effects, it is not all that easy in reality. This is a major impediment to us doing better with our Stocks. Last night I made really good progress with the Second Part of the HOTC Blogs so I am confident that it should get released towards the end of this coming Week. Once that one is done I have a few other ideas so I am sure I will find something to write about. It might even be another Stock one – stranger things have been known !!! I also updated the ‘Little Black Book’ last night which sits on WD2 and has Stock Ideas that I have tripped over recently and might be worth looking into more deeply. I also updated the ‘Weekly Performance’ page for May earlier in the week I think and I can’t believe I nearly need to do the same for June !! From the Blog Archives…… Sticking with the Horses theme, a while back Steve Holdsworth did a Guest Blog on Gambling, you can revisit it here: http://wheeliedealer.weebly.com/educational-blogs/guest-blog-from-sholdsworth1963-on-gambling And sticking with the Gambling, this one might be worth a revisit – especially if you are new to The Great Game and finding things tough: http://wheeliedealer.weebly.com/educational-blogs/winning-the-lottery Right, let’s see what the Indexes are doing. S&P500 As ever the Charts I show are ScreenShots taken from the superb SharePad software that I subscribe to and if you click on them they should get larger so you can see more detail. First off I want to highlight something which has taken place in recent Months and which might be a hint that we are near the top of a Range. On my Chart below which has the Daily Candlesticks for the S&P500, my Red Ellipse is pointing to the All Time High (ATH) which was made back in October 2018 and this hit 2941. Then at the start of May 2019 we hit a new ATH at 2954 which is where my Black Ellipse is. Now just last week on Friday we hit another new ATH at 2964 and the Candlestick looks very much like a Bearish ‘Shooting Star’ which suggests we might be on for a pullback, at least in the short-term. The fact that new ATHs are being made is a good thing although it needs to show some serious oomph and smash through the previous ATH if we are really going to get a strong Bullish move upwards. Judging by the Price Action on Friday it seems like the Bulls just about managed to get it over the line but then they ran out of strength and the Bears just took them down. My Green Arrow here is marking a Bullish Cross between the 13 and 21 Day Exponential Moving Averages (EMAs) and this suggests gains to come until we see the opposite Bear Cross which is like we had where my Black Arrow is or where the Blue Arrow is.
On my next Chart, there are just 2 Lines that I want you to concentrate on. What I have done here is to zoom out a bit on the Chart I just showed and to look for any Trend Channels which might be forming up. Anyway, please ignore most of the stuff on this Chart but look at the 2 Red Lines which are pointed at by the huge Red Arrows. This could be a sort of almost Sideways Range that is playing out. If the Price of the S&P500 gets decisively above the upper Red Line then that would be very Bullish.
If this Range is ‘right’ then at some point we might see the S&P500 down near the Bottom Red Line which would be around 2700.
There is something interesting here. What I have done on this one is to really zoom in so we can see the Bearish ‘Shooting Star’ more clearly and I have pointed at this with my Red Arrow. Anyway, the interesting bit is that where my Blue Arrow is I am pointing to some pretty heavy Volume (the Green Bars) and this tells us it was a very busy Friday and perhaps it was the last hurrah of the Bulls before the Bears forced the Reversal intraday.
In the bottom window on the next Screen we have the RSI (Relative Strength Index) for the Daily S&P500. On a Reading of RSI 65 where my Black Arrow is this is quite a high level but not extreme. It could turn down from this level.
Next we have the Weekly Candles for the S&P500. My Black Arrow is pointing to a Big White Up Candle which looks bullish.
Next up it’s the Daily Candles with the Pink Zone marking the Upper and Lower Bollinger Bands. My Arrow is pointing out how we are right up at the top Band so a drop back from here would make sense. However, any Pullback doesn’t mean we are necessarily taking a big plunge down, it is quite possible that we ease back a bit before having another attempt at those All Time Highs.
Dow Jones Industrials Index
For time reasons I won’t show loads of Charts on the DOW but the one below has the Daily Candles and the Bollinger Bands and my Arrow is pointing at a Bearish Shooting Star like we have just seen on the S&P500 and it has clearly dropped down from the upper Band. The Nasdaq is doing similar things as well. I also spotted Shooting Stars on the CAC40 and the DAX but I won’t show these.
Brent Oil (Spot)
I noticed something on Brent Oil (Spot) which is worth being aware of. On the Chart below we have the Daily Candles but at this scale you can’t see them very clearly but what I want to show is how we are near a Bearish ‘Death Cross’ on the 50 Day Moving Average (the Darker Blue Wiggly Line) and the 200 Day MA (the Lighter Blue Wiggler). My Black Arrow is pointing to where this Crossover is looking like it will happen. These Crosses are not massively reliable but it is worth looking at that Red Resistance Line (marked by my Red Arrow) and if Brent Oil is going to do something more exciting for Bulls, then it must break through this Red Line.
FTSE100
First up I just want to point out a Resistance Line which is the Red Line with the Big Red Arrow below. The Candles here are Daily ones and the point is that Bulls must get the FTSE100 up through this Red Resistance Line if things are going to go higher. In addition we have the 13 and 21 Day EMA Lines and my Small Green Arrow is showing where we had a Bullish Crossover and that is still ‘in force’ at the moment.
On my next Chart I have zoomed in on the Daily Candles and my Black Ellipse is trying to point out the ‘Long Tails Doji’ from Friday and look at how the Candles from the 3 previous Days also butted up against that Black Line above (this was the Red Line on the previous Chart – I bet that has confused you !!!). If the FTSE100 is going to break through that important Resistance Line, then it needs to Close above 7469 which was the High from last Tuesday.
In the bottom window on the next Screen we have the RSI for the Daily FTSE100. On a Reading of RSI 60 where my Black Arrow is, this is not a particularly high reading and it often goes higher.
Next we have the Daily Heiken Ashi Candlesticks for the FTSE100. These are very different to ‘Normal’ Candles and on the Chart below my Red Arrow is pointing to where the HA Candles are still White but they have gone Narrow which is usually a precursor to them turning Black which is of course Bearish.
Now it’s the Weekly Candles for the FTSE100. My Blue Arrow is pointing to a fairly nice White Up Candle for last week but note how it has quite a long ‘wick’ which shows an inability to hold the High.
OK, I will leave it there. Good luck for the coming week and if we actually get to see some Sunshine among the Storms, then make sure you take time out and get a break. Cheers, WD.
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