First off many thanks for all the kind comments I had back when I had to shout at the Twitter World about the grief the Technology Refresh I have undertaken in recent days has inflicted upon me. I guess a complete change of Laptop and Keyboard and big Monitor always had the potential for pain and deciding to grab a new 7 inch Tablet whilst I was in Currys was the final nail !!
I won’t dwell on it too much as I have vented big time on the Tweets but a really silly little niggle is that to an extent I can ‘touch type’ but I still need to look down occasionally for keys and functions which don’t get used all that often. Anyway, I had to replace the Keyboard because my old one had loads of keys which I had worn out and you start to forget what Letter or Number they actually type !! Throw in the fact that the ‘e’ key kept sticking so you would type ‘eeeee’ etc. and it really was time it had to go. Luckily things like Keyboards are shockingly cheap so I was happy to grab one but the challenge I am getting now is that the ‘Shift’ key is a little further to the left than on my old one – so when trying to do a Capital Letter etc. I find that you get one of these ‘\’ – I need to stretch the little finger on my left mitt a lot more !!
I am sure the new Tech will pay off in coming weeks once I have got the hang of everything but the pain in the last few days has been immense (in fact, whilst typing that sentence my Document moved to the left on my screen of its own volition and some nonsense appeared in the RHS about a ‘Smart Laptop’ – I have no idea what it was on about so of course I just closed the Window down !!). I can be sure that the Tablet will be a big improvement on my old banger though because it had got to the stage where the screen was almost unreadable and the darned thing was very difficult to recharge unless you had the angle of the plug thing exactly right…….
I don’t know how long tonight’s Blog will be – I am mindful that I might face some delays in typing it as I am struggling with modern Microsoft Word a bit and one of the reasons for replacing my dodgy old Netbook was because I was hoping the upload to the WD Website will be a lot quicker. Anyway, I had a dummy run last Night updating the ‘Little Black Book’ and that threw in a couple of wobblies (like totally losing everything I had typed at one point !!) so I need to leave myself time to get it all done. Last Week Funny old Week for me with my Portfolio gaining 0.9% but a bit of this was down to a very surprising Takeover Bid for EU Supply EUSP which caused it to jump up 40% on Friday afternoon. I say “surprising” but in many ways it wasn’t (I mean in the sense that things were just chugging along as normal on Friday afternoon and then out of the blue this Bid appears just after Lunch) – it certainly cheered me up until I thought a bit harder about it and realized that in essence a Stock with a lot of upside potential was being taken off my hands a lot earlier than perhaps would have been ideal. However, it is what it is and there is simply no point me stressing about it – it is utterly beyond my control and of course I can console myself with the knowledge that it shows I am picking decent Stocks and a gain of 25% on my Buy Price is acceptable in the time concerned and of course on Friday afternoon I was a lot wealthier than I was on Friday morning !! My usual approach with Takeovers is to give them a few Weeks to see if any other Bids come out (I doubt they will in this case but I will give it some grace anyway) and then I sell in the Market. This is good in several ways – firstly it means you get the benefit of the jump up in Price even if the Bid falls through and doesn’t happen (in which case the Price pretty much always collapses); secondly it frees up the Cash to splash on another Stock or some other use for Cash; and finally it avoids what can be a long drawn out and frustrating process of waiting for the Cash to come through if you accept the Offer. I did this with Dmatek DTK a few Years ago and it was horrendous because I had to fill out loads of stupid Israeli Tax Forms and stuff – it was a right pain. However, in the case of EUSP it has a really wide Spread between the Buy and Sell Price normally so I might just wait for the Cash to come through and get the full 18.25p a Share. I am not desperate for the Cash. The other grating thing about this Bid is that I only had 1% of my Portfolio in EUSP – in Quid Note terms it has been a lovely boost to my Funds but in % terms it was quite soggy. I only put 1% in because I saw EUSP as very High Risk mainly because it was a Market Cap of only around £9m (I am pretty sure that is the smallest Stock I have ever bought) when I bought it and my plan was to slowly add to the Position over time if EUSP grew as I thought it might. Sadly I will not now get to see that happen or get a chance to be more involved but I still think my Decision on Position sizing was right and of course if the opposite Outcome had happened and let’s say EUSP went bust, then I would be extremely pleased I only had a small Position. We must always remember to think about Risk and Reward and the trade-offs and to scale our Investments appropriately. Other than that, I think MPAC had a pretty good Week and my Short Positions would have done OK which has helped a lot. I will get onto this in a bit but it looks to me like the Markets could bounce early in the coming Week but I am not sure how high they will go and they might drop back before too long – this is a very iffy time of the Year. Markets and Strategy As I just mentioned I suspect we will get a bounce in the next few Days but I have no idea how far it can go. “Sell in May…….” is a powerful force and all the Trump / China Tariff issues give plenty of ‘Reasons’ to sell and of course in the UK we have the total Political Chaos that is going on. The Media narrative is that Stocks are selling off because of Trump and all that but of course as I have been writing in recent Weeks, the Markets were very toppy and almost euphoric after a strong start to 2019 and Valuations are stellar yet again especially on US Tech Stocks so a fall should be no surprise to anyone. The Media always have to have a reason…….. I have no idea how the Trump / China thing will play out and I’m not paying much attention to it. I tend to notice Global Economic data more and I keep picking up that there are signs of improvement after the sogginess we had recently but it is not all that convincing yet. Europe is particularly weak and although the UK actually surprised quite a bit on the last GDP Numbers (up 0.5% for the Quarter against 0.2% expected) it is unclear how much of this was down to Brexit pre-stocking caused by worries about a ‘No Deal’ Exit and just how buoyant the UK Economy really is. Anecdotal stuff like lack of Houses being sold and bought suggests that things are pretty weak and clearly Cars and discretionary items are not selling all that well but things like new Emissions rules and the turn against Diesels is not helping (having said that Results from CAMB the other day weren’t too shabby). The Brexit mess continues and our next treat is the EU Parliamentary Elections in about 10 Days which are shaping up to be a huge win for Nigel Farage and his ‘Brexit Party’ and the Remain parties are just fighting amongst themselves and failing to present a unified front and this is clearly poor strategically. I think I might have heard that the Tiggers have changed their name again so maybe that is what they mean by being “the party of change”. The victims of the boost for Nigel Farage will be the Tory Party who are in such a sorry state. It is likely that they Poll horrifically in the EU Vote and this will put more pressure on Theresa May if she has not gone already. It is astonishing how someone just so useless can be allowed to continue as the Leader of our Country and it is a sad indictment of the Tory Party that the Cabinet, Backbench MPs and the Activists etc. are allowing this farce to continue. Their utter incompetence and duplicity is just handing the keys to Number 10 to Corbyn and his merry bunch of Commie Loons. All this Political hokey-cokey could easily result in a new Tory Leader (we can pray !!) and it is highly likely that a General Election would follow probably just around the Autumn – so that the new Leader could do the presidential bit at the Tory Conference which tends to be in November I think. Of course this would time nicely with the time of year when we tend to get big Market falls so it would all coincide. And removal of Theresa May is not the only way to a General Election (I am assuming that any new Leader would ‘go to the Country’ in an attempt to get a bigger Majority – if the chosen one is credible then perhaps it makes sense but who knows how the land will lie by then?) because the drip, drip, drip of defections from the Tory Party etc. and many more likely, the Majority that the Tories have now must be very shrunken – in such a parlous state it would not take much for a ‘No Confidence’ Vote called by Jezza Corbyn to succeed and lead to a General Election. Anyway, with the time of the year and with plenty of potential events to worry the Markets, I see no great need to do much and I am happy to pretty much stick to my current Strategy. I would like to get the Hedges reduced but I am biding my time and no doubt I will keep writing about this and Tweeting and stuff. With EUSP and KCOM both undergoing Takeovers I should have some Cash coming in soon and my constant flow of Dividends in both the Income Portfolio and my ‘normal’ ISA is helping to build up the pile – lovely. On the subject of KCOM there are no signs of another Bid and it looks like it is all going through – on that basis I will Sell my Positions in the Market soon but I won’t be rushing to do this. I am starting to casually look for a Stock to replace KCOM in the Income Portfolio but I see no great panic to rush – with Markets very moody it is quite possible that we get more Falls and that would be a better time to Buy. OK, I will miss out on a few Dividends but I can probably gain more by Buying at a lower Price and I would rather take my time and chose wisely with regards to what goes in the Portfolio. For the WD40 I am in a situation where I can buy with EUSP going out and I am casually sniffing around some Stocks – again I am in no rush and would rather buy well than jump into something without proper thought and then regret it later. Mello Chiswick From Wednesday to Friday this coming Week the Mello Event in Chiswick is happening and it promises to be extremely high quality in every sense. From the vibe I am picking up it looks like the turnout will be very high so I hope to meet up with loads of People I know and hopefully many Readers who I have not bumped into before. If you are at the Event and you see an old bald geezer in a Wheelchair then that might well be me – come and say “Hi”, I only bite if I have just been setting up a new Laptop !! As it stands the plan is that I will be there on Friday afternoon and there is a strong chance that Peter Higgins (@Conkers3} and myself will do ‘TPI Live’ later on and this is intended to be like the Podcasts we do but in a room and ‘interactive’. Come along and join in and hopefully it should be a bit entertaining and we have loads to bleat on about. If you are utterly confused with regards to what I am going on about then you can hear the last TPI Podcast we recorded here: https://soundcloud.com/user-479955511/wheeliedealer-conkers3-talk-about-a-stock-that-is-up-7444-ytd-returns-ai-tep-jd-more We deliberately make sure the Podcasts have a large educational element and not much of them has a ‘Use by’ date so you can dig back through the Archive and hopefully you can get value and a perverse enjoyment out of them !! Gaydon Motor Museum and the WheelieBash2019 I should be out and about again in early July on the 12th when I plan to be at the National Heritage Motor Museum in Gaydon which is just below Birmingham and dead easy to get to and then on 7th September we have the WheelieBash which is shaping up to be a cracker with loads of people already on ‘The List’ – if you go to the ‘Events’ page you can see more details on these and everyone is welcome whatever your experience etc. so come along and join the fun and take the opportunity to meet some superb Investors and Traders. Judging by the Duxford Event we did last year the Museum one will probably just be a small group so if you want to discuss things in depth with myself and some of the other Investors and Traders with us then that is the ideal format for you. Blog Slate I was doing something daft like cutting the grass outside the front of my house earlier and I was thinking about what I had done for the Website this week and surprisingly despite wasting loads of time on the Tech changes, I actually got a fair bit done. I was very frustrated last night because I burnt a lot of time and failed to achieve working on a Blog Draft that I wanted to do but at least I did get around to updating the ‘Little Black Book’ which sits on WD2 and is a list of Stock Ideas that need more research. I did this partly as a dummy run so that I had tested uploading stuff to the Website so that I was ready for this ‘Weekend Charts Blog’ but in practice it did not go to plan and I had typed out the whole lot and the ‘system’ somehow managed to lose everything and I had to type it all again. I am not sure why this happened and I need to be extra careful. Thankfully when doing Blogs and stuff I tend to write it all in a Word Document first so I have the text backed-up. Sadly last night when updating the LBB I did it directly into the Website Edit thing so I had no backup. Ugh. Early in the Week I updated the ‘Weekly Performance’ page for the month of April and I also updated the texty stuff underneath the numbers. That is probably worth reading as it talks a lot about Strategy and some other stuff. On Thursday I issued the second and final Part on the ‘Trading Bases’ Blogs and that has been very popular. If you have not read it and you pooh-pooh Technical Analysis, then it might be worth having a look with an open mind and thinking about how you can adopt some of the principles into whatever approach you have. Despite failing to get anywhere on a Blog Draft last night, I have several things half-written or better and I have more ideas for Blogs than time available – so there should be something appearing of an Educational nature later this Week. Raking up the Past…… Because I intend to talk about Noise in ‘TPI Live’ on Friday, it makes sense to wheel these old Blogs out – this is Part 3 but there are links to the earlier bits at the bottom: http://wheeliedealer.weebly.com/educational-blogs/enjoy-the-silence-cut-out-the-noise-part-3-of-3 That has turned out to be a lot more typing than I had expected. I will now do some Charts but I need to watch the clock !! S&P500 As always the Charts I show are ScreenGrabs from the superb SharePad software/website thing I subscribe to and if you click on them they should get bigger so you can see more detail. I had a very close call because I used to press ‘Fn’ and ‘Prt Scr’ to do Screen Captures on my old Netbook and after trying a similar procedure a couple of times on my new Laptop with dismal failure, I figured out that I don’t need to press ‘Fn’ and there is just the one Button to worry about now. That is progress I guess……. The chart below has the Daily Candlesticks for the S&P500 and the standout thing here is the Hammer Candle from Friday where my Black Arrow is where we had a huge Reversal during the day and I suspect the Markets will try to rally off of this. Support is at 2825 which was the Low on Friday and note how on Thursday we had a Hammer as well but that one didn’t quite take – if we are going to rally, then the S&P500 must Open higher on Monday and build on this Hammer. Note how the Price Candles fell below the Blue Uptrend Line which is marked by my Blue Arrow – this was a good sign of the Falls to come. My Red Arrow is pointing at the Darker Blue Wavy Line and this is the 50 Day Moving Average Line – this seems to be Support at the moment. Down below where my Green Arrow is we have the 200 Day MA Line – this is more Support down at about 2775. To the upside we are near the Highs from the recent run up at about 2954 and the Red Ellipse in the Top Left Hand Corner is a Zone of Resistance. I suspect any Bounce now will be capped by such challenges, especially with this being a weak time of year and all the political and economic woes. Note also that the Hammer on Friday found Support on the Black Horizontal line which was Resistance back in October to December 2018 – that is nice from a Technical Analysis ‘textbook’ view (‘Previous Resistance becomes Support’)
In the bottom window on the Screen that is next up we have the RSI (Relative Strength Index) – on a reading of RSI 46 it is not all that low but it could rally from here.
On the next Screen please ignore all the text and lines and stuff and just focus on my Arrows. My Blue Arrow is pointing to where we are very near a Bearish Crossover on the 13 and 21 Day Exponential Moving Averages. If you look back at my Black Arrow this is where we last had one and it predicted huge falls so you can see why I am pointing this out. We can avoid it by a Rally now which looks likely but any weakness and we are in trouble. My Red Arrow shows the opposite, Bullish Cross.
Next we have the Weekly Candles. My Black Arrow is pointing to the Candle we got last Week and it’s a bit mixed really. The main thing is the Reversal where it recovered off the Low at 2825 but usually a move Down is ended by this sort of Reversal Candle but in this case we have barely fallen. Note how the Candle from the Week before was a sort of Hammer but at the top of a move up (I think this might be a ‘Hanging Man’ in the correct terminology) and this was clearly a Turning Point but we have not really fallen much. My hunch is we rally a bit but then drop again.
Other US Indexes like the DOW and the Nasdaq Composite are similar to the S&P500.
FTSE100
The Chart below has the Daily Candles and my Red Arrow is pointing to the Candle we got on Friday which found Support at 7189 and note how that lines up with the Light Blue Wavy Line which is the 200 Day MA. I am not sure how to interpret this – the fact that the Price Closed down near the Low of the Day is not good but with the US Markets reversing well, that might help the FTSE100 early next week. My Green Arrow shows the recent High at 7529 and obviously if the FTSE100 is to make proper progress towards the All Time High during 2019, then this Level needs to be broken through.
In the bottom window below we have the RSI for the FTSE100 Daily. On a reading of RSI 39 it is getting low but not extreme – it could bounce from here though.
Next we have the infamous 13 and 21 Day EMA Lines. My Blue Arrow shows a Bearish Cross and this is very worrying. We need some proper bullishness now if we are to reverse this negative signal. Note the Red Arrow which is where this happened back in 2018………
Finally we have the Weekly Candles for the FTSE100. My Blue Arrow is pointing to a pretty ugly Big Down Candle (how can you be both pretty and ugly? I guess it’s a bit like Barbara Streisand…….) and this doesn’t look good. We need a Reversal Candle this Week or a Reversal Pattern like a Bullish Harami to improve things here. Note how the Doji Candles pointed at by my Red Arrow were the Turning Point (if you are really bored you can look back through my Blogs and see what I said at the time !!).
OK, I need to go because I have to upload this stuff – and that’s after doing a thorough Proof-read – I need to get my skates on. Good Luck for the coming Week and see you at Mello…….. Cheers, WD.
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Stocks & Markets WheelieBlogsThese tend to be more Markets and Stocks related and timely - the Blog Page on the Main WheelieDealer Website has the 'Educational' stuff (well that's the theory anyway !!). Archives
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