It just dawned on me that we are almost into the final Week of February and March kicks off on Friday - seems incredible that 2 Months of 2019 have almost disappeared already but I guess with Winter not exactly being my favourite season, I really shouldn’t lament its passing too much.
There are 28 Days in Feb this Year so as a result this is not a Leap Year although the wonderful Spring weather might be bringing the Tiggers out !! Of course this also means that we are merely 5 Weeks away from the Legislated ‘Leaving Day’ for Brexit and we are most likely in for some ‘interesting’ Weeks with this coming one probably likely to throw up plenty of Parliamentary drama and perhaps a few more rebel MPs joining the Tiggers. From what I understand, Theresa May is due to speak to the House on Tuesday and then there should be some Votes on Wednesday. I don’t expect T May to be bringing forward a ‘Meaningful Vote’ on her ‘Deal’ yet but it looks like the key element is getting the Attorney General, Geoffrey Cox, to agree to some sort of accompanying document to the Withdrawal Agreement which essentially says that the Northern Ireland Backstop is not something that lasts forever and that the UK can escape the EU at some point (not a ‘Hotel California‘ Brexit where you can check out but you can never leave….) The thinking seems to be that if Coxey makes such a statement to Parliament then that will give enough MPs the ‘political cover’ to enable them to support T May’s Deal without losing face.
Of course there are no guarantees that T May’s Deal will even get through with such an approach but the ‘Brady Amendment’ does suggest that if such legal assurance is given then most Brexiteers in the Tory Party will vote for the Deal and with a smattering of others it is probably enough to pass the Deal. Of course, once a Deal gets through Parliament we will then move onto the ‘Future Partnership’ bit and you can be sure there will be many scraps to come regarding whether or not we are in ‘a Customs Union’ as is the Labour Approach or if we can get more to a Free Trade Agreement which is what many ERG Brexiteers would prefer. However, I suspect there will be a big sigh of relief from most people in the UK if T May’s Deal gets through and some uncertainty gets removed.
On Wednesday it looks like the previous Amendment by Yvette Cooper and Nick Bowles about forcing T May to head off to Brussels again and beg for an Extension to the official Brexit Date is likely to come around for a vote again (although it needs to be appreciated that all EU27 need to agree to this and it would be no shock if one or two veto it). This time it is sponsored by Mrs Ed Balls and Oliver Letwin (I have no idea where Mr Bowles has gone) and it is quite possible that it could succeed if Corbyn and his Buddies back it this time. If that happens it will be yet another headache for T May and just prolongs the agony for everyone. I think there is also one by Labour MP Peter Kyle which is about saying that T May’s Deal can be backed but with the proviso that it then goes for a ‘People’s Vote’. So this would mean another Referendum with T May’s Deal or ‘Remain’ on the ticket - yet more delay and I am sure this would send Leave Voters utterly bonkers. It’s really difficult to figure out what any of these outcomes would mean for the Markets. My hunch is that removal of some Uncertainty around the potential for a messy ‘No Deal’ would support the Pound a lot and this could hit the FTSE100 - I am Short on the FTSE100 so this would suit me nicely and for all my fears around what can happen, I still think some sort of Deal is the most likely outcome or perhaps an Extension and the Pound would probably like that. On the subject of the Tiggers it is hard to figure out exactly what it means at this point in time. There are some glaring inconsistencies such as the fact they are all ‘People’s Vote’ enthusiasts but none believe in democracy enough to run By-Elections for their own Seats and of course the Economic differences between the ex-Tories and ex-Labour MPs are a bit of a problem. The only obvious impact that I can foresee at the moment is that they are likely to erode the Left Wing vote and mean that it gets easier for the Tories to win a General Election - in fact, the early and pretty useless Polls are already indicating this. Anything to keep Corbyn away from Downing Street is always welcome for me (and this should apply to anyone who has a Portfolio of Assets) !! ALPHA Investor Forum Event Tuesday 26th March in Oxford My mate David O’Hara from Blackthorn Focus is organising another Investor Event and he has again pulled together a cracking list of expert investors and companies that you can meet and hear from on the day. This conference is a bit smaller than some of the other events around, probably because at £159 it is a bit more expensive than the rest so they tend to attract a more ‘select’ group of Attendees. It takes place at New College, so if you want to attend an investor conference while feeling like you are in an episode of Inspector Morse, this could be just the ticket !! (you don’t need to drive there in a Jag). Speaking of tickets, I've agreed with David to make tickets available to WD readers for £125, that's a discount of nearly £25 to the usual price. It’s an impressive line-up which comprises of the following:
If you want to hear these Speakers in Oxford on 26th March and meet a collection of other top investors, then you can sign up here: https://www.blackthornfocus.com/events/alpha-investor-forum-201903/wheelie-dealer Please Note, I am getting no Commission or anything like that from this Event and I am merely bringing it to Reader’s attention. I think David does a very good job of arranging these Events and they are a valuable addition to the range of things that Private Investors can take advantage of if they want to. It is well worth supporting such initiatives because they are a useful way of getting unique access to Directors of many Small Businesses and you can learn a lot from the Investors that David gets to his Events, as well as from David himself. Forex Link I was sent this Link during the week about Forex Trading. It is not something anyone should undertake lightly and it is certainly not a good idea for Beginners, but you might find it an interesting read: http://w1.msspnt.net/prod/d6c407b4-89ef-4f78-baef-56cf8c08f1f2/db959fc7-ce37-48d5-b030-c9a515d1b39c Last Week My Portfolio really did very little last Week with a gain of 0.2% - so pretty much stayed flat. I was helped by a bit of a drop off in the FTSE100 which improved my Short Positions and on the whole my Stocks were pretty much OK but nothing particularly amazing happened. With all the uncertainty around I am quite happy to keep going along with this stance and only once there is more clarity will I be looking to reduce the Shorts and enable my Stocks to run free. It’s irritating that my Shorts have turned out to be bigger than I want, but at the time of putting them on it is very hard to know how they will perform in relation to my Long Stock Positions and I had thought I was Hedging a lot less than I actually am. What I find truly astonishing is how strong the US Indexes are - I will look at the Charts in a bit but it is remarkable how the US Indexes have rallied in a very strong straight line upwards and a ‘V’ shape and they are now not far off the All Time Highs. It doesn’t make much sense really and when you think about how overvalued many Tech Stocks look it would not surprise me if this Rally becomes a bit tired very soon. Getting above those previous All Time Highs could be quite a challenge but of course if they do ‘Breakout’ higher then that would suggests that Bulls are still rampant. Blog Slate In the Week just gone I published the final bit of those Macroeconomics Blogs and this means that my attention is now entirely on the Blogs I am trying to create which show in detail the mechanisms which take place when we place a Buy or Sell Trade and all that. I thought I had made a really good start and had produced something like 5 diagrams in MS Paint which were intended to show the Entities involved (You placing the Trade, your Stockbroker, the Market Makers and other Traders/Investors) along with the Information Flows etc. that go with it. However, after sticking the early diagrams into a Blog format and writing lots of words around them I realised that an essential element - the Order Book - was missing and that it didn’t really make any sense unless this was included in the diagrams. So that meant that last night I had to pretty much junk a load of the work I had done and re-do them with the Order Book and the Information Flows into and out of this being shown. It was a right pain in the bum but I am glad I have figured it out and like anything once I got stuck into the changes I managed to get it done quite smoothly. I might not be able to get these Blogs in a good enough state to issue one this Week but I do have a couple of other unrelated Blog Drafts in good shape which I can probably sling out instead. So there should be some sort of ‘Educational Blog’ later in the coming Week. I mentioned recently that I had produced a Review Blog of Ian Botham’s Autobiography but when I tried to upload it to the system a couple of nights ago, I had a problem with the ‘Non-Finance Books’ page and my suspicion is that all the Links to Amazon that are on that page are making my poor 11 year old ASUS Netbook strain like crazy and it simply doesn’t have the Memory and Processing Power to handle it so everything freezes up. It is a major nuisance and I am steadily coming to the realisation that I must change the old banger and splash out on a ‘modern’ Laptop with some oooomph behind it. Not only would this mean I can update the Books pages, it would probably also mean that I could upload all my Blogs a lot faster and simple things like opening my Email Account would be pretty much instantaneous whereas at the moment it can take quite a while. The thought of spending Money is annoying enough but what really holds me back is the whole hassle of the experience. It means I will need to get a new Big Screen with Blueteeth or something and a new Mouse and above all it will involve learning a new Operating System and sorting out things like my Email Account and Kaspersky Internet stuff and all that. It really puts me off as I just see a pile of grief heading my way but it is getting to the point where I simply can’t put it off anymore and the efficiency benefits for me are real and worth having. Perhaps in the next few Weeks I can get into Currys again and get something sorted. Ugh. You may recall that some time ago I mentioned that I was working on another ‘Special Project’ in addition to the TPI Podcasts - well, I don’t have a precise date yet but keep your eyes peeled because something might appear in the not too distant future….. One from the Old Days…… Back in Medieval times many Blogs about Investing were written and this two-parter was one of them (it was found inside a Tomb with one of the Kings under the floor in Canterbury Cathedral): http://wheeliedealer.weebly.com/educational-blogs/where-are-you-on-the-trader-investor-spectrum-part-1-of-2 http://wheeliedealer.weebly.com/educational-blogs/where-are-you-on-the-trader-investor-spectrum-part-2-of-2 Right, the clock is ticking so let’s check out some Charts…… S&P500 As always the Charts I show are taken from SharePad and if you click on the images then they should grow larger so you can see a tad more detail. First off ‘the Big Picture’ which shows the S&P500 going back to the 2009 Lows. Remarkably the Blue Support Line (marked by my Blue Arrow) is still intact and where my Black Arrow is you can see we are not far off the All Time High. Please ignore the Green Lines and stuff. The most important thing here is the Blue Line - as long as that holds then the Bull Market should be able to continue.
That first Chart was actually using the Weekly Candles and on the next one I have zoomed in and now my Red Arrow is pointing to a White Up Candle from last Week - this looks Bullish. Note the All Time High up around 2950 which is a really important Resistance Level.
I have a relatively small Short on the S&P500 so I could do without all this Bullishness !!
Sorry this next one is a bit messy but it is my ‘working’ Chart. The Black Ellipse shows a small Up Candle from Friday and the Black Horizontal Line marked by my Black Arrow at about 2817 is a key Line of Resistance now - if it gets above this, then a move on the All Time Highs is likely.
My Blue Arrow is pointing to the Darker Blue Wavy Line which is the 50 Day Moving Average and note how it has flattened out and is starting to turn up - albeit slowly. My Red Arrow is marking the Lighter Blue Line 200 Day MA and back in December 2018 there was a Bearish ‘Death Cross’ between the two MAs. We now need the 50 Day MA to cross through the 200 Day MA to get a Bullish ‘Golden Cross’ - if it fails to do this, that would be a bearish sign.
In the bottom window on the Screen below I have lifted up the MACD Indicator which is visible on the bottom of the Chart I just showed, and now my Arrows are pointing to where we could be nearing a Bearish MACD Cross on both the ‘Signal Lines’ and ‘Histogram Bars’ formats.
In the bottom window on the next Screen we have the RSI (Relative Strength Index) for the S&P500 Daily. A reading of RSI 64 is quite high although not extreme but it could easily turn down from here.
On the next one please ignore most of the stuff on here but focus on the Red Arrow which shows where we had a Bullish Cross between the 13 and 21 Day EMA Lines (Exponential Moving Average) and this is still ‘in force’. For things to get much more bearish, we need the opposite kind of Crossover (similar to what we had where my Black Arrow is in the top Left Hand Corner).
Lastly for the S&P500 we have the Daily Candles with the Bollinger Bands above and below as marked by the Pink shaded bit. My Black Arrow is pointing to where we are not quite at the Upper Band.
Both the DOW and the Nasdaq Composite are pretty much similar to the S&P500 and they are all marching in step.
FTSE100
Again this is quite a busy screen so please focus on the bits I am pointing out. First off my Green Arrow is showing the Candle from Friday (these are the Dailies obviously) and note that it has an ‘Inverted Hammer’ shape although in this context that doesn’t mean a huge amount. The key is that on Friday it was unable to hold the Highs and that suggests weakness although of course on a Friday we get a lot of silly and unreliable moves. The more important bit is where my Blue Arrow is up at about 7262 and this is the near term Resistance that needs to be got over if the FTSE100 is to properly go higher. I have a sizeable Short Position on this one (opened down the bottom where my Blue Horizontal Lines are) and obviously I would prefer it to drop !! It is quite possible that it is moving in the Range marked by where my Black Arrows are - between about 6850 and 7250 - the move up to 7262 could be an Overshoot. We will probably find out soon. Note the Darker Blue Wavy Line which is the 50 Day MA is turning up and that suggests more gains although it is not that reliable. Note also that the move up which culminated at 7262 turned down underneath the Lighter Blue Wavy Line which is the 200 Day MA - it obviously needs to get over the 200 Day MA for Bulls to be really ecstatic.
In the bottom window on the Screen below we have the MACD for the FTSE100 Daily. My Black Arrows are pointing to the different formats which suggest a ‘Bearish MACD Cross’ is on the way. On the Daily I don’t find this hugely reliable for Signals though.
In the bottom window on the next Screen we have the RSI for the FTSE100 Daily. It is currently on a Reading of RSI 62 which is not all that high but note where my Ellipse is that there was a bit of a ‘Double Top’ at about RSI 66 - just like on a normal Price Chart, a Double Top can be Bearish on the RSI.
In the main window on the Screen below we have the Daily Heiken Ashi Candlesticks. My Blue Arrow is pointing to where the Candles are Black and in Bearish mode but note they are not big and they need to be big Black Candles to get really Bearish. At the moment it is perhaps more like a sideways Consolidation type of move.
On the next Screen we have the Weekly Candles. My Ellipse is trying to enclose the Candles from both Last Week and the Week before and in this combination that looks Bearish to me (a ‘Dark Cloud Cover’ sort of pattern).
This last one for the FTSE100 has the Daily Candles with the Bollinger Bands. My Black Arrow is showing that we are half way between the Bands and have turned down off the Top Band so it could head to the Lower Band.
Pets at Home PETS
Despite all the worries around the Retail Sector and all that, PETS managed to squeeze out (like a badly trained Puppy) a well received Trading Update a few Weeks ago and since then it has seemed a lot more perky. Anyway, the Chart below has a very clear Downtrend Resistance Line and for Bulls to get really enthused we need it to move above that Blue Line where my Blue Arrow is. So a move above 160p would be a welcome sign. I hold PETS.
Glencore GLEN
This is another one that I hold. On my Chart below note the Green Resistance Line and where my Black Ellipse is we seem to have escaped that Green Line (marked by the Green Arrow). This suggests some strength is coming back although I guess Markets in general have been good for 2019 so far.
Entertainment One ETO
This is one of my biggest Positions (it might actually be the biggest) and looks like it is in a strong Uptrend at the moment. The Blue Lines are my best attempt at drawing some sort of Uptrend Channel which has been running since the start of 2016 and the Black Ellipse is up at the All Time High at around 450p. If it can get above that ATH it would be a really Bullish Sign. Right, I need to end it there. Good Luck for the coming battles with the Markets !! Regards, WD.
1 Comment
Jean Black
3/1/2019 02:53:14 am
Hi WD thank you for that, as usual very informative especially the bit on Pets and Ego. Keep up the good work.
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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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