As I have been promising for several weeks, I have been involved in a ‘Special Project’ which is a FREE eBook written by Michael @Vilage_Idoit and a couple of Days ago it went live and you can get a copy by clicking on the Book image just below and then completing the form and the eBook will be emailed to you.
If you find the Book doesn’t appear - then check your ‘Spam’ Folder because it might be there and if not then contact Michael and I am sure he will get it to you. If not, give me a shout and I will make sure you get it. The first time you click the Link the Book will appear as a Pop-up but on subsequent visits it might not appear but at the Top of Michael’s Homepage there is a little Orange Button you can click instead.
Michael has done a cracking job on this. I first found out about it maybe 3 Months ago or something when he told me he had started writing a Book and wanted me to review it and give my thoughts etc. Anyway, I didn’t really know what to expect and was pleasantly surprised to find that the Book was about 80% complete when I first saw it and Michael had really produced something very good. I spent a few Days reading through it and correcting Spelling and Grammar and trivia like that but in the main it was really in a very good state. There were odd bits where I suggested some more clarity was needed and from memory I helped Michael with a structure for the Conclusion and what ought to be in that bit. But I make no bones about it that Michael has done all the work here and my input was pretty easy and I learnt stuff from reading the Book !!
Anyway, I hope you find it useful and I would say that it is suitable for experienced Investors / Traders and has a lot for them including a strong chapter on Level2, and if you are new to the game, then reading this Book along with the excellent Naked Trader Books from Robbie Burns will get you off to a really strong start with your understanding. It is an easy read and astonishingly Michael only introduced it to the Twitter Community on Friday morning and very soon after people had already finished it !! (and it was very pleasing to see all the positive responses). Remember, just click on this image and you will be taken to Michael’s Website:
Last Week
Bit of a funny Week for me because I was nicely ahead at one point but then on Friday the Indexes had a good Intraday Recovery which meant my Short Hedges dragged which put me back to totally flat on the Week. I guess I can be happy though that a few of my Stocks put out decent News and I get a sense that once all this Brexit nonsense is sorted one way or another, my Stocks should be able to perform OK. I updated the ‘Weekly Performance’ Page for February and if you have a look at that I put in a load of comments as usual about the Markets and what my Strategy is etc. - so nip over there and read that and it will save me from writing too much here apart from to say that my Strategy remains the same of not doing much and being Hedged to a large extent by Shorts on the FTSE100 and a smaller Short on the S&P500. One other thing that did happen was the very poor US Non-Farm Payrolls figure on Friday which was crazy low at just 20k Jobs being created when the Market was expecting more like 200k. This could be taken as a bad sign and that the US Economy is slowing but of course it is just one Month’s data and it might have the effect that it means The Fed is less likely to raise Interest Rates as fast and the Stockmarkets might like this. We shall see…… The Week Ahead The focus this Week is obviously going to be on Parliament and what happens regarding Theresa May’s Deal which returns for the second ‘Meaningful Vote’ on Tuesday - so I expect there will be debates all day and then a Vote probably in the Evening around 7pm or something. The consensus seems to be that the Attorney General Geoffrey Cox is unlikely to come back from Brussels with much change to the Irish Backstop and it looks like the Deal will be defeated by a pretty hefty margin (some are suggesting 3 figures against it). With the T May Deal going down on Tuesday, the sequence is that on Wednesday Parliament will have a debate about ‘taking No Deal off the table’ and then in the Evening I guess they will Vote on that and it is extremely likely that Parliament will vote to avoid a ‘No Deal’ (quite how this can be done in practice when the Legal Position is that the UK leaves the EU on the 29th March by default is still to be determined). Then on Thursday Parliament will debate forcing T May to trot back to Brussels with her tail between her legs to ask for an Extension to Article 50 and there will be a Vote on this on Thursday Evening again. Of course this sounds great in theory but in reality it is much more complicated because for starters there is no guarantee that the EU will agree to an Extension (all 27 Countries need to be in agreement) and the length of any Extension is unclear. I struggle to see how anything more than a couple of Months Extension would be politically acceptable to the Tory Party (and much of the Electorate who are royally fed up with the whole fiasco) and there is talk that the EU might demand a really long Extension like 9 Months (because they would prefer the UK to stay in the EU and such an Extension would allow space for a Second Referendum etc., but I also get the sense that the EU is just as bored with this as everyone else). The most ‘interesting’ thing will be if the EU refuses any Extension and there are a couple of reasons for why this might happen. Firstly the EU (in particular Napoleon Macron) have said they would not give an Extension unless there was good reason - if it just puts off the Leaving Date by a couple of Months then it is pointless and just continues the uncertainty and frustrations. Secondly, the EU has Elections coming up soon and it will be politically difficult in the UK to be putting up Candidates and asking the UK Electorate to vote and the EU probably doesn’t want a load more Eurosceptic UK Politicians anyway. So if the EU refuse an Extension then the UK Government could revoke A50 but this must be an outside possibility because the Electorate would go bonkers and the Tory Party could easily split over it and probably more likely is that to avoid a ‘No Deal’ by accident, the Government might bring forward T May’s rubbish Deal for a third attempt because even though “No Deal is better than a Bad Deal”, they never believed this anyway. In essence it is all a total mess and anything could happen so I can see a situation where we in effect have a ‘Buyers Strike’ where demand for Shares falls away (but of course there will be plenty of Selling Pressure like there always is) and it is hard to see how Stocks can make much progress in the remaining 3 Weeks before the 29th. Of course the Pound is something to watch and if we get more silliness then the Pound could fall and this might help the FTSE100 but I don’t think it is cut and dried and there are many times when both fall together. If T May’s Deal miraculously gets through or perhaps if we get an Extension, then the Pound might go up and this also could hurt the FTSE100. It is impossible to predict any of this really and I will look at the Charts in a bit which I think will be showing some worrying signs. Crash Helmets advised and make sure the HobNobs are fully stocked-up behind the Sofa. Blog Slate I don’t feel like I made much progress on the Blogs last Week and I am not sure why !! Anyway, I did do a bit on the ‘Trade Mechanisms’ Blog but I need to do more on it and I don’t think it will be in a state to issue this coming Week. I have also written a quick draft about Psychology but that is also not one I want to put out this Week. I have another idea for a Blog which perhaps I can bash out fast and do in time for later in the Week - we shall see but there is a risk I don’t get anything out this Week. If I don’t get anything else out this Week, at least you will have Michael’s Book to read and there are loads of Blogs in the Archive which you might want to revisit (skip over to the ‘Blog Index List’ which has them all in it with Links). I get a feeling it will be a Week for avoiding the Markets !! Anyway, in the Week just gone I issued a Blog about how Investing can be done by anyone and that some Rules are a big help - you can see that on the ‘Educational Blogs’ Page which sits on the Main Website. Memory Lane To celebrate Michael getting his Book out I thought it would be good to revisit the Guest Blogs he wrote for us a while back, so here they are for you. This first one is in 3 Parts and has links to the earlier bits at the top: http://wheeliedealer.weebly.com/educational-blogs/guest-blog-on-short-term-trading-by-michael-vilage_idoit-part-3-of-3 http://wheeliedealer.weebly.com/educational-blogs/guest-blog-from-vilage_idoit-on-the-importance-of-exits http://wheeliedealer.weebly.com/educational-blogs/guest-blog-from-michael-vilage_idoit-review-of-2018 On to the Charts then…….. S&P500 As always the Charts I show here are grabbed from the brill SharePad Software Web thing that I use and if you click on the images they should grow bigger so you can see the details. I am starting with the Weekly Chart for the S&P500 because I noticed through the Week that things were shaping up to not look too good and from looking at this I think I was right !! My Red Arrow is pointing to a big Down Candle for Last Week which at least managed to Close slightly up off the Low of the Week but note how it has turned down off the sort of ‘T’ Shaped Doji Candle from the Week before which has clearly acted as a Pivot Point. My Blue Line with the Blue Arrow shows a Line of Resistance at about 2818 that has been a problem for 4 separate attempts to get through now and it looks quite a tough level.
Sorry the next Chart is a bit messy but hopefully my Arrows and this text should help you make sense of it. First off look at the Green Arrow which is pointing to a Small White Up Candle (Doji) from Friday and in the context of the previous falling Days, I would say this is just another Bearish Continuation Candle. It is most definitely not a Reversal Candle.
The Black Horizontal Line with the Black Arrow is the same as the Line on the Weekly Chart which I showed above but on that one the Line was in Blue. My Blue Arrow is pointing at the Blue Wavy Line which is the 50 Day Moving Average and note how this has been moving up and is heading towards a Bullish ‘Golden Cross’ with the Lighter Blue Wavy Line which is the 200 Day Moving Average and I have pointed at that one with the Red Arrow. This is quite interesting because the 50 and the 200 are quite ‘slow’ Indicators and a Golden Cross would be a good sign for gains in coming Months but although such a Cross looks likely, it is also possible that if Stocks turn down badly now, then we might miss the Golden Cross and this would be a very Bad sign - something to watch in coming Weeks.
The Chart in the top window below has the Daily Heiken Ashi Candles - remember these are totally different to the ‘Normal’ Japanese Candles I show on the other Charts. This time, where my Red Arrow is we have a Big Black Down Candle and this is Bearish.
In the bottom window on the Chart below we have the RSI (Relative Strength Indicator) for the S&P500 Daily. On a Reading of RSI 52 where my Arrow is this is quite a ‘neutral’ Reading (so it is not ’Overbought’ or ’Oversold’) but the direction is clearly falling.
This next one is arguably my favourite signaller - my Blue Arrow is pointing to where the Black 13 Day EMA Line (Exponential Moving Average - more recent Days get a heavier weighting when calculating the Moving Average) is curving down towards the Red Line which is the 21 Day EMA. If these Cross then it is likely we will get Weeks of poor Markets ahead.
Look where the small Black Arrow is as we had such a Bearish Cross there and the Market fell for ages.
The next one is interesting. This has the Daily Candlesticks for the S&P500 and the Pink Zone marks the Upper and Lower Bollinger Bands. Where my Black Arrow is I am pointing out that the Small White Doji Candle from Friday was actually OUTSIDE the Bottom Bollinger Band (you probably can’t see this on the Chart but I zoomed in and I can confirm it is definitely outside the Band). This is an unstable situation and suggests to me that the S&P500 might try to get back inside those Bands - it can do this by moving Sideways or by going up a bit.
I won’t show the Nasdaq Comp because it is pretty much the same as the S&P500.
French CAC40 I don’t normally show the CAC40 in my Weekend Blogs but I occasionally comment on it during the Week on the Tweets when I check the Charts at around 10.30pm every night. I fancied including it this Week because it shows how all the Major Indexes seem to be turning over at the moment. My Chart below has the Daily Candles and where my Green Line is (with the Green Arrow) that shows the Support Line of the strong move up since the start of 2019 and this Line must hold if we are to avoid more falls. My Black Ellipse is trying to show the 2 Inverted Hammer Candles that formed Last Week on Monday and Wednesday and this was a good context because they came after the steep run up and things were getting very Overbought on the RSI readings (I haven’t shown this). Note the Darker Blue Line 50 Day MA is moving up towards the Lighter Blue Line 200 Day MA like on the S&P500 earlier.
On the next Chart, ignore the Upper Window which is showing what I have already included, and look at the Bottom Window where we have a Bearish MACD Cross on both the ‘Signal Lines’ and ‘Histogram Bar’ formats (Moving Average Convergence Divergence). I don’t find this the best Indicator but all these things have more predictive power when so many Indicators are pointing in the same direction.
Next we have the Weekly Candles for the CAC40. My Blue Arrow is pointing to a Big Black Down Candle and when combined with the Candle from the Week before, this looks like a ‘Bearish Dark Cloud Cover’ Pattern.
Next up in the Bottom Window below we have the RSI for the CAC40 Daily. My Black Arrow is pointing to where we are now on a Reading of RSI 64 which is still quite a high level and most importantly it is falling.
The German DAX is doing similar things in the Short Term but I won’t show it for time reasons.
FTSE100 It is arguable that there is not much point in me showing the FTSE100 because of the shenanigans we will probably get in Parliament this Week and those are pretty much unknowable at the time of writing this so it is hard to argue that the Brexit Events are ‘in the price’ already (whilst proof-reading this I am listening to the Sophy Ridge Show and they are talking about possible Cabinet Resignations later this Week !!). However, I will show the Charts just so that we can see what they are doing and this might be useful once we get more information with regards to what happens in Parliament. First up we have the Weekly Candles for the FTSE100. My Red Arrow is pointing to quite a strange Candle which in effect Opened and Closed the Week at the same level (that helps explain why my Portfolio went nowhere last Week !!) but in the meantime it rose up quite a lot but then fell back. I am unsure what to make of this - really it just shows that neither Bulls nor Bears are in control and that is no surprise with so much uncertainty and confusion around Brexit.
Now we have the Daily Candles for the FTSE100 and my Green Arrow is showing a sizeable Down Candle from Friday. My Blue Arrow is pointing to where we had a Bearish looking 2 Day Candle Pattern and the High from here was 2761 so that is the immediate Resistance that the FTSE100 needs to get above.
To the downside, Support now is at 7041 and that has to hold. Note the Darker Blue Wavy Line which is the 50 Day MA is moving up towards the Lighter Blue Wavy Line which is the 200 Day MA and they are still in line to do a Bullish ‘Golden Cross’. However, if we see a lot of weakness now then it is possible that the Golden Cross could be missed and this would be very Bearish. If you look to the Left at the Top there is my Red Arrow and that is pointing to where we had a Bearish ‘Death Cross’ between the 50 and 200 Day MAs. On a general note there still seems to be a Sideways Range between around 6800 or so at the bottom and 7200 ish at the top.
Now we have the Daily Heiken Ashi Candles for the FTSE100. My Blue Arrow is pointing to where we had a Big Black Down Candle and that looks bad.
In the bottom window on the Screen below we have the RSI for the Daily FTSE100. On a Reading of RSI 54 it is near ‘neutral’ but the direction is down.
My Black Arrow on the next Chart is showing that the Black 13 Day EMA Line is near the Red 21 Day EMA but they have not crossed over yet - this is something to watch because if they do Cross with the 13 Day EMA falling below the 21 Day EMA, then this would imply weeks of soggy Markets.
FTSE250
For time reasons I won’t dwell on this one. The Chart below has the Weekly Candles for the FTSE250 and my Blue Arrow is pointing to a Big Black Down Candle from Last Week and that looks Bearish. Right, I need to leave it there. I hope everyone gets through next Week unscathed and don’t do anything silly !! Good Luck !! 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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