After just over 5 months of 2020 I have at last managed the round trip and seen my Portfolio smashed to pieces a couple of months ago, and now back to having my head above water and breathing nice unadulterated air !! It’s a great feeling and vindication of my Approach with the focus on Hedging and Long Index Trades to make the most of the dip and the rebound; and with luck I can add some more gains before the Markets decide to get grumpy again.
In last weekend’s Charts Blog I mentioned how I was a bit worried about the Race Protests and more importantly the Riots and Looting and consequently I ended up closing all my Index Longs to lower Exposure and Risk and then a few days later when things had calmed down, I started adding again. It’s all on my ‘Trades’ page on WD1 and on this latest Podcast, TPI 24, there is more about it (by the way, you can get it on something called ‘Overcast’ now I understand – it’s on the ‘Conkers Corner’ Channel):
https://soundcloud.com/user-479955511/conkers3-wheeliedealer-24-is-cash-king-gaw-fdev-fevr-ajb-hl-grid-hfd-ocdo-php-luce Last Week Well I am very happy to report that last week my Portfolio added 3.3% which is a very decent performance. This gets it just into positive territory and hopefully I can build on this and somehow turn what was looking like a terrible year just recently, into something not too bad. The Markets are certainly being friendly to Bulls at the moment and I see no reason why this cannot last a bit longer as per my comments on the Podcast and from what I discuss about the Charts below. If and when things do go smelly again, I will be closing out my Index Longs and switching to Shorts to get the Hedges back in place. My Strategy is staying exactly the same as before but I want to increase my Index Longs, particularly on the FTSE100. I am roughly about 120% Long now but before I reduced because of my fears over the Riots, I was up to about 150% and I would like to get back nearer this figure. I need to be careful and not get over-exposed obviously but I really believe we must ‘make hay when the sun shines’. I might avoid the US because clearly things are a bit touchy over there at the moment and the FTSE100 is a play on Oil rebounding as well. I mentioned on Twitter in recent days how I was working no ‘Optimising’ my Portfolio and I expect to be possibly doing a few Trades in line with this in coming weeks – there is a Stock in particular that I hold as normal Shares but I want to mirror it as a Long Spreadbet. I might do that trade quite soon – I am stalking it. On top of that I have a few Long Spreadbet Positions on Stocks that might be a bit big – I might chop these a bit. We’ll see – I won’t be doing much radical. I have the firepower in my iWeb Income Portfolio to add to a Position or maybe to buy a new Stock. On the Podcast we discuss Gresham House Energy Storage Fund GRID – I might be buying that soon. Other than that, there are several candidates and ultimately I want to go up to 15 Holdings in that Portfolio. Oh, you might not have seen that I have amended what was formerly the ‘Weekly Performance’ page on WD1 – it is now the ‘Monthly Performance’ page and I think it is a big improvement for both you lot who have to read this cr*p and for me to do the actual work !! Go have a peek at it. Blog Slate I seem to have several irons in the fire where my Blog writing is concerned at the moment. I have sort of written a couple by accident after some recent flurries of Tweets that I felt were so important and useful, that I should capture them in Blog form so we have them in the Archive and Readers can refer back to them easily whenever they want to. I guess these will be released in coming weeks – but obviously I don’t want to put it all out at once because it is more work for me and because I like to constantly be putting out fresh stuff over time. I have several other Blogs in draft form that need finishing and I dreamt one up this morning which is very much linked to the string of Tweets I sent out on Friday Night and on Saturday Morning – I think it is a decent subject and I might be able to write it and finish it from scratch this coming week and get it out maybe next Thursday or Friday. If I can’t manage that, I will put something else out. And I have a few Guest Blog things in the pipeline which are being refined and tweaked – so there should be a few interesting things as a result of these in coming weeks as well. Digging in the Basement I often get asked various questions about planning for Retirement and suchlike from Readers, and I suspect many newer People to the whole WD thing might not have seen these old classics: https://wheeliedealer.weebly.com/educational-blogs/when-can-i-retire-and-how-much-capital-do-i-need-part-1-of-2 https://wheeliedealer.weebly.com/educational-blogs/when-can-i-retire-and-how-much-capital-do-i-need-part-2-of-2 Better see what the Charts are saying then. Brent Oil Composite As always, the Charts I shown are Screengrabs from the superb SharePad software I use (you might have heard of it !!) and if I have uploaded them property to the website then you should be able to click on the images for more detail. I have been showing this Chart for weeks now as it is very important for how the FTSE100 moves which I have Long Spreadbets on. This is the Daily Chart of Brent Oil Composite and is very bullish. My Black Arrow is pointing to a big Up Candle from Friday and the key thing is that this has recently Broken-out through the Blue Resistance Line (Blue Arrow) and it has also got above the recent Peak at about $38.5. If you have been reading my Charts each weekend, then you will have seen this unfolding with me telling you what the key Levels were and what they meant. Former Resistance should become Support so we now have an underpinning to the Oil Price. Next up is Resistance at about $45 then around $50. My hunch is we will see $50 soon enough. Of course an important event here was where my Green Arrow is and we got a Bull Cross on the 13/21 Day EMA Lines (Exponential Moving Averages).
Next we have a Weekly Chart and this shows the Weekly RSI Indicator that I mentioned earlier (or I mentioned it on a Tweet or something). I was reminded of this by a mate on Twitter and it is something I keep meaning to look at and forgetting.
We need to look at the Bottom Window and where my Black Arrow is we have a Weekly RSI (Relative Strength Indicator) for Brent Oil Composite of RSI 45. As you can see on the Chart, this is barely even at the Neutral RSI 50 level and suggests that despite a strong move up so far, the Brent Oil Price is not even remotely overbought.
On the next Chart, I am just showing you where to find the Weekly RSI Indicator on SharePad. I already had a Weekly Candlesticks Chart setup and I have been using this for ages, but now I went to the ‘Indicators’ Top Menu and you need to play around with this and get what you want. Make sure you tick the Box on the first Indicators Pop-up Box where it has the Red Square and it says ’20 RSI’.
You can also find this under the ‘Add’ Menu.
I had a suspicion we would see something interesting on the next Chart (I find that over time with more and more use of various Charts and Indicators, you start to learn how they relate to one another and you can guess what will be happening on a particular Chart) and I am right. This has the Daily RSI and where my Black Arrow is we have an RSI of 66 which is very high but not extreme. So this tells us that in the shorter term, on the Daily, we are getting near Overbought, so a Pullback may be needed, but on the longer term Weekly RSI we are not Overbought at all.
These situations are not at odds with one another and it is perfectly normal and logical that you can get Shorter Term wiggles within bigger picture, Longer Term, moves.
FTSE100
Now I have the Weekly RSI setup on my Chart Screens, I might as well have a look at it !! On the Chart below we have a reading of RSI 49 for the FTSE100 Weekly in the Bottom Window where my Black Arrow is. This is not even at Neutral yet and nowhere near Overbought which suggests the FTSE100 can move up a lot yet.
Next the Weekly Candles for the FTSE100 (I have minimized the Weekly RSI Indicator by dragging it down with the mouse) and my Blue Arrow is pointing at a Big White Up Candle and that is Bullish. My Red Line (Red Arrow) is marking Resistance at about 6850 (another 350 Points from here for all you Spreadbetters reading this !!) and my Black Shaded Box is trying to show a Zone of Resistance between about 7000 to 7700.
I think 6850 will be difficult but if it can get through that, then the 7000 to 7700 could be quite a slow slog but I won’t be surprised to see it in that Zone.
Next my Red Arrow points to a Bull Cross on the 13/21 Day EMAs from a few Weeks ago on the FTSE100 and this is still in force. It is vital that you don’t fight this by being Short.
In the bottom window below we have a Reading of RSI 64 on the Daily where my Black Arrow is which is getting high but it is not Overbought. It might ease back a bit (there is often a ‘Monday reverses Friday’ effect) but I suspect any Dips will get bought. I will be looking to add to my Long Position and may do this on Monday Night. All my Trades are shown on my ‘Trades’ page on WD1.
Mind you, I did pick up on Twitter that there are rumours of AstraZeneca AZN merging with Gilead Sciences $GILD and also that OPEC might cut Oil Production – both of these could boost the FTSE100.
S&P500
I am no longer Long on the S&P500 after getting concerned about the Protests/Riots. I am still steering clear of it but the US sets the tone for World markets so I will just have a look at a few key Charts. First up the Weekly RSI in the bottom window and on a Reading of RSI 57 where my Black Arrow is, this is not overbought and clearly can go higher.
Next the Weekly Chart for the S&P500 Candles and my Blue Ellipse marks a big Up Candle for last week. This smashed through the Black Resistance Line at 3136 (Black Arrow) and that should now act as Support. Note it has Support from the Red Line (Red Arrow) at 3000 as well.
The big question now is when will we see the All Time High (ATH) taken out? This is where my Blue Arrow is at 3393. Amazing times we live in……..
Finally we have the RSI for the Daily in the bottom window for the S&P500 and on a Reading of RSI 69 where my Black Arrow is, this is very near Overbought. However, it might eke a tiny bit more out but in the short term, for a few days, I would expect some sort of Consolidation move where it either eases back a bit or it goes Sideways for a while before the next Leg up. Such a Consolidation would make an assault on the ATH a near certainty.
OK, that’s it for this weekend – good luck everyone and don’t fight the Markets !! Regards, WD.
2 Comments
Liam Jackson
6/14/2020 08:58:49 am
Mr Dealer man..! #blacklivesmatter.
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WheelieDealer
6/14/2020 02:22:24 pm
Hi Liam,
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