It might have been quite a significant week last week because the rebound from the Lows of a few weeks ago has been very strong and so much so that I actually placed a small Long Spreadbet on the S&P500. But on Wednesday we had a proper full-on attempt by Bears to grab hold of the markets and to take them down again, but that assault quickly fizzled out and by the end of the week we got a strong rally and a breakout to the upside. I’ll show all this in more detail when we get to the Charts and although it makes little sense in so many ways, it seems to me that Markets want to go higher and I am seriously thinking about adding to my Long S&P500 early in the coming week (probably Monday Night if the Charts give me the right inspiration).
When you just focus on the Fundamentals and ignore the Technical situation, there are a gazillion and one reasons to be Bearish and very few to be Bullish – but it strikes me that the loosening of Lockdowns almost everywhere is what the Bulls are grabbing hold of and of course there has been immense quantities of Market manipulation by the Central Banks and Governments which are forcing Investors/Traders into Stocks as the classic ‘TINA’ trade (There is No Alternative).
Anyway, we go into a bit of this on the latest Twin Petes Investing Podcast TPI 21 which you can hear here, and it also covers about 6 Stocks in a fair bit of depth which I am sure you will find interesting:
https://soundcloud.com/user-479955511/conkers3-wheeliedealer-21-the-winning-stock-that-is-up-161-ytd-covid19-spt-smmt-clin-otb As always if you go to the ‘Conkers Corner’ Channel on the Apple and Audioboom platforms then you should find TPI 21 there. Last Week When things closed on Wednesday afternoon I was wondering if the Rally was over but as I mentioned above there was a solid turnaround for the rest of the week and I managed to eke out a 0.5% gain so I am quite pleased really. I am not doing much with my Stocks because I am pretty much fully invested and I have been managing the downside risks by using Index Shorts to Hedge and that has worked pretty well. I was hoping we would go lower so I could catch a lot more of a rebound but it looks like we could well have seen the Bottom now or at least a Bottom that can endure for a few months. I will continue to monitor my Charts every night and if I see clear signs to get worried then I will be poised to quickly go Short again (probably on the S&P500) but as things stand now I think the right stance is to be Long and I am probably about 115% Long now and as I mentioned I might add to the S&P500 Long I have. I will cover this more in the Charts but I see the 13/21 Day EMA Bull Crosses on the US Markets as highly significant and it was this along with some other Indicators that led me to place the Long Trade and I will be looking closely at the Monthly Candlesticks once April is done and dusted as those should give a good indication of whether or not more gains are likely. I haven’t looked yet but I suspect the UK and European Indexes are lining up 13/21 Day EMA Bull Crosses as well so that is something to monitor. Blog Slate I updated the ‘Little Black Book’ which sits on WD2 a couple of days ago and this has lots of Stock Ideas that I have tripped over recently and it is my source of Stocks when I am looking to buy something. Have a look, I am sure you will find it useful. Oh, and of course I finally got around to pretty much finishing the transformation of the WheelieDealer websites to the new ‘Theme’. I am sort of mostly happy with it (in all honesty I am more bored by it than happy with it !!) but I might make the Fonts a bit bigger on the main text and I need to put a ‘Contacts’ box thing on it. The good news is that it has sorted the problem I had with the Dropdown Menu when accessing WD1 via an Android device running the latest versions – that is a big relief because I would have been pretty peed off if I had gone to all that work and still not fixed the issue. The other good news is that this should mean the Websites won’t be changing for at least another 5 years !! I made decent progress on a blog with a few thoughts on Hedging that I wanted to get down in words as a result of the recent sell-off. I have been experimenting with Hedging for about 3 years now with mixed results because it has been obvious that at some point in time it would be extremely useful and it really has proved to be the case. In fact, I would be so utterly bold as to say I am a lot better prepared for any future Market routs as a result and I am well pleased I have put in the effort. Hopefully that blog won’t need much to finish it so it should come out later in the coming week. I have no idea what I will work on after that but I am sure I will think of something. One of my mates has written a Guest Blog Draft which I need to proof read (but I am sure it won’t need much work) so that should be coming out soon as well. I also want to sort out the ‘Weekly Performance’ page but there are most definitely never enough hours in the day !! Archive Material Real John Major ‘back to basics’ stuff here with a couple of the first blogs I ever wrote back in 2014 – but both are still very much worth reading and I think my approach is pretty much the same even 6 years down the line: https://wheeliedealer.weebly.com/educational-blogs/the-wheeliedealer-approach-to-position-sizing-part-1 https://wheeliedealer.weebly.com/educational-blogs/the-wheeliedealer-approach-to-position-sizing-part-2-stocks Time for the Charts then…… S&P500 As is usually the case, all the Charts I show are ScreenGrabs taken from the excellent SharePad Software that I use and if you click on them then they should grow larger so you can see more detail. I noticed that with the change of the Website Theme this has altered a bit but I am sure you can figure it out !! On my Chart below we have the Daily Candlesticks but I am not really looking at these here. My fixation is on the Black 13 Day EMA Line (Exponential Moving Average) and the Red 21 Day EMA Line and where my Red Arrow is we had the ‘Bull Cross’ a couple of days ago and this suggests more upside to come - and quite often we are talking at least a few weeks. This ‘Bull Mode’ is now in play until we get the opposite Cross which is the ‘Bear Cross’ and we had one of those back where my Black Arrow is and look what happened !! As you can see these lines are amazingly predictive and therefore extremely useful.
Next up is the Weekly Candles for the S&P500. My Blue Arrow is pointing to a sweet Up Candle from last week and this is Bullish.
In the bottom window on my Screen below we have the RSI (Relative Strength Index) for the S&P500 Daily and on a Reading of RSI 55 where my Black Arrow is, this is barely above the Neutral 50 Level and has lots of room to keep going up it if wants to.
Finally for the S&P500 we have yet more Bullish signs. Here we have the Daily Candlesticks and the Pink Zone highlights the Upper and Lower Bollinger Bands. My Black Arrow is pointing to where the S&P500 ‘Gapped-up’ on Friday (it Opened with a gap from the Close the Day before) and note how it also Broke-out above the Resistance from last Tuesday which is marked by my Green Horizontal Line (marked by the Green Arrow).
Note also the space up to the Upper Bollinger Band – this also suggests the S&P500 can go up a bit more in the coming week.
Brent Oil Spot
The Oil Price is important to keep an eye on because it has quite an impact on the FTSE100 which has heavy and skewed weightings to big Oil Stocks like Shell RDSB and BP. No doubt all the ‘experts’ will be banging on about Supply and Demand etc. etc. but it is all bollox and nobody really knows what is happening – but the Charts can give us some useful pointers and the collective ‘Wisdom of Crowds’ encapsulated in the Charts can give much more useful predictions than a million Oil Gurus. Here we have the Daily Candles for Brent Oil Spot and of course we have the 13 and 21 Day EMA Lines. At the moment these are in ‘Bear Mode’ after the Bear Cross where my Black Arrow is (look how much dosh you could have made if you had simply Shorted Oil when this Bear Cross happened) and we can only be a lot more confident that things are changing here once we get a Bull Cross. At the moment that is not happening. However, if there is a drawback of the 13/21 Day EMAs, it is that they are a little bit ‘slow’ (in reality this is actually a strength – if you use and understand TA stuff well then you will know that the price you pay for speed of signals is that they are less reliable the faster they get) and you will get other Signals that suggest the Trend could be beginning to change. In this case we have a Sideways Range between my Blue Line at the Top (Blue Arrow) at about $36.4 and my Red Line at the Bottom (Support) at about $24.6 and shown by my Red Arrow. This Range actually simplifies things for us – if the Price breaks-out above Resistance where my Blue Line is then we are likely to keep moving higher and if we fall below the Red Support Line, then expect more downside. It really is that easy. There is something else to note here as well. First look at where the Low is from which my Red Line is derived and then look at the next Low where my Green Arrow is. You should see that the Low where my Green Arrow is is higher than the previous Low. It is early days and very likely a false signal, but it is a possible sign that things might be changing here.
FTSE100
First up the 13/21 Day EMA Lines and my Red Arrow is pointing to where they are now and they are still in Bear Mode from where my Green Arrow marked the Bear Cross and we need a Bull Cross for this to change. Note however that the Lines are definitely closing together – when this happens it doesn’t take much of a move up or down to change the picture significantly.
The next Chart spoils the Bullish Picture that we are seeing elsewhere and this is the Weekly Candles for the FTSE100. My Blue Arrow is pointing to the Candle from last week and it looks a bit of a Bearish ‘Hanging Man’. My suspicion is that the FTSE100 is being held back by the Oil Weightings but the easy way for us to monitor this situation is to watch for the High from last week which was at 5894 to be taken out. If the Price can break above 5894 then the Bearish intent from this Weekly Candle is probably going to fail.
In the bottom window on the next Screen we have the RSI for the FTSE100 Daily and on a Reading of RSI 44 it is not far from the Neutral 50 level and obviously there is lot of room for it to fall or rise !!
Last up for the FTSE100 we have the Daily Candles with the Pink Zone marking the Bollingers. My Red Arrow is pointing to a tasty Up Candle from Friday and note how this ‘swung’ up from the Candle from Thursday which was after the big drop on Wednesday.
As I mentioned earlier, the key here is the Resistance where my Blue Line is at 5894 and if it can get above this then we will next attack 6000 then there is Resistance at about 6088 and then where my Green Line is at 6231 (Green Arrow).
DAX
I won’t show much on the main German Index but I wanted to lob this in because it suggests more Bullishness. Where my Black Arrow is on this Daily Candles Chart we are bang on a 13/21 Day EMA Bull Cross.
FTSE250
Sadly we don’t yet have a Bull Cross on the 13/21 Day EMAs for the FTSE250 but where my Black Arrow is we are not far off and with the way the Lines are coming together it wouldn’t take much bullishness in coming days to trigger a Bull Cross. I have also had a stab at the start of an Uptrend Channel where my Green Lines are – it might not happen but it looks promising to me. OK, that’s it for this weekend – keep your wits about you and don’t go rushing to do dumbass things. Good luck and all that, 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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