I don’t intend this blog to be hugely lengthy as I still have a feeling of holiday mood and of course tomorrow we get ‘back to work’ really but I must say I am very eager to get on with some sort of normality again.
I’ve really enjoyed this Xmas / New Year break despite the abysmal weather and it does seem like it has been unusually long this year although that is probably just some sort of weird psychological impression I have rather than any actual reality. It might be because of where Xmas Day fell being on a Wednesday and we seemed to have loads of little ‘non’ days where the Markets were open and several half-days which are a bit silly. So I have a clear feeling that I have not had to work all that hard in recent weeks.
It’s funny how having the Markets open does put some sort of psychological pressure on me despite being primarily a long-term Investor and not really doing a lot. I do find that when the Markets are shut I can relax a lot more and I don’t feel the same draw to look at my Fone and see how my Stocks are behaving, which of course happens quite a lot on normal Market days. I wonder if this is a common feeling among even long-term Investors and I suspect for Traders it must be a very strong sensation?
Despite all that, I am really keen to get back on with things and I think part of this is that I spent a lot of time in 2019 focusing on Index Charts and how to interpret them and in 2020 I want to do a lot more in terms of Index Trades which will be not day-trading or any of that sort of thing, but more about placing Trades, both Long or Short, which will run for perhaps a couple of weeks or whatever. Obviously I will be using strict Stoplosses and my intention is to only take very high probability Trades and to start off fairly small with a view to doing larger Trades some time down the track if I can make it work well. I suspect I will focus on the S&P500 but I will not be overly tied to one Index and might use things like the FTSE100 and perhaps even the FTSE250 if I see the need. Liquidity tends to be important. It should be a nice challenge and I am keen to crack on with it and it will also be a welcome change to see the need for a focus on Politics to move away as that will become increasingly a non-issue as Parliamentary Democracy is pretty irrelevant when you have a Government Majority of 87 and a load of new Tory MPs who will not be rocking the boat. In simple terms, Boris will be able to pass any legislation he fancies and the bleating from Opposition Parties will just be words in the breeze. New TPI Podcast A few days ago we released the second of the Podcasts we recorded just before Xmas and you can find it on Soundcloud at the link below. If you use those nasty Apple things, then go to the ‘Conkers Corner’ channel and you should be able to find the Podcasts on there. The same applies if you use Audioboom, whatever that is: https://soundcloud.com/user-479955511/conkers3-wheeliedealer-the-winning-stock-generating-1692-profit-rch-futr-itm-pets-itv Interesting BearBull snippet I was reading the latest copy of ‘Investors Chronicle’ this afternoon (dated 3-9 January 2020) and on page 14, Mr BearBull has written an interesting article and this bit intrigued me: ‘The list could go on, but the point is that, among all the stuff that agitated financial markets during 2019, most was barely mentioned this time last year. It was ever thus. Those events that have the biggest impact are rarely widely forecast. How could it be otherwise, since to forecast is to discuss, to discuss is to adapt and to adapt is to avoid. Meanwhile, the dire events – the ones that aren’t avoided – don’t get discussed, except by swivel-eyed loonies who are ignored until we see, too late, that there was method in their madness.’ We often hear that we should ignore the Macro ‘Noise’ and there appears to be a lot of sense to this although in reality that is difficult to do due to various psychological factors etc. Anyway, the bit that intrigued me was Mr BearBull’s explanation that, in effect, if a problem can be foreseen then it tends to be avoided and this makes sense really because often it is in the power of Politicians to manouevre to avoid the dangers and this does seem to happen in practice. For example, for all the screaming about the fears of a ‘No Deal’ Brexit, the fact is we managed to avoid it and that is likely to continue as we move to the next stage. UK Investor Show I keep meaning to mention this Show but forgetting to include it. Anyway, there are 2 big Shows that I have been to in past years which of course are Master Investor in Islington and this one that is usually in Westminster. It takes place on Saturday 25th April 2020 but at the moment I am not thinking of going to it but I thought Readers might be tempted. Anyway, you can find out details here: https://www.ukinvestorshow.com/ If you do want to go, then do a search for ‘Discount Codes’ or shout on Twitter or something and usually a FREE ticket can be tracked down. Master Investor Show Islington This is taking place on Saturday 28th March 2020 and is held at the Business Design Centre (BDC) in Islington which is in that London. I have probably been to this for most years over the last couple of decades and it can be worthwhile both for the Speakers and the chance to meet up with other Investors, although the Companies tend to be dominated by Oil & Gas and Resources AIM stuff which is certainly not by Cup of Darjeeling. Having said that, there are usually a handful of proper Companies and at least the limited choice makes it easy deciding which Stands to visit !! The Admission Fees are pretty cheap but if you use Discount Code BFMI you can probably get a FREE ticket: https://investoraccess.masterinvestor.co.uk/events/master-investor-show-2020/ I haven’t totally decided if I am going yet but I probably will and no doubt I will be mostly hanging around the Canteen area on the top floor. There is a Restaurant of some sort next door and usually we pop in there. It used to be pizzas but I think it was some sort of burger joint last year. NOTE – it looks like the Share/Cenkos Growth & Innovation Forum which is on February 11th is now full up but if you contact Dan the Editor at Shares Mag maybe he can help you. If you are lucky enough to have a Ticket already, then I will see you there (make sure you grab me and shout “Hi Wheelie” in my lughole). Blog Slate I wrote a lot about the upcoming Blog pipeline last week in the blog so I won’t write too much here. In essence I published the first of the ‘How to be a Long-term Investor’ blogs on WD1 a few days ago and I expect to issue Part 2 later in the coming week. After that I will probably have ‘Scores on the Doors 2019’ completed and once that has been issued I will move on to something else. I seem to recall having an idea of writing a blog to describe the difference between ‘Research’ and ‘Analysis’ and I might try to create something on that subject. Other than that I have plenty of ideas for blogs to write and quite a few that are half-written. The Ghost of Christmas Past This is from April 2017 and I had forgotten about even writing it. After more than 5 years of writing almost two blogs every week it does get to the stage of where you lose track of ever seeing some of the things you have ‘created’ !! https://wheeliedealer.weebly.com/educational-blogs/affirmative-action-timidity-vs-assertiveness As always, if you go to WD2 (in fact you should be reading this blog on the WD2 blog page) and head to the ‘Blog Index List’ page, then you should find the full list of the blogs I have written over the years with links where appropriate. OK, just a few charts to finish this off. I don’t anticipate doing many because not a lot has changed really from the quite overbought situation I talked about in last week’s Charts. S&P500 As per usual, the Charts I show are taken from the brilliant SharePad Software that I use, and if you click on them then in theory the Charts should appear larger on your screen and you might be able to see more details. First up the Monthly Chart. I didn’t show this last week because it wasn’t quite complete but now we have the full December Candlestick and my Blue Arrow is pointing to it. Please ignore the little Black Doji which appears afterwards – this is for January and is not valid until a full Candle is created. December gave a nice White Up Candle and this is Bullish. Note, it is totally possible to be Bullish on a monthly basis, but Bearish on a shorter timeframe.
On the Weekly, where my Blue Arrow is, we have a ‘Long Tails Doji’ for the S&P500. This could mark a Turning Point from which the S&P500 drops back.
In the bottom window on the Screen below we have the Relative Strength Index (RSI) for the S&P500 Daily. On a Reading of RSI 67 and falling, this looks like a further drop is likely in the short term.
Lastly for the S&P500 we have the Daily Candles with the Pink Zone marking the Upper and Lower Bollinger Bands. My Black Arrow is pointing to a small Doji Candle from Friday which is below the Candle from Thursday and is clearly showing some sort of pullback. The key thing here is the bottom Bollinger Band at about 3200 and if that fails as Support, then we will go lower.
FTSE100
The Chart has the Monthly Candles for the FTSE100 and my Blue Arrow is pointing at the Candle from December (please ignore the one in the Black Ellipse because this is January and not valid until fully formed) and this is a decent White Up Candle and really it is Bullish. The Candle does have quite a long ‘Wick’ and this tops out at about 7660 which is clearly a Resistance Level that the FTSE100 must crack soon. My Red Arrow is pointing to where the All Time High happened back in May 2018 and that is at about 7906. A Breakout over this level would be hugely Bullish.
Now we have the Weekly Candles for the FTSE100. This is quite interesting because the Red Curve (marked by my Red Arrow) has been for weeks an attempt to show a possible Bearish ‘Rounding Top’ kind of pattern and I have been of the view that the recent strength could make this unlikely. However, we are at a key point now where if we drop back, then that might suggest the Bearish Rounding Top is actually a real possibility.
My Blue Arrow is pointing to a great example of a Bearish ‘Hanging Man’ Candle and it is very likely that the FTSE100 drops back from this. The key here is Support at 7532 at the bottom of the Hanging Man and if that fails then we go much lower most likely. After a strong move up, the Hanging Man is in a sweet context to predict a fall in the short term.
In the bottom window on the Screen below, my Black Arrow is highlighting a Reading of RSI 63 on the Daily. It is not silly high but it has dropped back and it is quite likely we see more falls.
On the next Chart I am interested in the Black Wavy Line which is the 13 Day Exponential Moving Average and the Red Wavy Line which is the 21 Day EMA. Where my Black Arrow is we had a ‘Bull Cross’ and this is still in force so on a slightly larger timeframe the FTSE100 is Bullish. Clearly we could get a Short-term Pullback but still be Bullish on the 13/21 Day EMAs – if we have continued weakness then obviously this could change.
Finally we have the Daily Candles for the FTSE100 with the Pink Zone marking the Bollinger Bands. My Blue Arrow is pointing to a Small Up Candle from Friday and this included a strong Intraday Recovery off the Lows and built on Thursday’s Candle – which suggests some strength. The Upper Bollinger Band is at about 7660 and this is Resistance which needs to be got through. With all the Iran shenanigans helping to keep the Oil Price perky and with Sterling behaving weakly again, we could see the FTSE100 go up (the Major Oil Companies like RDSB and BP. have big weightings in the FTSE100 Index).
OK, that’s it for tonight, good luck in the coming week and I hope things go your way in 2020 !! Cheers, WD.
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