They say things always ‘Come in 3s’ and I have definitely had a dose of that this Week (fortunately it wasn‘t 3 Profit Warnings - I have had plenty of those this Year). The first one was on Tuesday when I was getting ready to head off to Chiswick for the Mello Event when unusually I just couldn’t find the Keys to my BMW Z3 anywhere. Of course in the back of my mind I knew exactly where they were but I did not want to face up to the reality - so I pointlessly looked in the same places over and over until I could dodge the inevitable no more. So I went out to my Car and there they were in the Driver’s Door and had been there all night !!
The Night before I had gone out to grab something from the Car and I got chatting to a crazy, drunk, Neighbour about some sort of silliness and I must have got distracted and in my confusion I no doubt headed back indoors with the Keys still in the Car - amazing the Car was still there !!
I then headed off to Mello which was dead easy to get to from Windsor and the Hotel was just off that big Roundabout with the Traffic Lights as you come off the M4 for Kew Gardens - but once I got down into the Underground Car Park, there were no Disabled Spaces left so I had to park in a Space that had a Pillar next to it but I had to put the Car as far forwards as possible so I would have room to open my Door and build up my Wheelchair - and of course despite what I thought was a crawl, I managed to smack into the Wall !! So that was Number 2 (yes, it is quite pooey) but it has only put a slight mark on the Bumper and it had to be just where I had painted the darned thing in the Summer !!
So then I get to Number 3. This time I went out to my ‘old’ Seat Leon FR to empty everything out of the Car like CDs and abandoned Coins etc. and then I couldn’t open the Doors because the Battery had gone flat !! I was livid by this point and I am very irked that it has gone dead after just 3 Weeks of not being driven but I suspect it is partly because of the Colder Weather. It is a pain because I am supposed to be picking up my new Leon Cupra tomorrow but thankfully I managed to start it today with one of those ‘Jump Box’ things I have and it is running fine. I had been due to get the Cupra on Friday but that got delayed because my Mate who is having the old Leon had to rearrange due to work hassles. It is ironic that my old Leon has been brilliant for so many Years and I was feeling quite sad to see her go but after the problems with the Hand Controls and now not starting I am utterly fed up with the damn thing and can’t wait to see the back of it !! (How fickle ‘love’ for a Car can be). Anyway, the Mello Show was superb and I really enjoyed it. You may have seen the Blog I wrote a couple of Days ago after my discussions with Graham Whitworth the Chairman of FireAngel FA. but apart from that I did my usual thing of hanging around the Bar and chatting to loads and loads of People I know from Twitter etc. and I also met many new People which was very inspiring. It’s funny cos I am convinced that when People start off with Investing and Trading they are obsessed by ‘Tips’ and getting Ideas of Stocks to buy but once you have been doing it a while you sort of realise that in many ways finding Stocks is the ‘easy’ bit and it is more about how you manage your Portfolio and the Psychology aspects that make the real difference. I tend to find that when I meet up with other Experienced Investors we seem to mainly discuss how we manage our Stocks rather than any Stock in particular - the odd one will come up like for example a few of us discussed FireAngel a bit but in the main it is about the Approaches we all have. So maybe when you meet with other Investors and you stop talking about individual Stocks you will know that you are making progress !! Mello seemed very well attended (I guess the London location helps) and the comments I heard from the peeps I spoke to were completely positive as they always tend to be for these Events. There is no doubt these are the best ‘Shows’ around and if you have not been to one then it is certainly worth making it a priority for coming Shows. Oh, and by the way, I am not actually giving away a Free BMW - you missed your chance on Monday Night…… Last Week Yet another choppy Week and my Portfolio managed to cobble together a Gain of 0.8% which I suppose wouldn’t be a bad Week in normal times but after all the Falls we have endured this Year it is going to take a helluva lot more than that to sort my out the damage my Portfolio has already taken. It has been a very frustrating (and largely inactive) Year and I won’t be upset to see 2018 out of the way but I suspect that 2019 might be quite difficult for a while as well. The immediate Event is the Parliamentary ‘Meaningful Vote’ on Theresa May’s Brexit ‘Deal’ which is on Tuesday 11th December and really we just need to wait for that and see what comes out from it because there are so many outcomes that are possible and it could go in any direction. Having said that, it seems almost certain that T May will be defeated and the outcomes which follow on from that seem mostly bad so perhaps the Markets will take another kicking but it could be that the Pound takes the brunt of this. It is really hard to judge how much ‘Bad News’ is already baked into Stock Prices - it strikes me that many Stocks look at least Good Value if not downright Cheap but that of course does not prevent them from going lower and it is more about the Uncertainty and Nervousness that is causing the Buying Pressure to be relatively low compared to the Selling Pressure - and until that changes we will probably have to suffer more turgid Markets and this could run into 2019. Having said that, I have noticed that a few of my Stocks look like they are getting near the end of their Downtrend Channels and some have Broken-out - maybe that is saying we are near some sort of Floor. Even if T May gets her Deal through (perhaps it will fail on the first attempt but then be tweaked and get through on a second attempt) we then go into the ‘Trade Discussions’ bit and it is obvious that this could cause many Political ructions as we go through the various stages - yet more Uncertainty which really won’t help Stocks find their footing. And this could last for the whole of the 2 Year Transition Period and perhaps even drag on a bit longer. What a fiasco. On top of this there is yet more evidence that the Global Economy is slowing although as yet it does seem to just be a bit of a drop off from the peaks of Growth rather than anything truly worrying like a full-on Recession or something - but of course an apparently temporary Slowdown can become something much worse so we need to be on our guard and vigilant. There has been some positive news this weekend with Trumpy and the Boss of China calming down the Tariff Trade Wars and this might help a bit but I think Brexit is putting a cloud over Europe and the UK and also Europe has problems with Italy etc. It is US Non-Farm Payrolls again this coming Friday and around 200k Jobs are expected to be created but these Numbers tend to be more for fun at 1.30pm UK time on Friday afternoon for Traders rather than anything that really impacts the Markets in a sustainable way. It might gives pointers on the speed of US Federal Reserve Rate Rises of course. So bearing all this in mind, my Strategy remains the same of just doing not very much and just tending to my Stocks as they require and looking to Hedge a bit via Index Shorts if I sense the need to. At the moment I have no Shorts in place after luckily closing the S&P500 Shorts I had running and my timing was quite sweet because the US Markets have risen a lot since I closed them (as always, see my ‘Trades’ page for full details). I am in no mood to Buy anything although I do see Value around - but the simple reality is that ‘Cheap’ Stocks can always get a huge amount ‘Cheaper’ and catching falling knives is rather career limiting. December Market Bear in mind that my ‘UK Stockmarket Almanac’ is getting a bit out of date now as it is the 2016 Edition but the Monthly Stats won’t be far out. Despite all my comments above about how Markets might still find life tough, December has the honour of being ‘The Strongest Month’ on average and the Average Return for the FTSE100 has been 2.3% which is pretty juicy and it has risen for 84% of Years since something like 1984 (when the FTSE100 Index was first constructed) - that’s impressive. Bearing in mind that the Average Yearly Gain for the FTSE100 is probably around 7% then you can see how strong a contributor December has been in the past. In fact, in the period since 1984 (to 2016 remember) the Market had only fallen for 5 Years out of 28 so it is a strong record. Interestingly before December became the Best Month, it was April. Also this is a Global thing with 70 World Indexes rising in December in a similar way. A typical December sees a steady rise for the first 2 Weeks and then, using the words from the Almanac, “it goes into overdrive” and rises strongly in the last 2 Weeks. This is in fact the strongest 2 Week Period of the Year and contains the Top 3 strongest Days. The FTSE100 also tends to outperform the S&P500 in December. Something else to think about in advance is the concept of the ‘Santa Rally’ which tends to start around something like the 14th December (I might be wrong on that date - but it is not crucial to go Long on a particular date - the key is to look at the Charts and be ready to put a Long Trade on once the Buy Signal is there) which usually means good Gains to be had by putting a Long Trade on the FTSE100. I did this in the last couple of Years and expect to give it a go again this Year if the Charts set-up in the right way - I will be watching them closely as always and no doubt Tweeting out every night about what I am seeing. I might of course use the S&P500 if I am concerned about Brexit skewing things. After the miserable Year so far I am getting quite excited by this !! (but of course, it might be one of those Years where Stocks fall…….). Blog Slate I am really busy at the moment because my Mum is extremely ill after having had a Stroke and at 83 Years Old it is not looking too good. I have been going down to Swindon to the Hospital to see her and my Brother every couple of Days and this is obviously munching into my time but I have to prioritise this. I am not sure how things are going to pan out but I suspect I will only need to do these trips for a few Weeks at the most. We shall see. Anyway, this means that my time for scribbling Blogs is very limited and I will do what I can but there is no guarantee I can keep producing at the current rate. I have pretty much finished a very good Draft of the complete Blog Series on ‘Certain Uncertainty and Moving into Cash’ and this means I have pretty much 4 Weeks of Blogs lined up and I should be able to do something at the Weekends like what I am writing now !! Last Week I issued the first of those ‘Moving into Cash’ Blogs and I also issued a Blog about FireAngel FA. - both of which you should be able to find on the ‘Educational Blogs’ page. With that Blog Series pretty much done I will need to look through my Ideas list and see what I fancy writing next - hopefully it will be something interesting both for me to bash out and for you to read. There are many changes I want to do to the Website but the fundamental Revamp has been mostly done now (although I think there are 2 WheelieBin Pages and I must straighten that out !!) and it is mostly tweaks but I will only do this once I have the time. I also have some Book Reviews to do but they will have to wait also. I spoke with @Conkers3 at Mello and we should be doing another Podcast for ‘Twin Petes Investing’ very soon - I have a list of Ideas for that which I want to get stuck into but it is the time factor yet again that is limiting things (if you have not heard the first Podcast we did then go to my ‘Podcasts / Videos’ Page and there is a link). Blast from the Past Earlier in this Blog I was gibbering on about how People manage their Portfolios and this Blog Series is sort of relevant to that so I am chucking it in for your delight (or horror) this Week: http://wheeliedealer.weebly.com/educational-blogs/pin-the-tail-on-the-monkey-musings-on-portfolio-management-part-1-of-2 http://wheeliedealer.weebly.com/educational-blogs/pin-the-tail-on-the-monkey-musings-on-portfolio-management-part-2-of-2 I have a suspicion I actually put those Blogs in a recent Weekend Blog so I am throwing in this Sporting one as a back up !! http://wheeliedealer.weebly.com/educational-blogs/how-to-be-a-winner OK, let’s see what the Charts are saying about the likely Road Ahead….. Dow Jones Industrials Index (DOW) As always the Charts are taken from SharePad Screens and just a ‘Cut ‘n Paste’ job - I have set them up so you should be able to click on them to see more details. First off a bit of fairly Big Picture stuff and what I am pointing out here on the DOW is the Range that seems to be existing between my Red Line and Black Line on the Chart below. Note also that the Dark Blue Wavy Line 50 Day Moving Average is heading down towards the Lighter Blue Wavy Line 200 Day Moving Average - we need to watch this as it might do a Bearish ‘Death Cross’ if the 50 drops below the 200 but it is often the case that we get such a Signal which then reverses quite soon afterwards. The ‘Death Cross’ in this form is quite a ‘slow’ Indicator and not hugely reliable but of course for all the huge Market Drops in history we have had one of these on the way !! You should be able to see how the 50 Day headed down towards the 200 Day earlier in the Range but we managed to avoid a Death Cross that time. On the basis of this Range, there is clearly good Support down around 24000 to 24500 ish and Support at 23500 is really important and must hold.
On the Chart below I have zoomed in on the Daily Candles for the DOW and my Blue Arrow is pointing to a nice Up Candle from Friday - that looks good in particular because on Thursday we got a bit of a ‘Long Tails Doji’ Candle which was hinting that the strength of the move up was waning - however the strength on Friday has overridden this.
Mind you look how it stopped at Resistance from the Dark Blue Wavy 50 Day MA Line - obviously it needs to get over that now and if it can then there is a good run up to about 26270 which could be difficult Resistance.
In the bottom window on the Screen below we have the Relative Strength Index for the Daily on the DOW. On a Reading of RSI 51 where my Arrow is this is over the 50 ‘Neutral’ level which I understand is bullish.
Next we have the Daily Heiken Ashi Candlesticks. Remember these are utterly different to the usual Japanese Candlesticks that I show and must be interpreted in a very different way. My Arrow is pointing to a nice Big White Up Candle from Friday and this is Bullish.
If you are struggling to understand these HA Candles - then look back to the left on my Chart and look how the Colours change and the Candles go Narrow and Long as each move develops.
Now we are back to ‘normal’ Candles but what I am focused on here are the wavy Lines which are the 13 Day Exponential Moving Average and the slower 21 Day EMA. I love this Indicator as its predictive power is immense and I find it really reliable across most Assets I look at. My Arrow is pointing to where we are very near a Bullish Cross between the 13 and 21 Day EMAs - if we get this Cross, then it would suggest that December is going to a decent Month for US Stocks !!
After such a Cross, I will be looking for opportunities to do a Small Long Index Trade via a Spreadbet.
Now we have the Weekly Candles for the DOW - my sort of Ellipse thing is highlighting a Big White Up Candle from last Week - that is Bullish and suggests more upside here.
We have now completed November (thank goodness I am sure many will say !!) so the Monthly Candlesticks below are valid. My Arrow is pointing to a Doji Candle from November and after the Down Candle of October this is mildly positive I would say although a Doji of this sort with just equal Long Tails is not really a Reversal Candle in the sense that a Hammer or similar would be and the context is weak because really you would want a lot of Down Candles beforehand. What is clear though is that Support where my Red Line is around 24000 is important and just below that where my Blue Line is, we have Support around 23500.
Now we have the Daily Candles with the Pink Zone showing the Upper and Lower Bollinger Bands which are based on Standard Deviations (whatever that is) - anyway, as with any of these Technical Indicators you don’t need to know how they are calculated - what matters is learning how to interpret them and learning how predictive they are and how reliable in their signalling. And always remember to ‘Keep it simple’.
My Arrow is pointing to the Top Bollinger Band and this is at about 25800 and this could act as Resistance in the short term. However, the Price can often move up with the Bollinger Band and ‘hug’ it. The Bands can be useful for setting Targets though.
The Nasdaq Comp and the S&P500 are very similar to the DOW so I won’t dissect them this Week.
FTSE100 Don’t look too closely at this one because all I am focused on here are those Red Lines which form an Uptrend Channel - that is nicely in force and while we stay in that Range there is not a huge amount to panic about in terms of the Longer Term.
Here I have zoomed in on the Daily Candles a bit but it is still quite ‘high-level’ in terms of what I am trying to show. The main thing here is the Range between my Horizontal Blue Line down at about 6860 and the Horizontal Red Line at 7200 (where the Black Arrows are). We are wiggling around in this Range and only if it falls below 6860 (and really 6850 as it is more of a psychological round number) should we get panicking and if it goes above 7200 then Santa is bringing us a nice Xmas Gift to end a dismal Year.
I am stating the bleedin’ obvious here but if it Breaks down then you Short the FTSE100 and if it Breaks upwards then you go Long.
I spotted this some Days ago and I wanted to show it on my Charts this Week. I have used the Bollinger Band Chart but you can ignore that because what I really want to show is a Diamond Pattern that seems to have formed up - it is not perfect and I am not totally sure of the implications but I assume it works like Triangles do and if it Breaks down then we are in the merde but if it Breaks up then that is positive - in any case the Range I showed before is probably a better Indicator.
I know many of the more expert Technical People use Diamonds a lot but I don’t really know much about the significance of them. I hear they are a ‘Girl’s best friend’ though.
Please ignore most of the ‘Noise’ on this Chart - what I am really trying to show is the 13 and 21 Day EMA Lines and where my Red Arrow is we had a ‘Bearish Cross’ which is still in force and where my Blue Arrow is the EMA Lines are sort of parallel so we need the faster 13 Day Line to put an upwards spurt on and do a Bullish Cross. When that happens, it could tie in with a Breakout over 7200 and that would be a cracking setup to go Long on the FTSE100.
Having said that there is no doubt risk around the Brexit Vote so that needs to be weighed up. Maybe if the US Indexes go Bullish on the 13/21 Day EMAs then they would be better to go Long on.
Finally on the FTSE100 we have the Monthly Candlesticks. My Blue Arrow is pointing to a Doji Candle for November and after the Drop in October this could be a Reversal Candle although it is perhaps more likely a ‘Continuation’ Candle which means the trend downwards could continue. It is not decisive but the Key is the Red Support Line at 6860 as I have mentioned before.
Again the FTSE250 is largely similar to the FTSE100 so I won’t show it as I am running late. Anyway, here is an interesting Chart for you……
Hostelworld HSW I think I mentioned HSW a few Weeks ago but things have moved on nicely now and technically this is a very interesting Chart. My Blue Arrow is showing where we had a Strong move Up on Friday and it looks like the Downtrend that has been capped by my Red Line for Months and Months has finally broken and things should improve from here. Which is nice to see because I hold the goddamned thing.
On the next Chart we have the 13 and 21 Day EMAs - my Arrow is pointing to where we are very near a Bullish Cross - if we get it (and it looks highly likely) then this would suggest Gains in the Weeks ahead.
I just noticed this one as well. This is the Monthly Candles for HSW and this is a beautiful textbook example of a Hammer and the context is superb. My Arrow is showing the Hammer from November which follows Months and Months and Months of Black Candles where the Price of HSW fell - there is a strong likelihood it can rise from here.
OK, I gotta end it here, have a great Week everyone, Cheers, WD.
1 Comment
Paul Hunt
12/3/2018 03:41:24 am
Hi Pete, spot on as ever. Psychology is the key word. Have your system and don't be blown off course,
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