I mentioned on the Tweets the other day how a General Election has the incredible ability to utterly change the Political backdrop for the Country in an instant and, goodness me, the result on Friday has done exactly that. At 9.59pm on Thursday Night there was a lot of trepidation and uncertainty with what the Election would bring about and almost in the blink of an eye the transformation was stonkingly off the scale. This Election result is truly seismic and totally changed the outlook for clearly 5 years; but more likely 10 years and it could be even more.
I used to be very much open to the idea of Proportional Representation but after the dire experiment we have had with a Hung Parliament for several years, it is pretty clear to me that sticking with ‘First past the Post’ is the way to keep things. This is because it is much more likely to throw up a clear result where a Governing Party can actually get on with the job and this brings Economic, Social and Political certainty and that is precisely what has been missing for recent years and we can safely say “Normal Service is Resumed”.
The big lesson here is how an extremely well thought-through and adeptly executed Political Strategy can bring about an Election result that blasts apart the Opposition and also set-ups the opportunity for the Tories to dominate for years and years in a way similar to what they achieved under Maggie Thatcher. Crucially, this time the Tories are back firmly in power with an Electorate within England & Wales that does not have the baggage of the Coal Mine closures and with a Prime Minister who is obsessed with being liked and highly likely to turn out to be a lot more Centre-Right than the usual suspects will proclaim in their ever more shrill voices as their Parties drift off into Political oblivion.
Thatch was always popular amongst the lower Working Classes as typified by ‘White Van Man’ but she could never capture the same demographic in the North because of the Mine issues. This time around, Boris is in a position to capture this enormous vote in the Northern Towns and he already has “borrowed” their vote mainly as a consequence of Labour’s London-centric stance on Brexit. However, it looks to me like it is a mistake to think that these Northern Voters have only temporarily shifted to Boris – the truth is that over many years the Tory ‘Ground campaign’ has been steadily building at the local level with more Councilors and suchlike and the simple fact is that Labour took the Voters for granted. It’s very much the same as what has happened in the US where huge swathes of the population ‘always’ vote for the Democrats and yet what good has it got them? The UK Labour Party is making exactly the same mistakes – they have shifted to being a Political Correctness and Identity Politics Cult and have totally gone away from the concerns, needs and desires of the Working Class who form what was formerly the Labour ‘Heartland’ and the ‘Red Wall’. The ‘normal’ people of the UK couldn’t give a monkey’s about Transgender Rights and Cultural Appropriation and such nonsense – what they want is decent Schools for their kids, efficient Hospitals for when they are sick and plenty of job opportunities and no potholes in the roads. Labour have totally failed on such issues and their ‘solutions’ are built on feeble foundations of ideological purity and envy. This whole thing about ‘Elites’ and the Eton sect and suchlike is totally irrelevant to the Voters on the ground and what they want is someone who is going to ‘have their back’ and stand up for them. Corbyn and the Loony Left proclaim to be for the Working Class and yet when it comes to something like the Leave Vote they insult the Voters (bit like Hillary’s “deplorables”) and actively work against their wishes. One of the most notable things I saw on all the political coverage after the Result was when an ex-Miner in Bollsover said that Dennis Skinner (the ‘Beast’) had been a very good MP but when he voted against ‘Leave’ that was when he was not representing what his Constituents wanted. The idea that ex-Miners could possibly vote Tory is utterly astonishing. It is worth noting though that on all the ‘Vox pops’ that I have seen on the TV News, none of them say they are Tories or voting for the Tories – what they all say is “I voted for Boris” and the reality is that they absolutely love him despite all the flak he takes form the Lefties and the Remain Establishment. It really won’t take an awful lot to cement these votes from Northern Towns for Boris for decades to come. They have been very poorly served by voting Labour all these years and they basically have nothing so if Boris just chucks them a crumb or two they are going to love him for life. This really shows what the Brexit Referendum result was all about – the people in many of these Towns feel totally abandoned by the Westminster mob and this was their way of making themselves heard and kicking back. It is why they are so angry about the Remain MPs actively trying to undermine the result of a democratic vote – they don’t have a lot and Politicians trying to steal their democratic right has been very dimly viewed. Anyway, I could write about this all night with the various angles and twists and turns and it has been truly fascinating. However, this completely changes the ‘terms of trade’ and now the Remain cause is dead as a dodo and the UK will be leaving the EU on the 31st of January. There will then be Trade Discussions for many months and it is quite possible that they get extended although it is unclear that they will need to be. However, if they do need extending, Boris will have no problem achieving this as with something like a 78 Seat Majority he is utterly invincible – both from the pathetic Opposition Parties and from the various factions within the Tory Party. And of course this time if anything does go slightly off the rails he can pin it all on the EU. I fully expect we will see a much more amenable EU now because part of their stubbornness and intransigence before was a deliberate policy (backed up by the various Remain elements from the UK Establishment who were constantly over in Brussels undermining Boris, and Theresa before him) in order to engineer a Second Referendum. Now the EU has a flatlining Economy and many difficult political issues and the last thing it needs is a bad relationship with the UK who it needs to sell its stuff to. This all means that Confidence will now return to the UK and we will soon lose our newly found reputation for utter incompetence and political drama. Politics if doing to go back to the inside pages of Snoozepapers and the constant headlines about what has been going on in Parliament will now vanish. And Gina Miller can go back into obscurity and the Supreme Court can hang up their wigs. So the backdrop for the UK Economy and for Stocks is very positive and I expect 2020 can be a decent year on the Markets. We will likely see the Pound strengthen and this might hold the FTSE100 back a bit but I suspect the FTSE250 and smaller Stocks can do very well and I will be positioning my Portfolio for that. I still have a small Short on the FTSE100 and a Small Long on the S&P500 and in the next few days I might Close my FTSE100 Short and go Long on the FTSE100 to try to catch a few quids out of the ‘Santa Rally’. This is probably going to happen and we usually get it in the quiet, dull, days from something like the 17th December on through the period from Xmas to New Year and a few days into January. It has an attractive psychological aspect to get my final Short closed and to head off into 2020 with a ‘clean slate’. And of course a useful side-effect of this Boris Landslide is that I can stop obsessing about Politics and being a complete Geek and I can get back to focusing on Stocks and Markets !! Last Week Well I’m really pleased because my Portfolio gained 2% on the Week and of course most of that came from Friday when the Markets went mental with a massive gain on loads of Stocks. This is particularly sweet for me because I have been getting nowhere all year due to my ‘Dumb’ Hedging but now I am back into Profit for the year and of course my Income Portfolio (which is not included in the 2%) has done very well. As a result I have actually made plenty of Cash this year and I don’t feel like I have taken on much Risk at all in what was a year where the potential for trouble was off the scale and I have been largely inactive. I did buy a couple of things last week – if you go to the ‘Trades’ page on WD1 then you will see full details but in essence I just picked up some Gately GTLY and some Team17 TM17, both of which I think can do very well for me with patience and I will probably be buying more of them. I did a count up of my Positions and I have 39 Stocks in the WD40 so I have a spare Slot and I will be looking at various things to plug this hole. I am in no rush and of course that is a high-class ‘problem’ for me to worry about in 2020 and I also want to do some work on my Income Portfolio in terms of introducing new Stocks. 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 issued Part 1 of a ‘Stock Idea’ Blog Mini-Series on Team17 TM17 a few days ago and I didn’t call it a ‘Buy Rationale’ because at that point I had not bought any TM17 but I was fully planning to. Anyway, I intend to publish Part 2 later this coming week although I haven’t even started it yet so I will have my work cut out. If I can’t manage it, I am sure I have a decent Draft of something else that I can lob out. We are getting to that time of the year when I need to do a ‘Scores on the Doors 2019’ Blog so that will probably get my attention once I have done the TM17 one. I am looking forwards to it perversely because there are loads of lessons that I have learnt in 2019 and I am without doubt at the top of my game and a far better Investor today than I have ever been in my life. Constantly learning is the name of the game so I am very pleased to be in this position and I feel ready for pretty much anything the Market chucks at me. Peter @Conkers3 and myself had tentatively agreed to record a new TPI Podcast on Friday afternoon but then I realised that I was going to be staying up late on Thursday Night for the Election so it was delayed. I expect we will record something later this week so there will be something in due course. I need to update the ‘Little Black Book’ and I have some more ‘Non-Finance Book’ Reviews to put out so I have plenty to keep me busy thank you very much. I just looked to my left and noticed I have a Blog Plan for a Blog about how to hold for the long-term so I must get on with that at some point as well !! From the depths of Political History…….. These are from July 2016 so a few years has gone by on these now. I am sure the content is still very much worth reading though and there are also plenty of links in them to other Blogs which you might find ideal reading over the Xmas period when no doubt the TV will be utter shi*te https://wheeliedealer.weebly.com/educational-blogs/pin-the-tail-on-the-monkey-musings-on-portfolio-management-part-1-of-2 https://wheeliedealer.weebly.com/educational-blogs/pin-the-tail-on-the-monkey-musings-on-portfolio-management-part-2-of-2 Better get charting our course then………. S&P500 As per normal, the Screens I show are taken from SharePad that I subscribe to and if you click on them then they should grow bigger so you can see some detail. First up it is the Weekly Candlesticks for the S&P500 and on this one my Blue Arrow is pointing to a reasonable Up Candle from last week which really suggests bullishness. Note that from the previous week we had a bit of a Bearish ‘Hanging Man’ Candle but the fact that it still managed to rise shows this was a false signal.
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 66 it is high but not extreme and I suspect this can go higher.
The next Chart is where I am really interested in the Black 13 Day Exponential Moving Average and the Red 21 Day EMA. My Blue Arrow points to where we had a ‘Bull Cross’ and this is still in force now which supports the idea that the S&P500 can keep climbing.
My final Chart for the S&P500 has the Daily Candles with the Pink Zone marking the Upper and Lower Bollinger Bands. Where my Black Arrow is we were treated to a ‘Long-Tails Doji’ on Friday which could be a Turning Point from which the S&P500 drops back. However, if this does happen, I would only anticipate a small drop and then we get moving up again. It is worth noting also that the Long Tails Doji is up at the top Bollinger Band which supports the idea of it easing back in the short term.
Pound vs US Dollar
This has been an important Currency ‘Cross’ in recent years and it has been quite an interesting one for several months now and after the big Boris Victory, it looks pretty good for more Pound recovery. My Red Line on the Chart below shows a Long-Term Resistance Line and a move through this would be very Bullish – if it happens. The obvious Level here is about 1.40 and then if you look at my Horizontal Green Line, there is more Resistance here at just under 1.44. A move above 1.44 would be immensely Bullish but don’t rule it out at some point in 2020.
Now we have the Weekly Candles for £/$ and where my Red Arrow is we saw the big jump up to 1.35 but note it fell back at the Close which suggests that 1.35 is going to take some effort to break above.
I wasn’t going to show any more on this one but at the last minute I noticed the RSI Readings and thought it was an interesting one. In the bottom window on the Screen below we have the RSI for the £/$ Daily and where my Black Ellipse is you can look over to the left and see that it was at a Reading up as high as it has ever got in the recent past. Last Week it peaked at RSI 83 and dropped back to RSI 76 but it is probably still ‘Overbought’ in the short term – so it may need to ease back a bit or perhaps go sideways to consolidate and unwind that Overboughtness.
FTSE100
First up then the Weekly Chart. My Blue Arrow is pointing to a Long Candle from last week with long ‘Tails’ which encapsulate a Range between 7137 at the bottom and 7429 at the top. Clearly we need the Price to breakout above those Highs and the key level here is about 7450 – if we get a Santa Rally then maybe that is the trigger. As I have been showing for many weeks, my Red Curve is an attempt to suggest a Bearish Rolling Top – so far it is sort of playing out but some strength could change that picture. With a rising Pound it would not be a surprise to see weakness in the FTSE100 but along with it, strength in the FTSE250 and Smaller Stocks.
Next up the Daily Candles but it’s the EMAs I am interested in. My Black Arrow is pointing towards a possible Bull Cross on the 13 and 21 Day EMA Lines. It might not happen if the FTSE100 is weak in coming days, but if we get the Cross it would be good news if you are Long.
Last Chart for the FTSE100 has the Daily Candles with the Pink Zone showing the Bollingers. My Blue Arrow is pointing at a Big White Up Candle from Friday but note how it fell back at the Close and stayed within the confines of the Upper Bollinger Band. As I keep mentioning, that Green Line marked by the Green Arrow is the key level we need to breakout of to the upside for the FTSE100 to make real progress. The Black Line at the bottom is critical Support at about 7000 which must hold.
Team17 TM17
You should be able to find the Blog I published about TM17 just below this one on the ‘Stocks & Markets Blog’ page on WD2. My first Chart is all about the Uptrend Channel marked by my Black Parallel Lines. The Green Line marks the Level I bought at.
I mentioned a lot on the Tweets that I was “stalking” TM17, although I didn’t directly name the Stock at that point (by the way, if you don’t follow me on Twitter you might be missing out as I talk about Stocks a lot although sadly too much political stuff in recent years !!). My Chart below zooms in on the Chart I just showed and my Red Ellipse is trying to show where I was stalking as the Price fell back each day and I could see it was at the bottom Uptrend Line but I waited for the result of the Election before pouncing. My Green Line is where I bought remember.
OK, that’s it for tonight – have a great week and don’t work too hard !! Happy Chrimbo, WD
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