I am starting this one on Saturday Evening because I intend to nip down to Swindon tomorrow to meet up with my brother who I have not seen since all this Lockdown silliness started. Hopefully I can get it all done tonight, but there are some very interesting Charts and I really must do them justice.
I had a really pleasant afternoon yesterday (and made even better when I got home and saw that my Portfolio was up nicely !!) as I finally got around to visiting the White Hart in Winkfield which is my usual haunt and of course it is where we hold the WheelieBash (more news on that in a tad).
Despite us being allowed to visit boozers for many weeks now, I have not been able to get around to visiting the White Hart due to various other demands on my time and I was more than a little worried that it might not even be open. So it was really good news to see the Landlord pull up next to me in the Car Park (I must say a Jaguar XF is a really strange Delivery van but he seemed to have crammed loads of crates of booze and various food items into it !!) and he told me that everything was fine and that they had used the Lockdown time to redecorate the whole pub and all the usual Staff were there and apparently trade was nearly back to ‘normal’. I suspect having a huge and pleasant garden has really helped them.
So it is more than reasonable to assume that I will be attending the White Hart as much as I can during the remaining Summer weeks. WheelieBash 2020 Part of my joyous visit to the White Hart at Winkfield involved a chat with Phil the Landlord about what we could do for the WheelieBash this year, in light of all the Lockdown Rules etc. Fortunately, we will be able to do something but numbers have to be restricted to 30 in case the weather is unusually dodgy and we are all forced inside where of course ‘Social Distancing’ is harder to do. At the time of typing this about half the places have already been taken so if you want to come then you must be rapid – the best way is to DM me on Twitter or to send me an email at [email protected]. Oh, I am sure it would help if you knew the date and we are going for Saturday 5th September. You can see more about the White Hart here: https://www.thewhitehartwinkfield.co.uk/ As usual attendance is FREE and you just need to rock up when you like (I will probably get there about 12 noon ish) and you can stay as long as you fancy. We tend to get a great crowd with a total mixture of ages and skill levels and Newbies in particular will feel right at home and no one judges anybody or anything like that - it is a superb atmosphere of like-minded people who are all trying to do their best to take on the Markets and extract some dosh out of them. It is very much a shared endeavour and an almost unique opportunity to meet up with many outstanding Investors and Traders who are more than willing to share their knowledge and experience. The White Hart is not far round the corner from Legoland and not far from the centre of Windsor and there are Hotels in many nearby locations even in good old Slough, and in previous years several people have travelled from far-flung places and made a weekend of it. There is a Car Park at the back of the Pub but it is pretty small really and has a horribly tight passageway to get to it. You might be able to park across the road in front of the Church and I am sure you can park further into Winkfield village. If you go to the ‘Events’ page which is somewhere on my websites (I think it is on WD2 so you should be able to find it from the Dropdown Menu up above this Blog you are reading) you can see pics from WheelieBashes of previous years and I am sure that even with the limitations that we must follow, it will still be a very worthwhile and fun event. Twin Petes Investing Podcast TPI 28 We had a slight change of plan this week and instead of recording a fresh new one like we were going to, Listeners have the bonus of receiving the chance to hear the recording of the ‘TPI Live’ session we did for Mello Virtual a few weeks ago. I suspect many who attended Mello Virtual will have heard it but there was a lot of stuff available over those 2 days and if you have not listened to it then here is your chance. For people who did not partake of Mello Virtual then this is a big bonus for you. You can hear it here via Soundcloud and of course it is on all the usual Platforms such as Apple, Spotify, Overcast and Audioboom under the ‘Conkers Corner’ Channel: https://soundcloud.com/user-479955511/conkers3-wheeliedealer-mellovirtual-live-no28-boo-amzn-nxt-rre-gaw-fdev-asc-ftse-100 Last Week Thanks to a very strong Friday for me where Pets at Home PETS jumped something crazy like 21% after a decent Update and a small Short I put on the FTSE100 on Thursday Night (see my ‘Trades’ page) went very nicely for me, I managed to gain 0.75% for the week and my Portfolio is down 6% for the year so far. In light of the circumstances and with Markets looking pretty weak, I am obviously very pleased with how the week turned out but I think we could be in for some tough times in the near future. No doubt I will go into this more when we get to the Charts stuff but a few days ago we had a very clear 13/21 Day EMA (Exponential Moving Average) ‘Bear Cross’ on the FTSE100 and these tend to be highly predictive; as long as you give them a few days to play out and they coincide with other Bearish (or Bullish in the case of a ‘Bull Cross’) Technical Analysis Signals. I got burnt recently where I ‘jumped the gun’ on a FTSE100 Short and as these things often go, if I had kept that Short Position then it would have come good for me as things have played out. However, I have learnt the hard way (and the expensive way !!) that ignoring Stoplosses is a very bad idea and my mistake was not in following my Stoploss Rules but in having a Position that was too big and also in moving too impatiently to get my Short on. I have written about this on the ‘Trades’ page I think and I also talked a lot about it on a recent Podcast. Anyway, I have mentioned many times in recent Weekend Blogs and certainly on the Tweets about how the Autumn (and in particular September) is often a tough time for the markets and it seems to me that we are going to see (and endure !!) that in 2020. Apart from the EMA Bear Crosses, we also have some extremely ugly Monthly Candlesticks and they have confirmed the Bearish hints that were given when the Candles formed up for June (which were ‘Bearish Shooting Stars’ in many cases). On the Fundamentals side things are lining up as well. There is no doubt that Covid19 Cases are rising in the UK and as a result there have been some Regional Lockdowns in recent days (up Norf), and also some ‘easing’ that the Government was intending to allow has been delayed (possibly for quite a while). It is pretty obvious that this is bad news for the UK Economy and for Government finances – both of which were already looking dire and in fact far worse than even the Credit Crunch which even now stuns me when I type that. The Credit Crunch was truly a devastating event for the Economy and of course it hammered the Markets. But to now have a situation that seems to dwarf the impact of this is truly quite astonishing. There is no doubt that much misery is going to be inflicted upon millions of people. And if we head over to Europe then it is the same story. We are seeing Cases rise in loads of Countries and this can only drag on Economies and this is especially the case for Southern European Countries that rely hugely on Tourism – which is pretty much dead its arse. I was watching EuroNews earlier today (yes, there really was nothing on the box worth wasting my time on !!) and they had a story about the Algarve in Portugal and how even ‘middle class’ people who previously had well paid and prestigious jobs in the Hospitality and Tourism industries, were now reliant on Food Charities – an utterly appalling situation and there is going to be so much misery as a result of all this. Stockmarkets have boomed really since the heavy selling back in March but the rally seems to be about to be severely tested. There has been a bit of a disconnect with the US where Tech Stocks have shot up and sort of distorted the picture (there is no doubt that Tech has helped the S&P500 be just a few percent off its all time highs), but it is most likely that if Europe sells off then the US will go down with it. OK, the US might drop a lot less but it will nonetheless fall I suspect. Some drops ahead would also make sense in light of the Gold rally. It has been a huge disconnect that Gold has been shooting up at the same time that Stocks have been strong – they really should be inverse to an extent. It is very probable that Gold is ‘right’ and that the Stockmarkets have got it mostly ‘wrong’. In the US we have just had news that the Republicans and Democrats have failed to agree on an extension to the $600 a week ‘Helicopter Money’ payments for everybody and this is pretty obviously a huge problem for the US Economy as these payments would have been just about keeping many people afloat. On top of that, there is massive uncertainly about the forthcoming Presidential Election and the most likely scenario of a Joe Biden win is probably not good for Stocks. So, with such a gloomy outlook I am obviously not likely to be buying anything. As I mentioned, I have a small Short on the FTSE100 and I am about 15% Hedged and I am very likely to take that up to 30% or perhaps a bit more if I see some more Bearish signs in the coming days. I will be cautious and patient but there is no doubt that this is no time for heroics. Blog Slate Last night I had a sudden rush of blood to the WheelieBrain and finally managed to get down on electronic ‘paper’ some thoughts I had had about a glitch with Long Term Buy & Hold (LTBH) that Readers really must be aware of. Depending on what I am up to this coming week, I suspect that one won’t get released until the week after, but if I can do it sooner then I will. On top of that I have loads of ideas for Blogs so no doubt there are plenty to come and I also have several in draft form now which won’t take much work to finish off. I am in the happy place of having now built up a bit of a backlog so I can be confident that I can keep a steady flow of new blogs coming. Unfortunately as a result of some health problems last year, I had used up my backlog of good drafts and I hate being in that position, so I am much happier now !! I think the plan might be to record a fresh new Podcast in the coming week but I tend to go along with whatever Peter C3 can fit in his extremely busy schedule. Luckily with the way we do them we can pretty much record something at the drop of a hat (no sarky comments about “it shows” thank you very much !!). If you haven’t seen it yet, I think it was at the start of last week that I completed the Blogs about Bango BGO and those should be found below the Blog you are reading now on the ‘Stocks & Markets Blog’ page. Digging in the Basement You may not have realised but the full list of WheelieBlogs that I have scribbled over the last 6+ years can be found on the ‘Blog Index List’ page and from that I bring you this blog about the amazing predictive power of Candlesticks; and in light of my comments about the Monthly Candles it is worth heeding what this is pointing out: https://wheeliedealer.weebly.com/educational-blogs/candle-power It is quite surprising to me that I wrote that back in 2015 as it seems so recent in my mind with regards to when I had the idea to write it. In light of my comments above about potentially some tough weeks ahead, many Readers might find a refresher on this useful and for newer Readers it is definitely worth acquainting yourself with: https://wheeliedealer.weebly.com/educational-blogs/taming-the-bear-how-i-handle-nasty-markets OK, let’s see what those Charts are warning us of then…….. FTSE100 As ever, the images I show are taken from the superb SharePad software I use and if you click on them they should get larger so you can see more detail. Below we have a very busy screen but there is a lot of crucial information here. Firstly, my Black Arrow is pointing to the ‘Bear Cross’ on the Black 13 Day EMA Line and the Red 21 Day EMA Line and this was the biggest signal I had that trouble could be ahead soon. My Green Arrow is pointing at a big Down Candle from Friday and this looks Bearish particularly because it was higher during the morning but then it fell away later which showed that the Bulls tried to create a bounce but they failed and the Bears took control. Note how the Candle from Friday Closed lower than the Hammer Candle which is in my Blue Ellipse. Note also that it is lower than the Hammer where my Blue Arrow is; so in both these instances Support has failed. A bit further down there is Support from another Hammer (arguably a Bullish Harami) at about 5650 from 14th May and my big Black Ellipse is trying to highlight a Zone of Support from around 5800 to 5400. Below this we went down to 4900 in the sell-off in March – my hunch now is that we won’t go this low, which would actually be a good thing if it happens as I anticipate. I may be very wrong and part of the reason I hedge is to protect me from a part of the damage my Long Portfolio will sustain if we keep falling.
Next we have the Monthly Candles for the FTSE100 and now that July is complete, we can be confident in the Signal we are getting. My Blue Arrow is pointing to the Shooting Star from June and if you look back in my Blogs you should see that I highlighted this as a problem some weeks ago.
The Signal from a Shooting Star is that a move up is about to turn down possibly – it is only when we get ‘Confirmation’ from the next Candle that we can be even more sure that the Signal is going to be ‘right’ (I have deliberately used Inverted Commas because no TA is ever 100% right but the probability here that it will turn out right is very high). In effect a Shooting Star is a Pivot Point. And sure enough, the Big Down Candle for July where my Red Arrow is, confirms the Bearish Shooting Star and it even has a fairly long ‘wick’ up above which emphasizes how Bulls have failed to take it higher.
Next up we have the Weekly Candles for the FTSE100 and my Blue Arrow is pointing at a Big Black Down Candle.
In the bottom window on the Screen below we have the RSI (Relative Strength Index) for the FTSE100 Weekly. On a Reading of RSI 42 where my Black Arrow is, this can obviously fall a lot more.
In the bottom window on the next one we have the RSI for the Daily for the FTSE100. On a Reading of RSI 38 this is heading down and can go a lot lower.
On the final FTSE100 Chart I will show tonight, we have the Daily Candles with the Pink Zone highlighting the Upper and Lower Bollinger Bands. Where my Red Arrow is the Price is ‘hugging’ the Lower Band down and this is not a state of affairs that can persist for long but it can do this for a while. This was clearly evident in the Sell-off back in March which you can see on the left of the Chart.
FTSE250
I won’t spend ages on the FTSE250, partly because to a large extent I would expect it to follow whatever the FTSE100 does, and if the mood goes very much ‘Risk off’ then we will see the FTSE250 fall. My Screen below has the Daily Candles for the FTSE250 and where my Blue Arrow is there was a Bear Cross on the Black 13 Day EMA Line and the Red 21 Day EMA Line. My Green Arrow is pointing to a Down Candle from Friday and it all looks quite similar to the FTSE100.
Next we have the Monthly Candles and again this has similarities to the FTSE100 although it is a bit better (that may not help us though !!). My Red Ellipse marks a Bearish Shooting Star just like on the FTSE100 for June and my Blue Arrow has a small Down Candle for July, but note how it was unable to hold the High of the month so really this is another Bearish Shooting Star………
DAX30
This is the German Index and on the Chart below where my Red Ellipse is, I am showing a Bearish Shooting Star for July. OK, this is a bit ‘behind’ the FTSE100 but nonetheless it is not a great sign.
Another ropey one for the DAX. This is the Weekly Candles and where my Blue Arrow is we have a big Down Candle which has Turned (Pivoted) down from a Bearish Shooting Star from the week before.
Finally for the DAX my Chart below has the Daily Candles and my Blue Arrow is pointing to how we have not (yet) had a Bear Cross between the Black 13 Day EMA and the Red 21 Day EMA Lines. That is something to watch for in coming days.
CAC40
This is the French Index and unlike the DAX, we have had a Bear Cross on the 13 and 21 Day EMAs and my Blue Arrow is pointing at it below.
On the Monthly for the CAC we have the same story with a Bearish Shooting Star for July as per my Red Ellipse.
DOW
On the Dow Jones Industrials Index in the US, we have a possible Bearish Shooting Star for July where my Black Arrow is below. It is not a great example but note the length of the Wick up above the Body of the Candle. However, my Red Ellipse is capturing a very clear Bearish Shooting Star for June and that is still casting a shadow…….
The Chart below for the DOW has the Daily Candles and my Blue Arrow is highlighting that we have not had a Bear Cross on the Black 13 Day and Red 21 Day EMA Lines here. Also it is interesting that the Candles for both Thursday and Friday last week both found Support at 26000.
S&P500
Like the DOW, the S&P500 has not done a Bear Cross on the 13 and 21 Day EMA Lines and on this evidence shown below, this is very much Bullish still.
The next Chart is really interesting because there are some useful learning points here. My Red Ellipse is pointing out a Bearish Shooting Star for June (like we saw on pretty much all the Indexes) but note where my Blue Arrow is that the Candle for July is a big White Up Candle and that it has Closed higher than the top of the Bearish Shooting Star, and that means that the Shooting Star now has no effect.
I suspect that the S&P500 is being artificially held up by the strength of the Tech components within it and for that reason we need to keep a good eye on the Nasdaq in coming Days and Weeks for any signs that a drop is coming there. OK, that’s it for tonight, good luck in the coming week and stay focused, calm and rational at all times. Cheers, WD.
4 Comments
Lee
8/2/2020 12:45:00 pm
Thanks for the insight. Discovered your site recently and really learning a lot from it. Appreciate your efforts.
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WheelieDealer
8/3/2020 01:51:06 pm
Hi Lee, thanks for taking the time to bang in a comment - much appreciated. Great to hear you are learning from my scribblings because that is the whole point of why I do it. Make sure you read my Tweets as well because I sling out loads of information via those every day as well,
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Lee
8/4/2020 11:09:35 am
Yep, got an alert set for your tweets :-) The 13/21 day EMA is a revelation. Just trying to get my head around all the different candle signals now!
WheelieDealer
8/5/2020 12:55:15 pm
Great to hear - I have Twitter set to 'Open DMs' so feel free to Direct Message me, Cheers 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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