I’m starting this Blog really late tonight after quite a boozy night last night and getting up late and just letting time run away really, so I will need to whip through it pretty pronto. On top of that, I am suffering more than my usual handicaps as I have a huge and unwieldy bandage on my middle finger on my right hand and every time I try to type a y it actually produces yk, it is quite irritating !!
And I am struggling to see anything because I have tears of sadness in my eyes which I suspect is from seeing my beloved BMW Z3 go to a new owner yesterday – or then again, it might be because later this week I will turn 55 which is truly terrifying or maybe it is simply because my Stocks were down a bit last week !!
We’ve obviously been due some sort of pullback and perhaps we got a bit of the start of it last week but it is not a clear cut picture. I will go through the Charts of the Indexes later and see if we can spot any clues, but for now although things seem super-Toppy, it is not guaranteed that a drop is imminent. The Markets would have the perfect ‘excuse’ to drop back with all this Virus panic and perhaps we will get some more drama next week. Personally I can’t get excited about the Virus and I have seen this sort of thing so many times and it is usually totally overblown and as things stand I see no reason to think this Corona thing is any different.
I believe the Bank of England is meeting this coming week with regards to setting Interest Rates and there has been quite a bit of talk about a possible Rate cut. Much of this is probably priced in already but at the time of announcing the decision there is usually a Press Conference or something and what is said there can have an impact. For Long-term Investors this is mainly a lot of noise but it will be interesting to see what comes out of it. I have been talking and writing a fair bit about the potential for a Bubble in Stocks and it is exactly this rate-cutting and stimulus by Central Banks which I think could be the fuel to inflate up such a Balloon. Brand New and Bubbly Podcast On the subject of a possible Bubble, I spoke quite a bit about it on the latest TPI Podcast which we released a day or so back. We have started putting Numbers in the File Name for the Podcasts and this latest one is Number 15.2 and you can find it here on SoundCloud or if you use Apple or Audioboom, go to the ‘Conkers Corner’ Channel and you should find it there: https://soundcloud.com/user-479955511/conkers3-wheeliedealer-152-market-bubbles-high-pe-stocks-gaw-fevr-amzn-googl-mpac-1 If you ‘subscribe’ to the TPI Podcasts then every time a new one comes out the Podcast Platform should highlight it to you. Last Week As I already mentioned my Portfolio took a little hit last week and dropped back 1.1% which of course isn’t too severe although maybe it was flattered by a strong bounce on Friday which sort of made things look a lot prettier than they were by the Close on Thursday. We have had an extremely strong run up through December and into 2020 so it is probably overdue that we give a bit back. I don’t think I did a huge amount in terms of trading or anything last week although I did buy a bit of Hipgnosis Songs Fund SONG which I think is quite an interesting Stock and mostly unlike anything else that is about. It has a Dividend around 4.5% expected and I think that is likely to rise over time and it should be quite a boring and ‘Steady Eddie’ kind of thing. I have considered it for my Income Portfolio as well and perhaps I will pick up more there. My thinking is to do a detailed ‘Buy Rationale’ blog on it and perhaps in the process of doing that I can increase my conviction and that will inspire me to buy some more. As usual the details are on the ‘Trades’ page. I don’t foresee myself doing much in coming weeks especially as I think a Correction of some sort could be imminent. If anything I will be looking to Short an Index (probably the S&P500) although I will keep any Hedge very small as this time of year is always quite buoyant and I think it is highly likely that any Pullback will get soon bought and driven up again. Perhaps as we get to the Spring with March and April we will see more of a drop which is a fairly typical seasonal pattern. At least by then I might have my ‘new’ Mazda MX5 which should cheer me up even if the Markets are tanking !! Blog Slate I have been busy with all sorts of things lately and finding time to work on blogs has been quite a challenge and often I only have a short window of time like an hour or something and I find it hard to really get stuck into them especially if they need some serious thought. Last week I took advantage of a Guest Blog about Live Company Group LVCG but this did buy me time to work on the detailed blog about why I think a Bubble is an increasing probability and also it includes some possible early evidence that a Bubble is starting. I am pleased with the progress I have made on that but there is still a lot to do and it might be that I break it into 2 parts and if so the first part will be issued later in the coming week. After that I would love to write a blog on SONG and perhaps I will prioritise that one. I have loads of other ideas on blogs I want to write so if I don’t get distracted too much I should be able to keep the flow going. And we will need to be recording some new Podcasts soon as well. No peace for the Wicked Wheelie !! A Golden Mouldie from the Archives This is a 3-Parter about ‘Noise’ and its harmful effects on our psychology and you can find links to parts 1 & 2 at the bottom of this one: https://wheeliedealer.weebly.com/educational-blogs/enjoy-the-silence-cut-out-the-noise-part-3-of-3 Needless to say, after more than 5 years of me scribbling blogs there are loads of things like this in the Archives which might help you with your Investing activities – if you go to the ‘Blog Index List’ which sits on WD2 then you should see the full list with links. UK Investor Show **IT LOOKS LIKE I WILL NOT ATTEND THIS SHOW ALTHOUGH I HAVE YET TO CONFIRM THE ALTERNATIVE SOCIAL ENGAGEMENT I MIGHT HAVE. I WILL MOST LIKELY BE AT MASTER INVESTOR THOUGH AND ALSO AT THE SHARES/CENKOS TECH EVENT** 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). Better do those Charts I promised then. S&P500 As is the tradition, all the Charts I show are ScreenGrabs from SharePad and if you click them then the images should get bigger in your browser so you can see more detail. First up we have the Weekly Candlesticks for the S&P500 and my Blue Arrow is pointing at a small Black Candle from last week and note how it is ‘inside’ the Candle from the week before and this tells me to be wary and that if we get a Down Candle at the end of the coming week, then that would complete a Bearish 3-Candle Pattern. Irrespective of this, the combination of the 2 Candles pointed at by my Blue Arrow do look a bit troublesome, and a sort of ‘Bearish Harami’.
The next screen has one of my favourite Indicators and this is the interaction of the Black 13 Day Exponential Moving Average (EMA) Line and the Red 21 Day EMA. On the Chart below where the Blue Arrow is we had a ‘Bull Cross’ between these 2 EMAs and that is still in force as we speak. We need to watch out for a ‘Bear Cross’ (like where my Black Arrow is) and if that happens there could be some weakness ahead.
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 72 where my Black Arrow is, this Index is still very over-bought.
The Screen below has the Daily Candles for the S&P500 and the Pink Zone marks the Upper and Lower Bollinger Bands. My Black Arrow is pointing at a Big Down Candle from Friday and clearly this is a sign of weakness. However, there is Support at the bottom Bollinger Band at about 3260 and if we drop below this, then my Black Ellipse is highlighting a Zone of Support that should kick-in, down towards 3200. If that fails, there is Support around 3150.
FTSE100
The Chart below has the Weekly Candles for the FTSE100. My Blue Arrow is pointing at a Down Candle for last week and note it found Support at 7500 which is clearly an important level. To the upside, my Black Arrow is pointing to Resistance at 7727 and then my Black Ellipse to the left is highlighting a Zone of Resistance right up to the All Time High (ATH) at 7904. My hunch is that we will see 7904 taken out at some point in 2020 but that is purely guesswork really. It strikes me that the FTSE100 is going sideways at the moment mostly.
Next I am interested in the Black 13 Day EMA Line and the Red 21 Day EMA Line (by the way, the Candles here are Daily ones although on this Chart I am not that interested in them). Where my Red Arrow is the Lines seem to be moving together so we might get a ‘Bear Cross’ (like we had where my Blue Arrow is) – if so, that would predict weakness ahead.
In the bottom window on the Screen below we have the RSI for the Daily FTSE100. Where my Black Arrow is we have a Reading of RSI 54 – this is a ‘Neutral’ Reading and means we are not Overbought or Oversold in any way.
Last up we have the Daily Candles for the FTSE100 and the Pink Zone is marking the Bollinger Bands. My Blue Arrow is pointing to an Up Candle from Friday and note how this turned up from the bottom Bollinger Band. I would expect the FTSE100 to build on this Candle although the weakness in the US after the FTSE100 had closed might have an impact.
I still think there is a potential ‘Bull Flag’ going on here and my Red sort of Rectangle is trying to highlight a potential Flag Pole and the Red Ellipse is pointing out where the Flag bit is. Really a move over 7700 would suggest my Bull Flag theory is correct and we are going higher. OK, that’s it for tonight. Good luck in the coming week and don’t do anything I wouldn’t (which gives you plenty of scope for causing trouble !!). 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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