It’s late on Sunday Afternoon and as usual I want to look at the Index Charts and see how things are shaping up. This is particularly key for me as I have a huge Short FTSE100 Position on to Hedge my Long Portfolio of Stocks and this has meant that while the Markets have rebounded strongly in the last week or so, I have not taken part in these gains as the Shorts have lost out. I am still of the view we are in a Bear Market and that 2016 will be a tough year for ‘Buy & Hold’ Investors so I am pretty sure I will be able to unwind the Shorts if we get further big falls and I see the usual April/May sort of time as being a big problem, particularly with the Brexit Vote due late this Summer.
Topiary Time - AKA All you ever wanted to know about Hedging but were afraid to ask
I HATE THIS BLOG. I DON’T THINK IT IS PARTICULARLY GOOD BUT I HAVE GOT TO THE POINT WHERE I CANNOT BEAR TO WORK ON IT ANY MORE. APOLOGIES TO READERS WHO WILL HAVE TO WADE THROUGH A LOT OF CRUD AND REPETITION TO REALLY FIND THE QUALITY HERE AND I REALISE IT IS WAY TOO LONG BUT I JUST CAN’T STAND WORKING ON IT ANYMORE (apologies for using the word ‘Bear’ as well……)
Markets are clearly pretty unpleasant at the moment if you are trading on the Long tack - we are officially in a Bear Market and the Trend is clearly down so it is easier to make money going Short and this Blog should help Readers think about how some very simple Shorting techniques can be applied to ‘Hedge’ a Long Portfolio. In other words it’s about positioning your Portfolio so that when the Markets fall your Short Positions offset the Losses on your Long Positions to some extent. This can have an extremely beneficial impact on your Returns for the Year.
After a pretty momentous week where the FTSE100 officially went into a ‘Bear Market’, I was pretty keen to look at the charts and see how things were shaping up and where Support is likely to kick in and what would need to be done to get out of the Bear Market.
It has always struck me that the definition of a Bear Market that is regularly bandied around of a ‘20% fall from the Peak’ is a bit silly and not all that helpful. My personal definition is a situation where Markets are so unhelpful that I find it very hard to make Money by going Long and it is far easier to make it on the Short side. Anyway, I was watching the BBC News or something reporting on the Market Drops this week and I saw a definition that was much more realistic - so I just looked with Google and came up with this:
Just a few Charts to clearly highlight the challenges facing the FTSE100 and S&P500. Developments here over the next week or so will tell us a lot about what is likely to happen in early 2016.
If you follow my Tweets you may have heard me mention a Triangle on the FTSE100. The Chart below from the wonderful ShareScope shows this Triangle with the Topline being the Red Downward Sloping Line from around the 7100 Peak last year and the Bottom Line is the Red Horizontal Line at 5900.
THIS IS NOT A TIP OR RECOMMENDATION. I AM NOT A TIPSTER. PLEASE DO YOUR OWN RESEARCH. PLEASE READ THE DISCLAIMER ON THE HOME PAGE OF MY WEBSITE. IF YOU COPY MY TRADES, YOU WILL PROBABLY LOSE MONEY.
Here’s something a bit different that I thought Readers might like to look at. A good friend has been investing for maybe 5 years and lately he has found things a bit hard going and wanted me to have a look over his Portfolio and give my views on what I thought of it. For obvious reasons he must stay anonymous but I am sure he is reading this - so ‘Thank You’ hugely from me and on behalf of Readers for letting me share this.
Well, after such a nasty week to start the year off, I think it is pretty crucial to look at the Indexes and get a feel for what the coming week is likely to bring us. Before we get stuck into the Charts, here are a couple of things from the UK Stockmarket Almanac 2016:
Scores on the Doors 2015
Sheesh, where did that year go? I vividly remember last year when I wrote ‘Scores on the Doors 2014’ after I had had my worst year for ages - typically just after I had started doing the WD Website and stuff and it was a pretty sobering experience (don’t worry, I have been on the Hobgoblin so I should be suitably squiffy to write tonight !!). It was a huge credit to so many of my Twitter Followers who were really understanding about my dire performance and I thank you all again for your continued faith in me.
Fortunately this year the SOTD is so much easier to write as overall my Performance has been very strong. However, before I get too cocky, my Spreadbet performance is frankly disgusting and I need to address this over 2016 - and I suppose I need to do this reasonably quickly. It annoys me because I am just peeing Cash down the drain that I could so easily be scooping up - it has costs me many £Thousands (if not more !!).
Welcome to my Educational Blog Page - I have another 'Stocks & Markets' Blog Page which you can access via a Button on the top of the Homepage.
Please see the Full Range of Book Ideas in Wheelie's Bookshop.