I got a bit delayed by the World Superbikes so this won’t be hugely lengthy.
I was looking at this week’s Investors Chronicle and they have 10 pages on the Bear Market etc. and in amongst this they had 7 Charts showing recent Bear Markets for the FTSE All Share - and what struck me was that in every single case they had a ‘V’ Shape between 2 distinct Price Channels - first one a Downtrend followed by an Uptrend.
11. I become a buyer as soon as a stock makes a new high on its movement after having had a normal reaction.
I think Jesse is saying here that if you have a Stock in an Uptrend which has just made a New High and then pulls back in a sort of typical (normal, usual) fashion, then when it starts moving up again and takes out the previous High, then he buys it. This reminds me hugely of the methods that @Stealthsurf (www.tradingbases.co.uk) uses when buying All Time High (ATH) Breakouts. I tend to perhaps take on a bit more Risk and if I am faced with a Stock in a clear Uptrend Channel, which crucially also stacks up on Fundamentals and Valuation, then I am happy to buy it as it comes up off the Bottom Line of the Uptrend - provided I have decent Candlesticks and RSI, MACD etc., to support the move. I am not averse to buying just after a Breakout from a high - but I probably do the ‘off the bottom line’ method more often.
I am running behind today so time is short - on that basis I will go straight into the Charts that matter.
The ShareScope ScreenShot below shows the FTSE100 Daily Candlesticks for roughly the last year.
First thing to notice is where my Big Red Arrow is pointing to the Red Downtrend Line - this is dominating this chart and acting as huge Resistance to the Price moving higher.
A while back @Chrissayce sent round on Twitter a list of Jesse Livermore’s Trading Rules - these are clearly intended for Stockmarket Players with a ‘Trader’ mindset rather than that of an ‘Investor’, but I wondered how they related to how I go about things. In addition, are there insights here that I can learn from and possibly incorporate more in how I do stuff?
It’s Sunday Night on Valentine’s Day and Heart Radio (the only channel that gets decent reception and is just about bearable) played Leona Lewis ‘Bleeding love’ earlier - which made me think of how I have been Bleeding Cash this year……..
It really has been a shocking start to the year - already I am down about 11% on my Exposure and that includes selling some stuff and having some Big Hedges - but sadly I took this action too late and a lot of damage had already been done. With such a poor start, it really feels to me like this is a ‘Damage Limitation’ and ‘Capital Preservation’ kind of year and any dreams of making 20% + Profit for the Year are pretty much distant memories.
This came round on Twitter yesterday and I thought it was utterly brilliant and something worth thinking about and understanding if we want to survive the current Nasty Markets. I say this is a “2 minute Blog“, but take your time and think about the messages here - they are bang on the money. It uses the word ‘Trader’ but equally applies to Long Term Investors and it is worth taking heed.
It’s Sunday Night again and I feel a need to check out the Charts and get a feel of where the Markets are going. It was pretty clear to me by the end of last week that another push down looks very likely and I am happy to have some chunky Short Positions in place to Hedge out the majority of any downside if it comes.
I won’t stand on ceremonies, let’s crack on with the Charts - loads to get through as I am particularly intrigued by developments on the Gold Chart.
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On Tuesday 2nd February I dragged my sorry Butt up to Islington for the Shares Magazine / Cenkos ‘Innovators and Investors’ Conference which is something they have been running for several years now. I find it is quite a limited event in that there are not all that many Companies attending but in a way that is a good thing as it is easy to whittle down the ones I want to speak to and I can focus my efforts on them. A big danger in Investing arises from the classic ‘Too much choice’ problem.
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