Funny old business last week with a huge drop on Thursday with SuperMario’s mega QE (Quantitative Easing) and NIRP (Negative Interest Rate Policy) spooking the Markets into thinking the Eurozone was in dire Economic straits, followed by a huge Up Day on Friday when the Markets decided that the ‘Stimulus’ effect outweighed the Economic concerns - all very silly really.
My own view is that QE and NIRP are idiotic beyond belief and ultimately we are in for a serious Economic Shock - I will go into this more in coming Blogs no doubt as I have already written a draft one about NIRP and its likely consequences.
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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.
Introduction
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.
FTSE100 Triangle 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.
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:
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 WEBSITES. IF YOU COPY MY TRADES, YOU WILL PROBABLY LOSE MONEY.
Well, after a couple of really shocking Weeks, I am beginning to wonder where Santa has got to with his infamous Rally. I screwed up a treat by buying a FTSE100 Long Spreadbet back at 6389 and I have been nursing this whilst the Markets have been selling off big time. This is the catch in not using Stoplosses much - when trades go against you, it can hurt quite a lot. Luckily I made one good decision regarding that Trade and limited the size compared to what I was considering - had I done the larger size it might have got quite hairy !!
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.
As usual on a Sunday Night, I wanted to look at the Indexes and get a view on where things are most likely to go in coming Weeks. Obviously the horrific events in Paris on Friday could have an impact on the Markets, particularly the French CAC40 and perhaps the German DAX. However, because the attacks happened out of Market Hours and with a Weekend for reflection, we might not get the kind of panic selling which probably would occur if this kind of Terrorist attack occurred whilst Markets were open.
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 WEBSITES. IF YOU COPY MY TRADES, YOU WILL PROBABLY LOSE MONEY.
Earlier today I was talking to someone on Twitter about Quantum Pharma QP. which they were thinking of Buying. Anyway, as with all these things, the first action by me was to quickly go to my ADVFN Fone App (which is simply brilliant by the way, and FREE) and to have a look at the Chart - that is always a very simple way of screening things in or out for me. In simple terms, I want to buy Stocks in Uptrends.
It’s Sunday Night again and I need to getting thinking about what is going on with these Markets - particularly the FTSE100 because I have about 45% of my Long Portfolio Exposure offset by Short Hedges (please see my ‘Trades’ Page for more details).
I got a bit spooked this afternoon whilst flicking through Last Week’s Investors Chronicle because Nicole Elliott ‘The Trader’ was being right Bearish again and talking about ‘Rolling Tops’ and stuff and I think she might have a point. My concern is that if we are going into a proper Bear Market where stuff just falls and falls over maybe 6 months, then the Strategy to address making money will need to be dramatically different. In essence, Buying Stocks will be off the table and Shorting Indexes will be the name of the game and probably shorting individual Stocks as well. I might even sell a lot of Stocks and move into Cash to a large degree.
I was just watching Channel 4 News with them going on about some or other terrible thing that is happening in the World, when something that has been playing on my mind hit me as an idea for a hopefully very quick Blog. Of course, once I actually started bashing it out (this is after starting the Netbook - coal fired, doing the Virus Scan, opening ShareScope, updating ShareScope data, opening MS Works etc. - you get the picture), I found that my very simple idea of one Chart and some words has morphed into 4 Charts and probably a shed load more narrative. To be frank, my original idea was a bit too skimpy and it clearly needed a bit more to give some sensible context for you Reader types.
This Blog is in essence about a possible Short FTSE100 Position which I considered placing on the night of Thursday 17th September 2015, when the S&P500 was screaming at me that it was a good time to put a Short on. |
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