This has been such an unusual Year with what are normally some of the best Months being so poor. After such a miserable start I was extremely pleased to recover 1.3% across my Portfolio last Week (this is UK and Spreadbets and my 2 Overseas Unit Trusts) and as a result I am now down just under 1.0% for 2018 so far and I am using all my Lucky Charms to try to get back into Positive Territory very soon. I guess if I just leave my Portfolio alone and resist the urge to tinker with it I will have much more chance of achieving this !!
On that sentiment, I mentioned a few Days ago on Twitter how I had done one of my rare checks on my iWeb Income Portfolio and was rather pleased to see it was up something like 1.7% on 2018 so far - I was really surprised by this and it is a bit worrying that the Portfolio which gets no love and attention from me (in fact, I have done no Trades in that Portfolio this Year so far) is up in a difficult Year whereas the Portfolios I put considerable effort into are down !! Oh the irony !!
I guess it shows some sort of Defensiveness in my Income Portfolio (you can see full details of it under my ‘Portfolios’ page) which perhaps makes sense with it mostly being made up of FTSE100 Stocks and the ones that aren’t of this size are still a bit Defensive in their nature. I reckon the Pharma Stocks AZN and GSK have done quite well in 2018 so far along with IGG and RMG but on the flipside TEP had a terrible day on Friday after a Broker Downgrade by Peel Hunt and HSBA has been awful as well. The other positive factor is of course the constant drip, drip, drip of Dividend Payments and I suspect that has really helped.
It is an interesting experiment though and if you click on the Blog ‘Category’ ‘Income Portfolio’ then you should find a Series of Blogs I wrote about how to Set-up and Manage an Income Portfolio in the way I do.
Anyway, at long last (although even today has not been all that impressive !!), we are on the cusp of some decent Weather and perhaps Summer is starting to pick up steam. That is great in so many ways but of course in terms of the Stockmarket it is not particularly welcome as Markets tend to be pretty stagnant over the Summer Months - but after such a poor start to 2018 maybe it won’t be quite as bad as usual - who knows?
Of course we had some pretty limited Military Action on Syria over the Weekend and I doubt this will escalate to anything much bigger. It looks like it will cause some Political Games in the UK Parliament but with the Tories whipping their MPs it is highly unlikely that the Government is at risk and a ‘No-Confidence’ Vote would be needed anyway and the Government would win that easily because the DUP utterly detest Corbyn (as they should).
So my Strategy is pretty much ‘Keep Calm and Carry On’ - I see no need for anything drastic and I am not keen to increase my Exposure but equally I am not desperate to reduce it much. I have a few Dogs I would like to get rid of but I am being patient and biding my time for a good Exit. As always I will be tracking the Indexes carefully and if I see the need to get Hedging then I will do so. I will go into the Index Charts in a bit but I did get the sense last Week that they might be on the move up again - if I get a good Buy Signal, then I might put a Small Long Spreadbet on some sort of Index next Week.
A dodgy Video from my Dim and Distant past……
Before starting the whole WD thing I was already a major TV Personality as you will see from this clip from ‘Top Gear’ many years ago - fast forward it to about 35.30 Minutes in:
Moving swiftly on………..
UK Investor Show
If you have stopped laughing now and regained your composure, I will be at the UK Investor Show at the Queen Elizabeth Conference Centre in Westminster this coming Saturday 21st April. Traffic permitting I should get there about 12 Noon ish and I will go to the sort of small Coffee/Canteen/Restaurant bit near the Front of the Building - it is on your Right as you go in the Front Door. I am easy to spot so come and have a chat - I expect to be around there for most of the day.
If you have not sorted tickets for UK Investor yet, then you can get them via this Website which gives you all the details:
I issued Part 3 of the ‘Index Trading Blogs’ this Week and that was the one with the Practical Examples with Charts and stuff in it. I have a Conclusion pretty much written but it needs some tweaks and my aim is to get that out this coming Week but I am pretty busy (I expect to be in the PUB all day Thursday !!). If I cannot get that Blog out then I have a few options with some fairly complete Drafts that I should be able to tweak quickly and get out.
Last Night I wrote three-quarters of a Draft on a Blog about why most Macroeconmic and Political stuff is just ‘Noise’ and how to get around this problem but that one needs a lot more work. It is quite relevant to the Index Trading Blogs though so despite it not being part of that Series I do want to get it out and Published quite soon.
If you skip to the ‘Changes List’ on the Homepage you should see that I updated the ‘Little Black Book’ on the WheelieBin page with loads of new Ideas for Stocks which need digging into thoroughly and I also put a Link to the Second Video Tamzin and Tim of piworld.co.uk recorded with me and also there are some details of the Duxford ‘Meet-up’ on Monday 25th June - come along and join us.
A Trip down Memory Lane……..
At the last minute I remembered to sling this Section in. This week I bring you the ancient Blog from the Archive below which may bring back some terrible flashbacks for many of you:
I see it contains several Links - I cannot promise if these still work or not !!
OK, enough waffling, let’s check them Charts……..
This one is quite similar to one I showed last Week I think. This has the Daily Candlesticks for the Dow Jones Industrial Average which comprises just 30 huge Megacap US Stocks but it is probably the most focused on Index in the World and therefore always important to look at. I think we are getting into US ‘Earnings Season’ now so perhaps that will cause some chopping about.
The Key Thing here is that Green Downtrend Line marked by my Green Arrow - as per the Text Box, if the Price ‘Breaks-out’ to the Upside through this Green Line then that is Bullish Behaviour and suggests the Price will go higher. However, if you look where my Yellow Circle is, you will see that we got a Breakout on Friday but note it created a Red Down Candle which might simply be a ‘False Breakout’ or an ‘Overshoot’ of the Breakout. Note also that the Candle from Friday hit the Blue Wiggly 50 Day Moving Average (pointed at with my Blue Arrow) and it pulled back Intraday - this shows the 50 Day MA is a Resistance Line and if the Breakout from the Green Line is to be cemented, then we need a nice strong Move up above the 50 Day MA.
Oh, as always my Charts are ScreenGrabs from the marvellous ShareScope Software I use and if you click on the Pictures they should get bigger so you can see more details.
As my Chart says in the Text Box, if the Price now drops back and falls down below the Horizontal Black Line which is the Base of the Triangle, then that would be very bad. Note also how the 200 Day Line which is pointed at with my Red Arrow has acted as decent Support.
In the bottom Window on the Screen below we have the RSI (Relative Strength Index) for the DOW Daily. On a Reading of RSI 49 it is pretty ‘Neutral’ and not Overbought or Oversold but what I want to show is the Green Uptrend Line marked by my Green Arrow. This is an interesting Line because it acts as Support on the RSI (you can use Trendlines and stuff on RSI Indicators just like on a ‘normal’ Chart) and if the RSI drops below this Line that would be bad (I guess in theory you could plot the RSI of the RSI Index !!!).
My Chart below has the Daily Candles for the DOW with the Blue Wiggly Bollinger Bands above and below. My Black Arrow is pointing to a Gap above where the Price is now - this implies there is room for the Price to keep moving up.
On the Chart below I am focused on the Red and Green Wobbly Lines which are the 13 Day and 21 Day Exponential Moving Averages (EMA) and where my Black Arrow is pointing it looks to me like the ‘faster’ Red Line is converging towards the ‘slower’ Green Line and if we get a Crossover here then that would be a Bullish Golden Cross and would imply more Gains in the coming Weeks - that would be a very sweet Signal and would make me more keen to place a Small Long Spreadbet on the DOW (although I might use the S&P500 - we will look at that in a tad).
Below we have the Weekly Candlesticks for the DOW and my Skinny Yellow Box is highlighting a ‘Long Tails Doji’ that was produced the Week before Last and I think I included this in my Charts Blog a Week ago and I probably said at that time how it could be a Turning Point for the DOW to move up from.
As it happens, where my Black Arrow is pointing, we had a White Up Candle last Week so the Doji was indeed a Turning Point. However, note the Candle last Week has a Long ‘Tail’ or ‘Wick’ above it and this shows it was unable to hold the Highs of the Week - a sign of weakness but not necessarily a disaster and of course the Pullback occurred on Friday before a Weekend when imminent Action against Syria was expected which would probably have put on some Selling Pressure as many Traders would not want to carry Long Positions over the Weekend.
Something I meant to mention earlier - look at the Darker Blue Wavy Line which is the 50 Day Moving Average and note how it is still falling down towards the Lighter Blue 200 Day Moving Average Line. This is a big concern - if the 50 keeps falling and drops down through the 200 then we get a Bearish ‘Death Cross’ and it implies Weeks and Months of trouble ahead. However, it is possible that we get some strength in the Markets now and this causes the 50 Day MA to stop falling and to Level-out before turning Up - in such a scenario we might get a Death Cross which is very quickly followed by a Bullish Golden Cross - for this to happen we need some serious positivity now.
The Chart below has the Daily Heiken Ashi Candles (totally different to ‘Normal’ Candles) and these things are superb because they give very clear Buy and Sell Signals - at the moment where my Green Circle is we have nice Big White Up Candles and this suggests more Gains early next Week.
I still don’t get these things but I keep looking at them trying to figure out how reliable they are at predicting things. Here is the Renko Chart for the DOW and where my Blue Arrow is pointing we have Black Up Blocks which seems to be Bullish !!
This is a much broader US Index with 500 Stocks in it which are quite large. Whereas the DOW seems to be impacted more by Oil and Resources stuff, the S&P500 seems to react much more to what the Tech Companies are doing and tracks the moves in the Nasdaq more.
It’s quite a simple Chart Set-up really - we have a bit of a Range going on with the Key Resistance up at 5680 from Friday and if the Price can move up above this in some style, then that would be a good Buy Signal and might encourage me to put a Small Long Spreadbet on (assuming other Indicators support this move). I prefer the S&P500 for Spreadbets because it is more fluid and liquid than the very limited DOW and of course the FTSE100 which is very skewed because it is not Equal-Weighted with the Top10 Stocks having a disproportionate impact to a major extent.
My Green Arrow is showing a Big Red Candle from Friday which is pretty similar to the one on the DOW that we looked at earlier. My Blue Arrow is pointing at the 200 Day Moving Average and I just want to make the comment that this is still rising which is a good sign for the S&P500 in the Medium Term - if there is trouble coming then the 200 Day MA would start to level-out and then turn down. The 200 Day MA is a Proxy for Major Trendlines and this suggests the Major Trend is still very much Up.
To the downside we have very good Support down at 2600 where the 200 Day MA is and then below this we have good Support at 2553 and then we have 2532 just below which I have put in a Red Text Box because it is extremely important. If 2532 fails then I think we are in the Poo (that is a Technical Term).
Note the 50 Day Moving Average (the Darker Blue Wavy Line with no Arrow) is falling like on the DOW but it is not so steep.
Other than that the Charts on the S&P500 are very similar to the ones I have shown on the DOW already.
There are some interesting and Bullish developments on this one although overall it is pretty similar to the DOW and S&P500. On my Chart below the main thing is the Horizontal Breakout above my Black Resistance Line (Black Arrow) at 7129. However, as per the DOW we got a Big Red Down Candle on Friday which is in my Yellow Circle and note again this hit Resistance at the Blue 50 Day MA Line (Blue Arrow but you should be able to spot this Line by now !!) and then fell back Intraday - so it is not conclusive although my hunch is we will go higher.
In the Bottom Window on the Screen below we have the MACD (Moving Average Convergence Divergence) for the Nasdaq Comp - where my Blue Arrows are look how we had a Bullish MACD Cross a couple of Days back and this suggests to me we could get more Gains in coming Days. My Blue Arrows are pointing at the different Formats for showing the MACD - the Histogram Bars higher up and the Signal Lines below.
Again the remaining Chart Indicators I use are very similar to the DOW and S&P500.
This one is quite interesting because despite a move up there is lots of Resistance up above now. First off my Yellow Circle highlights where the DAX Price Broke-out of the Red Downtrend Line (Red Arrow) and this was a Bullish Development. However, where my Black Arrow is pointing that is a bit of an ‘Inverted Hammer’ Doji and suggests the DAX may struggle to keep moving up. On top of this, where my Green Arrows are there is Resistance and this could be troublesome. Note also my Blue Arrow which is pointing to a Bearish ‘Death Cross’ between the 50 and 200 Day MAs - not good.
On the Screen below we have the Daily Candles for the DAX with the Wobbly Blue Bollinger Bands above and below. My Green Arrow is pointing to where the sort of Inverted Hammer Candle from Friday pulled back from near the Upper Bollinger Band - perhaps it is turning down off this Band.
The Chart below has the Daily Candles for the DAX but what I want to highlight is where my Black Arrow is we had a Bullish 13/21 Day EMA Golden Cross - I love these and that suggests gains to come in the next few Days/Weeks. It is very possible that we have a bit of a Pullback Monday/Tuesday perhaps but then move up again and this means the Predictive Power of the 13/21 Day EMA Golden Cross is upheld. However, it is possible that it turns down from here (although rare I find).
Below we have the Weekly Candles on the DAX. My Blue Arrow is pointing to a White Up Candle from Last Week which is quite good but note it does have Long ‘Tails’ or ‘Wicks’ above and below which shows a bit of indecision.
Although the US Indexes really call the tune for all other Global Indexes, it is the FTSE100 that dominates our UK Market, so this one is of course important for UK based Investors. Not much going on here really - it is a very simple picture. On my Chart below the main thing to notice is the Sideways Range between 7062 at the Bottom and 7326 at the Top - I have put these in Red Text Boxes so you can easily see them. As always, we need the Price to Breakout of the Range and if it Breaks to the Upside and smashes through 7326 that is really Bullish behaviour and if it drops and falls through 7062 then that is a bit concerning and the Strong Support down at 6866 will be really important.
My Green Circle is capturing some unusual Small Doji Candles which formed Last Week - in effect we had 3 Days of a very tight wiggle during the Day. I say it is “unusual” but maybe it is not all that rare lately - in fact, just the Week before we had a similar thing which is inside my Yellow Circle - and in that case it was a sort of ‘Bull Flag’ where the Price jumped up where the Big White Candle (the Flag Pole) is and then went Sideways to Consolidate for a bit and then Jumped up again. Maybe the Price Action last Week was a Sideways Consolidation also.
Note up above where my Blue Arrow is we had a nasty Bearish 50/200 Day MA Death Cross - we need the FTSE100 to move up fast now to negate the impact of this Death Cross or we face many Months of difficult Markets. Note also that the 200 Day MA has started to curve slowly down - this suggests a Major Downtrend could be coming (remember what I mentioned earlier on the S&P500 I think it was about that one being still in a Major Uptrend - this is very different).
In terms of Trades here, I would not go Long unless and until we get a Breakout above the 7326 Top Line and I would not go Short unless we break-down below the 6866 Level (although maybe there would be money to make Shorting at a Failure of 7062). If we do Breakout to the Upside, then Resistance at the 200 Day MA at 7400 would be another hurdle to get over.
Below we have the Bollinger Band Chart. Where my Yellow Circle is you should be able to see we are quite near the Upper Band - there is still room to go up and of course the Price can ‘Hug’ the Band Upwards but on the face of it the immediate Upside might be limited.
This is good. Like on the DAX my Blue Arrow is pointing to a Bullish Golden Cross between the 13 and 21 Day EMAs - this suggests more Gains in coming Weeks.
Sorry the Chart below is a bit messy - anyway, focus your attention on where my Red Arrow is pointing to a nice White Up Candle from Last Week - this one looks better than any of the other Indexes we have looked at on the Weekly Candles.
I want to close this Blog off now and the FTSE250 is largely similar to the FTSE100 and looks quite good. Anyway, I will show the Chart below which has the 13 and 21 Day EMA Lines and note how they are on the verge of a Bullish Golden Cross - we should get that tomorrow (Monday) - my Green Arrow is pointing at this.
OK, that’s it. Don’t go splitting your sides over that Top Gear Video - the NHS is under enough pressure as it is already.
Best of Luck for the coming Week and see you at UK Investor on Saturday,
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