I’m feeling in a detached mood tonight and not sure how long this Blog will be or what it might contain. Most Readers will probably be aware that my Dad has been in Hospital for many weeks and has been fighting Prostate Cancer which has been spreading so obviously the clock was ticking.
As it happens he passed away last night which was sort of ironic because he had been desperate to return home and there had been all sorts of delays around getting carers to come in and tend to him. He finally got his wish and went home on Friday and I rang my brother Saturday night to find out how the move had gone and that was when I heard the news.
I feel ok about it all really - the over riding emotion is that of relief as I felt the situation was only going to end in one outcome and it was putting my Brother especially under a lot of stress and pressure. It is difficult for me to do much to help because of my own health issues (I am a paraplegic wheelchair user and nothing is particularly easy) and pretty much all the stress was on my brother with trying to balance hospital visits with work and regular trips between Bristol and Swindon. For myself I think the shock and tears happened about 2 months ago after I had a conversation with my Dad over the phone (he was as deaf as a brick so it involved much shouting !!) and it was clear to me then that a corner had been turned and in a way he had ‘given up’. He has had a constant refrain of “I’m 87 and have had a good knock and I’m not worried or anything” and clearly he knew there was no chance of him getting better.
The subsequent 2 months have been a chance for all of the Family (and obviously my Mum) to come to terms slowly with what was happening and we were all in agreement that we didn’t want him to suffer and there was no pretence that he was going to ever get better. As it turns out I don’t think he was in too much pain or anything and it is great that he got his wish of returning home - incredible timing by the old bugger.
I am not sure what this means for me updating the Website and doing Tweets and stuff - I can make no promises. To a large extent I am assuming I will want to keep as much of a sense of normality as I possibly can in the coming weeks but of course with the Funeral and stuff I don’t really know how this will affect my time or my levels of motivation to do anything. Thankfully with regard to the Markets we are in that final leg of the Year where not much will really be going on and I won’t be feeling any particular need to trade much. There is obviously never a good time for such monumental events of one’s life to take place but chances are the timing suits my day to day routine pretty well. I have mentioned a Stock blog I am working on but this might get delayed a bit - it shouldn’t matter too much as the Share Price is in a bit of a downtrend at the moment so it is not really the time to buy anyway - but I will do what I can to move it forwards towards publishing.
Anyway, just keeping you all in the picture, let’s move on to the Markets…..
According to the UK Stockmarket Alamanac 2016, the coming week (w/c 12th December 2016) has seen the FTSE100 up for 52% of Years with an Average Return of MINUS 0.1% - so history points to a flat week.
To give some more colour, the following 2 weeks around Xmas have been up for 81% of Years with an Average Return of 1.1% for w/c 19th December, and up for 74% of Years with an Average Return of 0.5% for w/c 26th December - so 2 strong weeks to come.
Big Picture first. The Chart below shows the long term chart since the 2009 Lows after the Credit Crunch and the Red Parallel Lines show the Uptrend Channel which ensued for most of the time since then. Note how at the current 6954 we are below that Uptrend Channel and it is critical that we get back inside it if the moves up are really going to continue. I think we need to get over about 7100 really or to be very certain I would like to see a Close over the recent All Time High at 7130. The end of December is usually quite bullish with a bit of a steady ‘melt-up’ particularly for the period around Xmas and New Year’s Day so that might be all that is needed to push it back into the Uptrend Channel. There was also news about non-Opec members agreeing to pump less Oil which might help push it higher.
Something to be aware of though is that this recent Rally has no ‘breadth’ - I have not looked deeply into this but I have seen it mentioned in various places that there are only a few Sectors (Resources, Oil, Banks etc.) driving things and this lack of Market Breadth might be a concern. In addition the FTSE100 has been very much driven by the Weakness of the Pound over 2016 and this could have a huge bearing on where things go particularly as we move into 2017. In 2016 we had big problems on the Markets in late January and February and it wouldn’t be a big surprise if we saw a repeat of this especially after a good run up. There is also the issue of the US Fed Interest Rates meeting this week (starts Tuesday for 2 days I think) which of course could have a big impact one way or another. Seems to me Markets are expecting a small Rate Rise but it’s probably the narrative around the Fed Statement and any hints on the speed of future Rate Hikes that will drive sentiment.
The Chart below (all screen-grabs from ShareScope as normal) has the Daily Candles for the FTSE100 and the Blue Wavy Bollinger Bands above and below the Price Line. Note where my Black Lined Circle is that the Price Candles for the last 3 days are above the Upper Bollinger Band - this is an unstable situation and I would expect the Price either to drop or to go sideways so that the Price comes back inside the Bands.
On the Chart below my Blue Arrow is pointing to where the Red Line 13 Day Exponential Moving Average (EMA) has just crossed the Green Line 21 Day EMA from underneath - this is a bullish sign and suggests we might see some weeks of gains to come. Note my Black Arrow where a similar crossover happened a few weeks back. You may need to click on the Chart picture to make it bigger so you can see the crossover.
The Chart below has the Weekly Candles for the FTSE100 - my small Black Arrow is pointing to a nice Big White Up Candle from last week -this is looking pretty bullish. Note Resistance up above at 7000, 7067, 7130 and of course a Breakout over 7130 would be a very Bullish development.
While proof reading this I have a Shania Twain concert from Las Vegas on the TV (not really watching it - there is a dearth of decent stuff on TV to watch tonight) and the crazy old bird just rode a flippin’ Horse onto the stage - it seems quite weird and I guess it makes a change from the blinged up Motorbike she rode on to the stage with first off.
That don't impress me much..........
The Chart below has the Weekly Candles for the DAX. I am pretty sure I showed this Chart last week and pointed out the importance of the Sideways Range marked by my Green Lines between 10092 and 10802. Following the ECB hitting the QE printing presses again, the DAX got all excited and leapt upwards out of the Range (as per my Black Arrow) - this looks bullish. Note there is considerable Resistance up above between about 11400 to 12400 which may prove a challenge to wade through.
The Chart below has Daily Candles on the DAX. I am focussing here on the Yellow Circle which shows a ‘Doji’ Candle which suggests that the Push up is weakening. It may rise a bit more, but the oomph of the Days after the Breakout have eased off.
The bottom window on the Screen below has the RSI (Relative Strength Index) for the DAX dailies. On a current reading of RSI 68 this is pretty high as you can see but it could go up a little bit more.
Dow Jones Industrials Index
There are some pretty amazing and unusual things going on with this Major US Index of 30 huge mega-cap stocks. I had a small Short on this Index last week but it got Stopped Out and thankfully that happened because I took a hit of around 100 points or something but the Stop saved me from the pain of an adverse move of another 500 points. Yes, I am truly a Stoploss Convert !!!
On the Chart below please ignore most of it but look down the bottom at the ‘Volume (Daily) - M’s’. My Yellow Circle is highlighting a huge spike in Volume in the last Week or so - I have no idea what this means - but it is something to note. Could it be loads of big Institutions doing some serious Buying in the belief of more gains to come or is it a ‘Blow-off Top’ where we have a final surge of late stage Buyers before a collapse? I have no idea……..
The screen below is amazing. In the bottom window we have the RSI for the Dow Daily - note the reading of RSI 80 - I bet it has rarely ever been this high in the whole of Stockmarket History - at best it implies the Dow needs to go Sideways or more likely we are due a proper Pullback.
Sterling vs. Dollar
The Chart below has the Daily Candles for the £/$. My Blue Arrow is pointing to a small Doji Candle from Friday which suggests that the move down of last week might be weakening now. This would be consistent with a larger Uptrend Channel which I have marked with the Blue Parallel Lines - this suggests last week’s move was a Pullback (Retracement) within a larger Uptrend Channel - if so it means the £ could continue to strengthen which would most likely hurt the FTSE100. Note there is a lot of Resistance just up above at 1.28 and if the £ can get over this level, then it would be back inside the Higher Range between about 1.28 to 1.35.
Note in the bottom window on the Chart below how the S&P500 (a wider Index for the US with 500 Stocks in it) has had a similar Volume Spike as the Dow Jones Industrials.
Brent Oil (Spot)
The Chart below has the Weekly Candlesticks for Brent Oil (Spot) and this is similar to a Chart I showed last week. Note the Triangle between the Green Line and the Black Line - it looks to me like it will be squeezed out of the top of the Triangle at the Black Line and it is quite likely the Non-Opec Production Cuts agreed in recent days could trigger such a move up. If it can breakout higher, then we might see $60 soon but there is very strong Resistance up above to about $70. My Big Green Circle highlights where all this Resistance emanates from.
Note where my Blue Arrow is pointing there is a nice ‘Spinning Top’ Doji which was produced Last Week - this suggests the move up in recent weeks is waning and perhaps we won’t see the Breakout - only time will tell !!
The Chart below has the Daily Candles for Gold (Spot). My Black Arrow at the bottom is pointing to a Red Down Candle from Friday - this looks pretty weak but note it managed to stay above the Support Line at $1156. As long as that Line holds, there is hope for Gold Bulls - it is fails, expect a lot lower maybe down to $1100.
In the bottom window below we have the RSI for Gold Dailies - on a reading of RSI 28 it is still very low. Yes, it can go lower, but probabilities are against that.
The weakness in Gold is rather strange - in a World of Uncertainty and much talk about Inflation, you would think Gold would do well. However, Chris Dillow in Investors Chronicle this week points out that even though these views are valid, they are probably trumped (bad choice of word) by rising Interest Rates and Bond Yields which makes Gold less attractive to hold (it costs money to store Gold and it has no yield itself) and Dollar Strength is not something Gold likes.
Right, that’s it for now, have a good week,
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