I’m in a right old grumpy mood today - hopefully it won’t show too much in this Blog !! I have no idea why this happened, although I was unable to sleep much last night which probably caused it, but I ended up oversleeping hugely and that means I am ridiculously late today and chasing my tail which I really hate. My intent had been to get up at a reasonable time and watch some of the MotoGP Qualifying from San Marino and I had set my Alarm on my Fone (does anyone have an Alarm Clock these days?) for 8.30am but when I woke up I had the horrible sense that something wasn’t right - you know, when the light in your bedroom seems unusual (because the Sun has moved a lot !!) and you just have this sense that it is later than you hope - and of course once I look at my Fone I see it is nearly 2pm and I just can’t believe it - total double-take and my Brain really struggled to compute the disaster.
So I missed the MotoGP apart form the middle class, Moto2, which was ok but watching that and eating my Lunch (which of course was now late) and then having to ‘get myself ready’ which being a paraplegic Wheelchair User involves absurd amounts of time in the bathroom and even getting dressed is a 20 minute experience, so before I know it the day has gone and it is well into evening and I have achieved utterly sod all. I wanted to have a look through the new copy of Investors Chronicle before I started on this Blog but of course that was another hour and a half so it is now nearly 9pm and I am only just starting to type and I have yet to eat Dinner which of course will take more time (although I intend to just shove something in the Oven so it can cook whilst I carry on writing).
On this basis I doubt I will manage to issue this Blog tonight (it is Saturday Night) and this is a pain because tomorrow (Sunday obviously) I am hoping to go up to Hyde Park in Londinium to partake of the Radio2 Gig thing - we haven’t got tickets because the Acts are not all that stunning (although I just found out that The Shires are going to be there because Carrie Underwood is ill - this is a shame because I really like The Shires but that’s how it goes - at least I might hear them), so the plan is to just hang around in the Park outside the enclosure where the Concerts happen and the additional benefit (apart from not paying the Dosh to go into the Gig obviously !!) is that we can leave whenever we feel like it as you don’t have that pressure of “but we’ve bought the tickets !!” and this time of year it can get pretty chilly later in the Day - no fun.
So the chances are I will be finishing off this Blog and uploading it Sunday night now - that has really irked me I can tell you !!
I mentioned on Twitter that I have been thinking about 2 fairly significant ‘Winter Projects’ regarding the WD thing. One of them I don’t really want to say much about at this stage because it quite simply might not happen - I have the essence of an idea which would not require much effort from me but I think Readers/Listeners would really like it (there is a clue there !!) and I am thinking it might be something I do once a month and it would be easy enough because it would need little preparation etc. I need to iron out some Technical Aspects and I want to discuss it with a few People at the WheelieBash next Saturday to get their view on it but if it flies I think it could be a fun and worthwhile addition to the WD deluge of associated garbage.
The other idea is far more mundane and I am pretty certain I will make a start on this soon. I have not been happy with the layout of the Website for a long time and I think it would benefit from many of the Sections getting their own Page and I know that a lot of the information has got a bit dated and needs to be read through again and tweaked and in some places more fundamental changes need to be executed on it. The amateurish and dull ‘look & feel’ won’t change because I simply can’t be bothered with that but my initial thinking is that I would finally relent and start paying the wonderful Weebly.com some Dosh every month to get more Pages but when I looked at the other benefits I don’t really gain much that is relevant and so I was thinking of firing up the Sister Website WD2 that I used to have running (god knows why I didn’t just keep it going anyway !!) and I think I have figured out a way that it will be quite ‘seamless’ for Readers in that they should find it massively easier to navigate around and to find things. For example, stuff like the ‘Little Black Book’ and the ‘WheelieBin’ and the ‘Useful Links’ etc. would each have their own Page - I am sure it would be a lot better. The current Website has 10 Pages but by using WD2 again that would give me 20 Pages to spread the stuff across (of course, before I ‘turned off’ WD2 I was only given 5 Free Pages on each).
It has also become obvious that the Homepage of the Website is a farce - it has got far too much on it now and is very jumbled etc. Clearly I need to strip Sections out from that and give them their own Page - so that is what I intend to do. The downside for WD Readers here is that sadly this will take me time to do so I cannot guarantee that I will be able to keep issuing Blogs at their current rate whilst I am doing these changes which might take a few Weeks. However, my thoughts at the moment are that once I get going on the Revamp of the Website, I will still produce a Weekend Blog but you might not see an ‘Educational’ one during the Week - although you should see gradual Changes to the Website as I go about doing them and I will Tweet out anything I alter as it goes ‘Live’ and I will put an Entry in the ‘Changes List’ on the Homepage as usual. The big upside for Readers is that in addition to superior Navigation you should find the updated Text a lot more useful.
I am not sure when I will start the Revamp but it will probably be over the next few Weeks as it is in my mind and I want to get it done - but I have quite a bit going on next Week and this is really something I can do when the Weather gets more pants and I am less able to get out and about as we get more Wintry - we shall see and I will keep you posted.
The response to this has been superb - the Quality of people attending is outstanding and I really think this is going to be a superb Day and a peerless chance to meet up with some brilliant Investors and Traders in a very informal and relaxed environment. All those Twitter Superstars like Aston Girl, Mark Bentley, Village Idoit, Mike Brenner (the VRS specialist !!!), Steve Holdsworth, Francis with the flash Porsche, Tamzin from piworld, Jon Curry, Andrew Latto, Simon Hedger, Zyg Suzin, Ben Sharman (if he can make it), The legendary GrinderTrader, and loads of others are going to be there so it should really be a laugh.
If you want to come along (oh, I forgot to mention it is next Saturday 15th September and just outside Windsor) then there are details on the Homepage and everyone is invited, whatever your experience etc. If you can please just let me know you want to come as we are limited to 40 Places and one chap sadly had to drop out last week so we can probably squeeze a couple in.
I’ve just seen the time, I better sling that Cornish Pasty in the Oven !!
Well the challenges of 2018 have continued and in line with what I have been saying for months and months now, the Markets are very choppy and Liquidity seems to have dried up and I get a sense that there is very little ‘Buying Pressure’ about with loads of people just sat on the sidelines with their Cash in the sensible belief that there is no point Buying a Stock now if it is very likely going to be cheaper in a few Months time. It makes sense because I am doing exactly this myself and I know many experienced Investors are doing precisely this and we are all just waiting for the uncertainty of Brexit and the usual Autumn weakness to be resolved - so there is no rush to do anything.
With this difficult background and the FTSE100 falling quite a lot Last Week, I am extremely happy to have come out with a small Gain of 0.4% over my whole Portfolio and I was particularly helped by a nice jump up on MPAC which rose 14% or more on the day of Results and this is a big Position for me and I also did quite well with my FTSE100 Short Hedges which helped offset some damage. My mainly US focused Unit Trusts came off quite a bit (down 2%) which was partly the US coming off the Top a little but also a small move up by the Pound. However, I can confidently assert that Diversification has hugely helped me this Year and I will add that my Income Portfolio has shown another side of its positive capabilities by performing very well when everything else has struggled - being a Full Time Investor and having a deep aversion to ‘Work’ I am very conscious of Downside Risk and the need to protect my Capital.
On the subject of MPAC, it jumped because things had not got any worse after the Profit Warning they issued some Months ago. However, this simply looks extremely cheap - the Market Cap is a shade under £28m as we speak but the Company has £24m of Cash and they have a large chunk of Land in Buckinghamshire which is showing on their Books as something like £0.8m but has to be worth many multiplies of this - maybe it is worth £5m - I have no idea. But clearly this Land and the Cash pretty much cover the Market Cap so everything else the Company has is priced at Zero. That is all the Factories and Equipment and Contracts and Goodwill etc. etc. and it is worth noting that the Pension Fund is now in Surplus. It strikes me the Risks here are on the upside and if there are more problems they still have a big Cash Pile which buys them time to sort things out. It would not surprise me if they get a Takeover at some point because the Value is obvious.
A bit further down I have included a mention of the Podcast I did with Justin on Friday and that pretty much outlines my Strategy now. In the words of Theresa May “Nothing has changed, nothing has changed…..” and I am still pretty much waiting on the sidelines and not doing much and certainly not Buying anything. I have a lot more Cash than normal at around 10% of my Portfolio and I will probably keep my FTSE100 Shorts running for a while yet - I will talk about this in the Charts section later. I think we are in for a couple of soggy Months until Brexit is out of the way and then we have the US Mid-Term Elections in November which might cause a wobble. I talk about all this in the Podcast.
To be fair to Mrs May (not something I am keen to do with how dire she has been as PM), she could probably beat me in a Dance-off !!
I was going to chuck this in further down but I might as well lob it in now. Justin managed to squeeze me in on Friday morning and I really enjoyed doing this and catching up with him. I have put a Link on the Homepage under the ‘Latest News’ section but you can find the Podcast here anyway - I recommend you have a listen because I talk at length here about what is most likely the Roadmap for the next few Months and even if you think I have got it totally wrong, at least if will give you something to consider:
Last Week I published the second part of the Blogs on ‘The Diminishing Problem’ and this one continued to spark lots of discussion on Twitter about Stoplosses and all that. I am not sure what I will put out in this coming Week but I am confident something will magically appear. I might issue that ‘Buy Checklist’ for the Income Portfolio Stocks but I need to do a bit more work on it. If not, then I have a Warren Buffett related one which is in pretty good shape and I might sling that at you.
Recently I have been reading a superb Non-Fiction Book by the Author who wrote ‘Seabiscuit’ (I think there was a film about this Race Horse) which is a Biography of an amazing guy called Louis Zamperini - who was an Olympic Runner in 1936 and he met Hitler in Berlin and then went on to become a Crew Member on a Liberator Bomber only to get shot down and stranded in a Life Raft for Weeks and Weeks in the Pacific (fully accompanied by Sharks) and then to get captured by the Japanese and treated horrifically. It sounds depressing but it is a cracking Book and I have written part of a Review about it and I am thinking that I might issue this as a Blog because it is a really interesting and fascinating Story - and quite uplifting really. Anyway, that might appear in coming Weeks.
I intend to write some Stock Blogs again soon but with the Markets really not being ideal for Buying I am thinking this is a good time to get on with changes to the Website etc. because there is probably a two month window before I might start to think about Buying again. Two Stocks I am particularly interested in are Portmeirion PMP and EMIS which I mentioned in the Podcast but in all honesty I am seeing a lot of Value about and we are spoiled by opportunities now.
On that subject, I updated the ‘Little Black Book’ Section on the ‘WheelieBin’ Page earlier this Week and that contains loads of Stock Ideas for further research.
David Stredder (@carmensfella on the Tweets) has announced that there will be another Mello Event taking place in Chiswick (not too far for me !!) on Monday and Tuesday the 26th and 27th of November 2018. These are usually superb and I am thinking I will attend on the Tuesday 27th, I am seeing Deacon Blue in Basingstoke on the Sunday so this suits me best.
At this stage that is pretty much all we know - David says he will confirm the venue and suchlike in due course - so keep the Date free in your Diary and as I see more info I will let you know. ShareSoc will be offering Discounts as usual I see.
When I put out the second of ‘The Diminishing Problem’ Blogs I forgot to put in a Link to the rather wacky Horseracing one - it is very much related to this so you can find the 2 parts here:
And with the Markets a bit Jelly-like, this Blog is probably worth a re-read and for Newer WD Patrons, this might be something you have not seen but it is very relevant when Markets are in a funk:
But this Week’s trip into the Dim and Distant Past is regarding the differences and similarities betweens Investors and Traders after some discussions about this on the Tweets - here are a few for you with embedded links to related stuff:
Better see what state these Charts are in then…….
I’m now typing this on Sunday Night because sadly I didn’t manage to get the Blog finished on Saturday as I had hoped. Anyway, we made it up to Hyde Park and had a really nice afternoon and it was great to get away from the usual realities of life and to have a good roll around in the Park and a good chat etc. with my mate. We had a bit of drama and panic when we went up by the Royal Albert Hall expecting to turn left fairly soon after to where the Car Park is and the swines had closed the Road off !! I was not happy. Luckily Becks got her iPhone out (ok, I will admit they do have some uses !!) and we managed to eventually park near Kensington Gardens which then leads into Hyde Park - it was miles from where we wanted to be and meant we got totally ripped off in an Underground Car Park which obviously didn’t have a Lift but it all worked out.
My plan of just sitting outside the Radio 2 Enclosure bit worked really well and by some bizarre bit of amazing timing, we caught the end of a group called ‘Band of Love’ who were OK and mainly did well known covers in a Country/Folky sort of way and then not long after ‘The Shires’ turned up who I really really wanted to catch. So we sat in the Park in the Sunshine and heard the music but sadly we couldn’t stay for ‘The Manic Street Preachers’ and the others (phew, saved from Boyzone !!) cos Becks has some work to do and I have some ‘work’ to do in the form of this Blog !!
I was dead right though - you can hang around the Enclosure and the sound is not too bad - although we did think that the best place to sit is at the back of where the Concerts are as the sound seemed clearer there. And it was great in the Sunshine which we seemed to have for most of the afternoon but this time of year it is clear that it gets a bit nippy once the clouds come over and it gets later in the Day.
Right, the FTSE100.
As always, the Charts I show are taken from the superb ShareScope Software and if you use SharePad or similar packages with a Charting capability (or one of the Free Websites etc. - see my ‘Useful Links‘ Page), you should be able to set up your Screens in a similar way to mine. If you click on the ScreenShots they should grow bigger so you can see more detail.
First off this is my actual real live ‘working’ Chart that I am using to manage the 2 Short Positions I have running on the FTSE100. I am not going to show a lot on this Chart but I will move onto the Technical aspects in a bit but I just want to show my Trades and where the Stops are etc. First off the Yellow Circle is capturing the Candlestick from Friday and this is interesting because it has a bit of a ‘hammery’ sort of shape and there was a good Reversal up off the Low of the Day. This could be a Candle that the FTSE100 can rally up from.
The Blue Horizontal Lines are where my Short Positions were Opened and then up above at the top we have the Pink Line (marked by my Pink Arrow) which is the Stoploss Level for the first Short I placed and then just below where the Black Arrows are pointing, this is the Stoploss Level for my second Short. Tonight I have decided to move the Stoploss for the first Position down to the same level as the second Position - so the Stoploss is now just one Line which is at 7550. My Shorts have moved into Profit so by lowering the Stoploss a bit I have reduced the amount I can take as a Loss if the FTSE100 manages to rally hard and takes out my Stoploss level.
On the face of the fact we have that ‘hammery’ Candle which could mark a Reversal, I could close the Shorts out here and bank a Profit but my thinking is that even if we do rally a bit, it might not get far and the weakness of September and Brexit etc. (as I have discussed above and on the Podcast) are still about and I want to have Shorts running to ‘Hedge’ my Long Portfolio a bit. The danger of closing the Shorts now is that the Market could easily drop fast and I might not be able to get a new Short on quickly enough to be able to Hedge. With my Stop at 7550 there is plenty of ‘wiggle room’ for the FTSE100 to move up a bit without triggering my Stop so I am still in the Trade.
There are more details about these Shorts on the ‘Trades’ Page of this Website.
The Chart below is a bit wider than the one I showed initially, and this is similar to one I have shown in previous Weeks. First off, where the Hammer sort of Candle on Friday is, the Low is at 7227 and this is now important Support that must hold. If 7227 fails, then where my Green Box is and my Yellow Circle, there is a lot of Support and I would be really surprised if 6866 at the bottom was to fail - although I guess if Brexit gets really ugly (like a General Election being called - which is possible but very very unlikely) then maybe it might challenge that area. There seems to be a Band of Support between about 7326 down to 7026 which is covered mostly by the Green Area.
If the FTSE100 can move up now off that Candle, then the immediate Resistance is at about 7400 (to be fair there is Resistance at 7328 before this) and then we have Resistance up at 7432 (where the Blue Arrow is) and then around 7500 where the 200 Day Moving Average is which is pointed at by the Black Arrow. I think 7500 could be a difficult Level to get back above now - especially with September usually being such a dodgy month although of course crazy moves by the Pound will have a lot of effect.
Something to keep an eye on here is that 50 Day Moving Average which is marked by the Green Arrow which is ducking down towards the 200 Day MA - if they cross, then we get a ‘Death Cross’ and this could imply Weeks/Months of weakness in the FTSE100 to come. On the more positive side, it is possible to get a ‘Death Cross’ for it to soon be overturned by the opposite cross - a ‘Golden Cross’ - but this needs strong moves up to make it happen.
In the bottom window on the ScreenShot below, we have the Relative Strength Index (RSI) for the FTSE100 Daily and I have taken this back a few Years to give a good idea of how low the RSI can dip before it tends to bounce a bit. On a current Reading of RSI 34 it is quite low by the FTSE100 usual standards and we could easily move up here which chimes with what I have said earlier, but as you can see it is not unusual for the RSI to rise up again but then to drop back not long after. We shall see.
On the Chart below we have one of my fave Indicators - this is where my Yellow Arrow is pointing to where we have a ‘Death Cross’ sort of thing between the 13 and 21 Day Exponential Moving Average (EMA) Lines - at the current time, you should be able to see that this Death Cross is still ‘in force’ and I have learnt that when doing a Short or a Long on any Index like this, it is very wise to ‘follow’ what these 13/21 Day EMA Lines are telling you - in other words you only go Short when there has been a Death Cross and you only go Long when a Golden Cross is in operation.
Next we have the Weekly Candles for the FTSE100. My Black Arrow is pointing to a Big Red Down Candle from Last Week and this of course is Bearish simply on the face of it. For the FTSE100 to now turn up on a Weekly basis, we need a Reversal Signal of some sort and if you look at my Yellow Circle, this marks where we had a ‘Bullish Harami’ 2 Day Candle Pattern which is a Reversal and my Pinky Arrow is pointing to a Hammer Candle which marked a Reversal - so we need something like these to get a Reversal now.
Obviously we can Rally now on a Daily basis, but that could easily run out of puff and turn down and this would make the Weekly Candle for the coming Week (once it forms up) look Bearish (I hope that made some sense !!).
Now we have the Daily Candles which we saw earlier, but I have zoomed in and we now have the Blue Squiggly Wiggly Bollinger Bands above and below. Where my Yellow Circle is around the sort of Hammer from Friday, note the Candle is outside the Bottom Bollinger Band and this is an unstable condition so the FTSE100 needs to move up or go Sideways to unwind this situation.
Now we have the Daily Heiken Ashi Candlesticks and remember these are totally different to the ‘Normal’ Japanese Candlesticks that I have been showing so far. This time, where my Black Arrow is, we got a Big Red Down Candle and on these HA jobbies, this is Bearish and suggests more falls are likely. That can change fast though.
This is the Index of the next 250 Companies that are smaller than the FTSE100 Stocks and a good proxy for SmallCaps in general in the UK (note, quite often when a Fund says it is a ‘SmallCap’ Fund it is largely invested in the FTSE250) and in many ways the Technical picture looks quite similar. My Green Circle is catching a Hammer type of Candle like on the FTSE100 from Friday and in a similar way there is a Zone of Support just down below and there is Resistance up above in a similar way.
Just above the Hammer (note, this is prettier than the Candle on the FTSE100), there is Resistance from the 200 Day MA Line at around 20400 and a fair bit of Resistance up at 20600 where my Yellow Box is. Like on the FTSE100, the 50 Day MA is dropping down towards the 200 Day MA so we might be ‘treated’ to a Death Cross soon. My Green Line and Green Arrow marks a possible Top Line for a Downtrend Channel but it is early days if such a Channel is going to form but that is something important to watch for.
Oh, while I think of it, the FTSE350 comprises of all the Stocks in the FTSE250 plus the ones in the FTSE100.
I won’t show any more on the FTSE250 because it is very much similar to the FTSE100.
Let’s look at some US stuff……..
I’ll start with the Tech Index because that has been so much of the story behind the strength in the US Markets of late and it is interesting to see if the US Markets are going to show the weakness that we have over in the UK and in Europe.
My Green Circle is highlighting a sort of ‘Inverted Hammer’ Candle but I am not really sure what this means in this context - had we seen more Falls beforehand, then such a Candle might mark a Reversal Point but in this context I suspect it could mean more falls. Anyway, the key thing here is that 50 Day MA Line which I have pointed at with my Blue Arrow - that has held as Support for quite a while now and if we properly drop below that it would show weakness. There is good Support down around 7600 if it does drop and further down we have the 200 Day MA which should cut in at around 7400. Overall this still looks pretty Bullish.
In the bottom window below we have the MACD (Moving Average Convergence Divergence) for the Nasdaq Comp Daily and my Blue Arrows are pointing to the 2 different formats which show a Bearish MACD Cross. I find this not a particularly predictive Indicator but it is obviously another sign of weakness.
Now we have the 13/21 Day EMA Lines to look at which are the Black Line and the Green Line and where my huge Green Arrow is we had a ‘Death Cross’ a while back and this is what we need to watch out for now - at the moment it is still Bullish.
Next we have the Weekly Candles. My Black Arrow is showing a big Red Down Candle - that is bearish looking.
And now on the Heiken Ashi Dailies we have a Big Red Down Candle which is bearish.
The S&P500 is very much the same as the Nasdaq Comp.
Dow Jones Industrials Index DOW
This one is off the All Time High (ATH) which is up at 26617 but in the near term we have a bit of an Uptrend Channel as per my Black Parallel Lines and Support at a tad over 25800 is an important Indicator of where we will go next - if that fails, then expect more falls but there is good Support on the way down and particularly where that 50 Day MA Line is around 25350 and then down at the 200 Day MA at around 24900. Overall it is quite a bullish picture and at the moment the drops from Last Week look very ‘natural’ and just a healthy Pullback.
Finally we have the Weekly Candles for the DOW. My Yellow Circle is highlighting a sort of ‘Star’ Doji Candle and if you look at the previous Week, we have an Inverted Hammer there which looks Bearish and probably a Reversal Candle in the context of a good run up before. This Star Doji from Last Week probably confirms the previous Inverted Hammer and I would see this as a Bearish thing. But not something to panic about.
OK, I need to wrap it up there - if I can find a nice Pink Bow to shove on it !!
Have a great Week everyone, and don’t do anything silly in these very shaky Markets.
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