Author Topic: Trader's Journal  (Read 1849 times)

Bevan

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Re: Trader's Journal
« Reply #15 on: August 07, 2020, 04:58:14 pm »
We've had a nice little rally on the Dow as expected, even though it was a bit of a shaky start last Thursday / Friday. However, this gave really nice levels to get in at and we've enjoyed at least a 1,000 point rally in a week. However, the rally was a lot less energetic than I was expecting, meaning we might be nearing the end of stimulus induced rallies. C'mon the FED.... We need more cash and more newbies to pump markets higher.

Anyway, most stock markets should continue drifting higher for now. I expect that the rest of August should see further gains, but with daily momentum almost peaking now, I can't see markets shooting the lights out. I predict that the reality of Main Street economic woes will start setting in and many will start taking profits. I think it's too early for that as regards this latest move but definitely time to bring up those trailing stops....

Remember that most traders lose money because they cut their profits too early and let their losses run, when of course properly disciplined traders do the exact opposite. If trading was a 50:50 coin toss each time, then mathematically one should make money if you let your profits run at least twice the distance of where you cut your losses. Easier said than done of course.... Which is why robots make the best traders.

I'm amazed at how gold has continued to run. I was expecting the $2,000 level and of course when that was breached we saw a whole bunch of new cash coming in as it made news headlines. Silver has done even better, with a smaller trading and investing community and far more demand for the physical, as wealth storage in coins, bars etc. Personally I think silver is awesome and it should find increasing use in medical and other industrial applications as well. Even the ancient druids knew of colloidal silver's medicinal uses, and they used silver reflected light when operating Stonehenge as an advance invasion warning system.

Anyway, I'm babbling. No new trades to put on right now and we're looking for an opportune time to exit our longs in the Dow. We might use the pullback after that to go long again before momentum turns down on the monthly chart, at which time we will be looking for that exciting short opportunity. Meanwhile, shorting vol is still a decent trade, especially considering the overnight free interest carry earned by most CFD providers.
« Last Edit: August 07, 2020, 07:17:40 pm by Bevan »
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Bevan

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Re: Trader's Journal
« Reply #16 on: August 14, 2020, 04:57:04 pm »
Nothing really to report here, other than stocks (as represented by the Dow, I should probably use the SP500 instead) are peaking on this latest rally. However, whilst active traders might look to take profits and look for a re-entry point later on, one NEVER ever shorts stocks when both short-term momentum and trend (signal) are in positive territory, as they are on all of a daily, weekly and monthly chart.

Of course, downside surprises can come at any time but for now it's probably safe to let your capital stay long in stocks, if it's lazy capital. If it needs to work instead, then take profits on stocks and go into something with a bit more volatility like BTC or ETH, which could work for those who can handle a faster heart rate. Both are due for another pop higher, probably over the weekend. Of course, LINK is the new golden child on the crypto front and it "should" continue to outperform in the short term, as greed keeps looking for those 10-bagger returns.

Gold saw its arse handed to it after the dumb money poured into the trade above $2,000 and it hit global news headlines. Now I expect sideways range bound trading as the wind is blowing against the current, creating choppy price action. Definitely one to sit out for now. We will probably only see another big run towards Oct / Nov time when stocks look most likely to wobble again.
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ratratings43

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Re: Trader's Journal
« Reply #17 on: August 15, 2020, 03:02:24 am »
Does anyone has a list of JSE stocks which can be SHORT?  Any which brokers provide the service?

Bevan

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Re: Trader's Journal
« Reply #18 on: August 20, 2020, 10:49:33 pm »
Does anyone has a list of JSE stocks which can be SHORT?  Any which brokers provide the service?

You can short pretty much any share, but this is something you would typically do via a broker. Also it's much easier to short via a CFD platform such as IG INDEX for instance.
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Bevan

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Re: Trader's Journal
« Reply #19 on: August 27, 2020, 12:27:02 am »
It's been a pretty amazing stock rally these last two weeks but we are now quite extended and overbought. The monthly chart for SP500 is the highest ever overbought MACD ever, about twice as extended as that in 2007 / 2008. But of course this is simply a sign of the volatility and massive energy that has flowed into markets in the last couple of years.

Every man, woman, binary and their dogs and cats are long the stock market. The amount of QE and easy money that has flowed into markets is truly stupendous. There will of course be the inevitable correction and these will likely be quite volatile too.

A correction could be imminent in the next few days. I note that the VIX index has been climbing the last couple of days for no apparent reason i.e. it should be going down as stock markets keep going up. Gold is also turning back up after its recent sell-off. So I suspect the clever money may be gearing up for something. (I have an emerging theory that the massive index funds could be pushing markets down before the monthly buy-in around the 1st - but of course this will end in tears if true, as the front-runners will cause havoc and even more volatility).

Either way, I'm now out of all stocks, gold, crypto etc. and keeping my powder dry for now.
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Bevan

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Re: Trader's Journal
« Reply #20 on: September 06, 2020, 09:34:53 am »
We've had the expected correction in equities now and the next week or so are now crucial.... Do we revert to the wild, QE-fuelled bull run we've seen so far this year, or is there something more nefarious lurking out there. A weekly chart of the Vanguard All World ETF is very similar to most other equity markets, suggesting it is looking to break down, leading to more choppy sideways action - for now.

After this inevitable subsiding of momentum, will we then see the classic bull-flag upwards breakout again, or do we see a more sustained structural break downwards? Too early to tell right now. But either way, keeping our powder dry is the best strategy for now.

2020 has been a fascinating year so far to learn about how financial markets are adjusting to the new monetary order. Warren Buffett has made the bold move of investing into yen-denominated Japanese trading houses such as the legendary Mitsui and other "keiretsu". Guess he's not interested in being 100% in USD anymore... The cracks are starting to show now....  >:D


« Last Edit: September 06, 2020, 09:41:02 am by Bevan »
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davidl

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Re: Trader's Journal
« Reply #21 on: September 09, 2020, 08:55:36 am »
Hi Bevan, with the amount of money printing, I have been long gold for a while now. I think it's still a good place to be, although it's come off in the past week.

Bevan

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Re: Trader's Journal
« Reply #22 on: September 09, 2020, 03:41:33 pm »
Hi Bevan, with the amount of money printing, I have been long gold for a while now. I think it's still a good place to be, although it's come off in the past week.

Interestingly gold has not sold off like equities have these last few days. This is an emerging sign of the strength building up in the gold market. Also, it's interesting that the "unobtainium" premium in physical gold and silver is getting larger and larger i.e. the premium you have to pay to hold your own physical gold vs. something like an ETN (which tracks gold price performance) or an ETF (which is backed by someone else's gold in a vault somewhere).

When the sh1t finally hits the fan, the unobtainum premium will go through the roof whilst the gold price itself over time will do just a little bit better than inflation. Crypto fanatics also talk about BTC etc. having their own unobtainium premiums but that has to be factored against the fact that crypto won't necessarily be desirable in an economic emergency. There just hasn't been enough widespread adoption of it, whilst gold and silver can easily be used as cash-equivalents when the need arises - after all they have played this role superbly in the past before.
Audi, vide, tace, si vis vivere in pace. Pax vobiscum.
Happiness belongs to the self-sufficient - https://www.thrivecentre.co.za