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786Trader

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786Trader last won the day on July 27

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  1. Volatility is such fun. If you are on the right side of it , of course. Dow@ 27239, will go higher expect 27550+/- 1%. Then hang on to your shorts as it's big swinging cahones time. If there is no more stimulus, saving the Fed largesse then watch the Dow sink 3-5% as retrenchment may be the order of the day. With stimulus expect a gain, then retrenchment, then exuberance, then retrenchment, then a small nervous breakdown....... It's as if the Dow has become the schizophrenic naughty cousin of the S&P. Today is the last day before the delayed August break for Congress so it's pooh or bust for legislators, who will naturally blame each other if they fail to agree. Ahh the competence of governments.......
  2. IG are expensive where actual purchase of shares are concerned. There are better options out there if you simply want to buy and hold shares that charge zero commission. IG is more about trading. If you are buying lots of shares then IG is ok for share purchase. But, if you are buying small volumes and looking to sell quickly then IG is not the best company.
  3. One may have expected the Dow to surge forward in anticipation of another stimulus. Seems to be already priced in. In fact, looks like there is more anxiety and caution than the usual blind optimism. Looks like one piece of really bad news could set off an avalanche. If an extra trillion or two is not inspiring the markets higher then a suitable hedge down may be in order, n'est pas? Plus Brent can't seem to break $45 no matter how hard it tries. Even China is selling it's distillate stocks as they see the plateau and surmise things are going to get worse before they get better and are taking the money now. Have you been counting on a "V"? Hedge your position, volatility may well return with a vengeance. Just a different point of view.
  4. Once more the brilliant Bo Johnson comes to the rescue of sterling. His multi-dimensional-global-trade-deal-chess match is also doing fabulously well. Naturally, trade relationships with significant trading partners such as Europe, United states and China could not be better and the outlook is fairly reflected in the price of Sterling, which is devaluing like the Zim dollar (ok not quite that bad). Fair to say Sterling is holding its own against the US dollar (which has been diluting its value with trillions and trillions of dollars of new money), but against the Euro the only way is down, it seems. Some may suggest this is good for exports, others may argue not quite so, when reciprocal tariffs are factored in. Ahh the joy of tariffs. And we may have so many to factor, quantify and pay and pay. So much easier than the bureaucracy from europe then. Sterling / Euro pair have been ripe for shorting since the apparent determination of UK govt to leave without a deal and move to WTO rules, thereby subjecting all goods and services to tariffs. Just what the electorate voted for. So good for business. Naturally the city of London is overjoyed. Those shorting Sterling certainly are. Who would have thought the Euro to be so resilient? Bo Johnson the brilliant, tooling with UK trade, or just tool? A combination of arrogance and very unfortunate timing has combined to take the alleged strong hand the Uk had in negotiations to revealing quite the opposite; Trump is too preoccupied with re-election and China and president Xi consider the Uk being a few consonants short of profanity. The EU have had quite enough of brilliant Bo Johnson and his inexperienced negotiators. Combine this with the all encompassing effect of Covid19 and the great plans that seemed oh so probable, now appear fantastically out of step and time and wholly unlikely/impossible. His govt of idealogues have proven incapable of intelligent action and devoid of experience, as neither were requirement for office. So Sterling is paying for this. The Footsie is paying for this. Eventually the taxpayer will pay for it all. Not to forget the ballooning national debt. A really, really big balloon. Well the electorate certainly is getting what it voted for in the recent landslide election. Getting Brexit done quickly and at any cost. Or getting done by Brexit? Schadenfreude.
  5. Great points there Davy. It looks like stops are your big problem. Price movement is rapid both up and down and having faith definitely helps. Trading out of good positions when it swings negative and triggering a stop loss is a common occurrence. Have you tried setting stops with a - 1%, -2%, -3% or even -5% swing. I concur that losses would be larger, but it also gives opportunity for swings to gain in your favour by similar margins. setting a stop with too much caution can create losses where it is not necessary. Bear in mind bots hoover up small price swings automatically and a very limited stop is bread and butter for said bots. Also you allow for giant trades which alter the price to be absorbed before popping stops. I am predominantly an oil and gasoline trader and have long stops and defined limits often smaller than the stops because when big hedge traders drop massive sells I do not get caught out in the wash and when the price swings back in my favour I collect (often after a frantic few minutes/hours/ sometimes days). Have also been trading Dow exchange futures which is a completely different animal and does not behave according to fundamentals, it would appear to be manipulated and influenced through stimulus and an army of desk jockeys with nothing better to do and no interest on their savings, who cannot short a market as easily a we can, so feel they have to buy to survive. The Dow also swings like a trapeze artist on steroids. Have been running uphill with that and figure to exit when final hedge pops....it's taking its time. If you believe the trade you have made is correct and have done sufficient due diligence I have found self belief will get one through times of high anxiety. The price is just the price, it is what it is, placing subjective value on winning or losing is difficult to avoid but a philosophical attitude can get one through and keep one in the green. One's own emotions and panic are the real enemy. I wish you good luck and keep your nerve. Have a great weekend.
  6. I suggest the Dow may have made a crest@27150. It could go higher, but more likely a retreat to saner levels is my position. Sell on the peaks, buy on the dips n'est pas?
  7. Forgive me, sarcasm is the lowest form of wit. Battle is surely not over. Markets simply overreact. In the case of the Dow massively.
  8. Talk about exuberance. (Oft used word like unprecedented). Dow is steaming up to 27000 and heading north. The battle with Covid is over then. It is beaten and normal service will resume directly. Next stop all time high? Forget about the bad news. It's only going to get better and better and everything is going to turn out rosy. Lovely jubbly. Moderna's results are encouraging, it is true, but not categoric, peer reviewed or tested on more than 48 fit test subjects. Otherwise, the situation remains the same. One supposes that if one were to no longer test, then the virus will simply disappear, as no one would have it because no one has been tested for it. Brilliant logic and an especially good recipe for rampant, uncontrolled, unmonitored communal spread. What's a few hundred thousand deaths of vulnerable people matter anyway? It's the bottom line that counts, surely? Then there is the matter unemployment and the 30 million still receiving unemployment cheques (soon to be stopped). They will all be instantly be re-employed, of course. As for the debts, it's only debt and we can always print more money to pay for and buy more debt. Those in arrears can have their debt purchased by repo's and start again, unless it's lots of debt, then we'll bail 'em out. Fantastic. Win win on the money-go-round. Obviously, pre Covid, say Feb 2020, assets and equities were hugely under-priced. Tech is still massively under-valued. Isn't it? Tesla may even make a profit proving its market cap @$220 billion. Cheap at the price! We have won the battle with Covid, it is done and won and a big V for victory for the markets. As you can tell it is day 6 of my not drinking and I am hallucinating, cannot tell fact from desire and am selectively, blind, deaf and have a factual reality by-pass. It would appear I am not alone. One thing to note, it sure is interesting. Defiantly not a bubble waiting to pop. Absolutely not a bubble. Exuberance warranted. Must be time for a trade war with China then.
  9. I like your interpretation of future possibilities. I don't think the Dow will recover to post crash highs anytime soon, maybe 2022. You have drawn a whipsaw. Not sure it will whipsaw quite as much but may trend negative to current highs for sometime yet. Sideways down. Bear in mind there is no shortage of money supply (markets are awash with it) enough to stem the tide for the meantime. Devaluation of the USD$ may be a result and with it the desired increase (small) in inflation which will help with the deficit. Danger being stagflation and a moribund economy (eg. UK). In fact, re UK economy combination event of Covid and hard Brexit will almost certainly kipper UK GDP for years to come and cost the UK economy trillions to little or no measurable benefit (barring flag waving rights). Naturally, the unfortunate taxpayer will foot the bill again.
  10. Read an interesting article on Yahoo finance which showed the majority of gains in the Nasdaq is down to the big 6 tech firms and without them there would have been no gain in the Nasdaq since 2016 and the majority of movement is down to the price of 6 companies. It would appear, in the search for dividend and profit everyone has opted to buy Amazon, Facebook, Apple, Alphabet, Microsoft and Netflix, as a herd reaction. No one has stopped to question whether they are over-bought at all, or if they may have questioned that premise, the thought would have been quickly cast asunder in the wake of evidence to the contrary (prices of the big 6 only bulldozing up). This may have lead to a false narrative, where we may consider everything is rosy in the garden of equities and everything will all be alright soon, as long as the big 6 keep on growing, even if much other evidence suggests the contrary. Which it is. From employment to housing arrears, from relationships with allies and perceived foes to actual communal transmission of Covid 19. From stratospheric Fed and govt debt to trade imbalance, from irrational exuberance to actually facing reality now. Instead of relentless optimism, relentless realism. It would appear we are in for another week of exuberance. The sun is shining, people are out enjoying themselves and one could be forgiven for thinking the crisis is over and we can all go back to doing exactly what we were doing before this inconvenience struck. Reassessment can be inconvenient too. No one likes to be wrong, (though we often are). Least of all the Potus, who's principle motivation may not be the well being and good health of his people, more the well being of the economy, more specifically the price of equity. He encourages more exuberance even when evidence may suggest otherwise. It is earnings season for equities, the reports, many of which would make grim reading in more sober times, will be ignored for even the merest hint that the future will be brighter or it wont get any worse, from a reaction to Remdesivir (which appears to improve more than it harms, improves 9 harms 3...a litigation lawyers dream) to any glimmer of positive data. Then one looks at the price of Tesla and realise the equity markets really have gone potty. Look at Tesla's numbers and its price makes no sense at all. Herd irrational exuberance in a nutshell. VW and Toyota p/e far less than 10, now look at Tesla and you know its share price is on steroids and anything else the doctor will prescribe. I recently drove to the New Forest to visit a good friend. It is normally a patience sapping experience, but left on Friday 7 pm and arrived at 9;10 pm in record breaking totally unbelievable 2 hours 10 minutes. In July. Normally, it takes at least 3 hours. Roads are still quiet. Which leads me to question again the premise of a "V" shaped recovery and consider whether those that suggested a "V" shaped recovery actually have very poor hand writing and their version of a V more closely resembles a flattish tick or even a very sloppy W. I digress, the point being there has to come a time when the US has to take off its rose tinted glasses and see the reality of Now for what it is, rather than wishing it all away for a brighter tomorrow. Might not happen this week as equities push higher but you can't escape it forever. Can you?
  11. It would appear cooperation and mutual benefit are also expedient in the neo Covid worldšŸ˜ƒ For how long is open to debate...
  12. Brent has been in a protracted battle since Covid 19 to regain it's 2019 price-point of $55-$65. To do this producers have had to put aside competitive animosity and fundamental political differences for the greater/ their own good. To a great extent this has worked and producers have managed to agree to cut supply in order to regain margins. All well and good. Naturally, there are going to be rocks in the road to this continued cooperation. One such obstacle is Libya. Another is Venezuela. They are currently unable to produce oil as they are being hampered by inconvenient sanctions (Venezuela) and a nasty little civil war (Libya). However, it is looking more and more likely that Libya will once more become a global supplier in the not too distant future. Libya has lots of oil, it is the largest producer and has the largest proven reserves of oil in Africa and is on the point of reopening the taps. Global supply is almost balanced with demand, I wonder how OPEC+ members feel about the return of Libya into their club of bonhomie? Will they be overjoyed to once more compete with a cash strapped Libya and their gazillions of barrels of oil? The risks are obvious. The Opec+ love in could disassemble and with it the stability in oil price. Covid 19 could return in the fall before it's exit stage left come 2021. A combination event is within reasonable feasibility. Plus, the world economy will almost certainly be in contraction until 2021 heading off greater demand at the pass. It is therefore my humble opinion that oil (Brent) shall not rise inexorably, but trade within a range of $38.5-$47.5 until mid 2021. That's my bias, for what it's worth.
  13. Looks like both are over valued. Personally don't rate Tesla as highly as others do. But, when asking the question, " Do you think this company will still be doing business in ten years?" ", my answer is "yes both Tesla and Amazon will still be around come 2030". Though if Amazon hives off AWS then maybe not. As for Tesla, if there were legislation requiring personal vehicles to be electric then it's on to winner. If not then, Toyota are a better company, even if they are old tech legacy. Tesla's share price is built on speculation, not profits. Amazon without AWS is a profitless leviathan. The FANGS will also have to face a vexing taxation reckoning as their practise of profit allocation (ok profit laundering) is unfair and the EU and even the UK will tax them fairly according to profits generated at source location. They will not like that much, even if it is the right thing to do. They are both over priced. However, as compared to the Chinese stocks (P/E 25-35x) they are cheap (which they are not). It could be countered something is worth whatever someone is prepared to pay for it, depending on how much they want or need it, or consider it's value may increase over time, even if they are paying tomorrows/next months/next years prices today. In short, well done to those who are profiting from shrewd market timing, especially with Amazon and Tesla, even if they are both over-bought.
  14. Unemployment numbers are eagerly awaited. They normally tell us the state of the economy and should indicate the price of equities. In a normal world that is. This is hardly normal, or new normal is on steroids, myopic and heady with fast cash. It is baffling. Even with good numbers from the US department of Labour, it is still likely to read ongoing claims of approximately 20 million. A virus as virulent as ever, with only suggestions of a vaccine (available Dec2020 earliest). A president concerned primarily with continuing his power and not much interested in the "foreign" virus, which now is boring him. Naturally, the markets have taken this as another massive positive and are buying like it's 2019 all over again. Are the majority just suckers? Obviously P/E ratios are for has-been nay-sayers, as is the notion of value. Even as Facebook is boycotted, hurting ad revenues, its price is still on an upward trend. Google is also taking a hit to its ad revenue, yet the same can be said (the only way is up). I have been astounded repeatedly by the Dow's irrational resilience. Unlike Oil, which has reacted pretty much as it should and is priced fairly (ok, plus or minus) and that is despite Saudi and Russia being total numb skulls in March. Opec+ has members that dislike each other intensely and would not wee on each other even if they were on fire, but have managed to come together for their common good. The result is supply and oil price is moving with demand. (One has to question Saudi insistence on heavy premiums to Asia, and conclude Saudi royals oil ministers are not business people and treat Oil as political, as they sure don't understand the nature of good business and are doubtless surprised when they are the last person anyone wanting oil calls, but I digress). Oil seems to be fairly priced according to market value. Equities are not. Equities are still in lalalalala land. There was a time when there was a symmetry to the price of oil and the value of equity (25% of all equity is oil ) . That correlation has ceased to have relevance in the present paradigm. In a normal world, equity would be around 25% down from its highs, roughly equivalent to the oil price being 25% down, which is roughly equivalent to the total level of economic activity being down. But not today. Today those correlations do not work. Because the Time factor has been ignored where equity is concerned. Because the Fed has flooded the markets with liquidity and related stimulus. Where Einstein maintained time being relative, it would appear equity is also relative and travelling at considerably different speeds to the rest of the actual economy. Or is that just those trading equity? Dow does not like down. But sometimes you have to come down, don't you? It's not called a correction for nothing.
  15. Ever had one of those days when it was better to stay in bed? When everything one touches turns brown and squidgy? Oil is readjusting and having a moment of clarity and the price is falling, currently 7.7% off it's Monday Am high. Is this simply profit taking or is it Hedge Funds simply cashing in their considerable chips and seeing what happens next? Result is market is quietly falling. This has woken a few to the excesses of market exuberance in other markets and prompted more cashing in. Naturally this morning (very early) I managed to make a double whammy of errors of judgement. Firstly I bought when I should of sold (self inflicted error due to mis-click), secondly I sold when I should of held (common mistake). Bye bye last weeks profit. Despite reading the market and mostly understanding it, I still managed to conspire to self sabotage. Therefore, some days, it's better to stay in bed, side step the day, go for a walk, feed fish, relax. Anything but try and make more money. Just putting it out there.
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