Trade DiaryWe currently seem to be playing a game of musical chairs where the eagerness to enter the recent bear rally is wearing off. A level of fear at holding stocks (mainly banks) too long seems to be spreading. Quick profits have been made and the banks themselves have been great recipients off the frenzy but what happens now that the music is starting to wane.
I think like most that the recent stress test was farcical and that the wider market is now realising this may not be the V shaped bounce they desperately desired. Instead we may see many months of profit warnings as companies fail to meet expectations. Increasing job losses mixed with stabilising but not diminishing bad news will wear the markets back down. I’m firmly of the opinion (excluding any black swan event) that the market has made a bottom but a retracement of 10% – 15% from current levels is likely and expected. I believe the markets will have a more positive feel once we do this and can then bounce successfully to stable highs. My year end prediction of 4,400 for the FTSE 100 still stands but volatility in the intermediate term may increase again.
So where do I stand in all of this. Well frequent readers will know my short positions and my intention is to continue a short strategy above 4,500 on the FTSE 100. Should we not go above these levels again I will stay neutral. On a successful retracement I intend to buy value stocks to add to my current list of MSFT and KO which I bought at the lows and are now doing quite well. I think there will be a great downside to banking stocks but value stocks which haven’t gained that much in the recent rally will not lose that much in any retracement.
Website Redesign
I’m currently redesigning the website and making the sections a little easier to navigate. I’m also hoping to add more book reviews and some intro advice on spread betting. This means I may not be updating as frequently but it will be worth the wait. If anyone has any requests please sent them on or add them as comments.
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Safe Trading.
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Hi Chris
Thanks for your post. I think it’s a great idea to have the book reviews and intro advice. I’ve started my own spread betting site and found that people who use the site and contact me really want info about which are the best companies to use or how to be safe when spread betting, so these are good issues to tackle and there’s definitely an audience for it. Good luck!
Hey Chris
Well looks like the 4300 support refuses to be breached despite
swiney pigs and a swine in North Korea – the question is,
will 4500 resistance be busted on the 3rd time of asking….
You still in the game mate? It’s over a month since you posted anything….
and it’s six weeks since the market broke 4300 and has been in a 200pt range every since.
Still reckon the next big move is down? I did – but it’s mid-june and still no sign of it. Have you *still* got a 20 euro short on the FTSE open for mid-Sept??
In any case – good luck! Hope things are ok your end.
Hey Jezza,
I still have the short open and its looking a little better. Now that 4,300 has been broken I think we will head lower. First we may get a bounce back but 4,000 isn’t far off. I will do a proper post tomorrow.