APN

Focus on the charts

The last two weeks have been tough. In all honesty, the reason this blog post is only being posted now is because I found it difficult to not express an opinion on the current happenings in our country. It is deeply concerning. I must have written and rewritten this first paragraph at least ten times. It just feels disingenuous to write up a blog post that optimistically looks for opportunities, while our cities are burning. So with a heavy heart, I have to force myself to clear my mind of the anxiety and noise and focus on the charts.

Be patient and hold the longs

We have to admit that today’s post was difficult to write. It is hard to focus on opportunities in the week ahead while our country appears to be… well, having a really rough time. We often say that we must filter out the noise and focus only on those things that can accurately analyse (aka. the chart), so that is exactly what we are going to do. Besides, the world’s financial markets are looking fairly good and we’ve positioned well for strength in the offshore portfolio’s. The only thing to do now really is to be patient and hold our positions.

Trend following for the win!

We are all guilty of overcomplicating trading. Often we have to remind ourselves that most of the work is done by the market and that trend following is often the easiest way to interact with markets. This week we look at a few of the better trend following ideas we have for the week ahead.

The trend is your friend

It’s an age old saying in the market, and for good reason. The trend is your friend. Often we try to fight it and mostly, it wins the day. Markets are currently trending higher, and thus our plan is to find opportunities to get onboard with the trend and allow it to make the returns for us.

Can’t stop a good thing

Well then, that’ll teach us to think that markets can actually come down from time time! Jokes aside, the bearish setups from last week have all be nullified and a fresh set of breakouts have taken place. Guess when it comes to equity market rallies, you really can’t stop a good thing. We’re not entirely convinced from a long-term perspective, but for the short-term traders… well, the job is to follow the market. So if you can’t stop a good thing, you might as well join in the fun.

VIX below 20 signals risk on

Markets have been uneasy for a rather long time now. Well, uneasy is perhaps a mild way to put it. Markets have been uneasy for the last few months, maybe, but just over a year ago markets were in a full-blown panic. Thankfully those crazy times have passed. Over the last two weeks, we’ve even seen the VIX below 20, which is something that has not happened in a mighty long time. Lower volatility signals higher risk appetite and we think a VIX below 20 signals risk on in equity markets.

No pullbacks, only new highs please

Markets bounced hard in the second half of last week. It’s almost hard to believe how fast things are changing in the current landscape. Although there are so very many reasons to be cautious, if not flat out bearish, the market is just pulling its ears back and making its way higher despite the conditions of the world around it. Thus, given the strong footing the market ended on last week, and of course the charts, we think that we’ll likely see new highs in the week ahead.

Buy the dip?

Well, after all that bearishness, all we got was one day of #marketcrash trending on twitter and a bounce so glorious I’m sure people will be singing songs about it at some point in the future. It seems that ‘buy the dip’ is not dead just yet. In truth, the irrationality of this whole market is starting to scare me a little, although I am not going to fight the ‘buy the dip’ crowd.

A dose of patience needed

The fast paced world out there always tries to get us to take action immediately. There is a sense of urgency that is ever pressing. You have to buy this useless trinked right now! You have to act now to make money on the stock market! Cryptocurrencies are exploding and you must act immediately lest you want to ‘enjoy staying poor’. This is all garbage. The reality is that there is a lot of patience needed if you want to make any sustainable, long-term progress. The same is true with trading. The patience needed to wait for the right trades, at the right levels is something that almost never talked about. So although there are a few decent setups this week, there are a few markets on which we have to respect the patience needed and wait for a more clear setup.

The trend is strong with this one

The U.S. market is closed on Monday for Presidents’ Day, which means that our market will likely be rather quiet at the start of the week. Overall though, the bullish trend is strong and has been for some time. I rang some alarm bells last week, although it seems that I was wrong. This doesn’t mean that we should all rush out and put on a thousand new long positions. Patience, caution, always.

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