Stopped Out

Buying Apple stock just before earnings announcements might not have been the best idea. After purchasing stock at €98.9 I got stopped out after a decline down to €94.3 taking a 1.05% loss of my trading capital.

This taught me four crucial lessons:

  1. I have to backtest whether my system allows for investments during earnings announcements. More stocks like Netflix significantly plunged after earnings announcements.
  2. I have to do significantly more research before starting trading.
  3. I have to increase my trading capital before trading. 0.4% of the loss of my trading capital was due to transaction costs.
  4. However, I am happy that I did follow my trading rules taking a loss at the stop that I set myself.

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Best,

Nils

Gold Shares, Apple and Netflix

Lets have a look at three interesting stocks…

SPDR Gold Shares

Since my glorious review of SPDR Gold Shares the opposite of my prediction has happened. The stock went form 120 Us-Dollars down to currently 117 US-Dollars . Both the 5 days EMA and the 10 days SMA have been lost. Furthermore, the RSI (48) and MACD yield bearish signals. A cross of the 10 days SMA under the 50 days SMA seems possible indicating a definite bearish signal. Not the best start with this stock.

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Apple

After watching Apple for a few weeks and seeing it climb almost 5% I got greedy and purchased some stocks of Apple. As I elaborated on in a previous post the crossover of the 10 and 50 days SMAs seems to be a strong indicator for this share. Additionally, the 200 days SMA has recently been broken and the price trends above the 10 days SMA. Lets see whether the trend can be uphold.

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Netflix

Finally we are back at my favorite stock, Netflix. The stock has recently experienced strong short term momentum and broken through the important 200 days SMA. Furthermore, the stock is trading above 10 days SMA and 5 days EMA. The trend seems strong currently and signs are on bullish!

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So lets see how these three stocks develop in the coming weeks. Maybe this time my analysis had some merit.

Best,

Nils

Indicators lining up

Ok, I admit it!

My stock picks so far have performed rather less than more successful but why stop trying? After all I confessed in the very first post that I would be willing to invest my 10000+ hours. So, lets try again.

Next we have a chart of SPDR Gold Shares (GLD) and the pattern seems truly promising. All the indicators (that I know about so far) are lining up and do indicate a bullish signal.

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  1. We are on the right side of the moving averages. The price is above the 50 days and 10 days SMA and the 5 days EMA.
  2. The RSI of 58.1 indicates a bullish signal.
  3. The MACD seems just to reverse, yielding a bullish signal.

While at the moment I might interpret every price move for a reason to buy and the MACD may actually not cross and thus fail to give a buying signal, the current price of 120.03 US-Dollar seems very attractive and I will follow the stock.

Maybe this time?!

Best,

Nils

New highs? No! Back to the stone age!

The next crash is on its way and is it going to be the biggest crash ever! The 2007/2008 financial crisis will seem like a small consolidation compared to the what is waiting for us in the nearby future. Today not just the western world but emerging markets too are in a precarious situation and the unsustainable lifestyle we are leading will make the bubble explode eventually. Most likely we will return to a system without currency and barter exchange instead! So get ready for the apocalypse – after all I told you!

People – an especially economists – love to make predictions and at every moment in time there are people preaching that the end is near. Especially today pessimists crawl out of their caves advising the general public to stock up on precious metals and canned food in preparation for the end. But do they really foresee what is going to happen? If they would be that good at predicting what the markets are going to do they should be immensely rich by now having shorted the 2007/2008 markets.  That´s the problem with economics and economists  (I do study economics).  There is a lot of talk and not too much action.

We just cannot predict the future! But what we can do is have a look at the current trend and limit our risk exposure!

So how does the SP500 behave at the moment? What do the general indicators tell us? As the chart below shows us the index has recovered after its strong sell off in the beginning of the year. In mid March the fundamental 200 days SMA has been broken and furthermore we trade above the 50 and 10 days SMA. The indicators are on bullish! The RSI with 70 however seems to imply and overbought market. Thus, I will wait for a consolidation and then buy into the market if the indicators still fit.

These were my words a few days ago. As can be seen the market action cooled down. While the RSI still is bullish the SP500 closed beneath the 10 days SMA and the MACD is bullish as well. Seems like I pick would have been not optimal.

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Very interestingly, Steve burns did correctly interpret the signal of breaking through the 200 days SMA prior to the recent high in his blog:

http://www.newtraderu.com/2016/03/20/tired-bulls-spy-chart-32016/

http://www.newtraderu.com/2016/03/13/bulls-won-spy-chart-3132016/

We see, technical indicators are no ripoff but useful quantifiable facts of current trends.So, lets wait for an entry signal and then join the uptrend!

Best,

Nils