Stock Market Report wk#26

Wow.

What a week to start a new stock market portfolio!

I could not have picked a worse week to begin trading a new spread betting portfolio. My thanks goes out to politicians in America and Europe for that.

I could so easily have been chopped up in the markets this week to the extent that I could have ended the week flat (no open trades). Instead I hung on in there (foolishly?) in the conviction that my trades are sound, I am following my trading plan and there are stop losses in place to get me out fast should things take a turn for the worse (which they did); more on that later.

The Stock Market This Week

Debt, debt, and more debt.

First it was the banks. Now it seems national governments are over leveraged and need bailing out from other national governments. You do wonder when this cycle of bailouts will unwind. It will be taxpayers footing the bill that’s for sure.

Do you remember certain politicians in this country comparing our economy to that of Italy and Spain? Somehow I don’t think we will be hearing them making the same kind of comparisons. 🙂

In all this credit carnage you have to find something to smile about and its this: Nick Leeson, AKA The Rogue Trader who brought down Barings Bank formally apologised to his old boss this week. I like seeing this story surface from time to time to remind me never to fight the predominant trend.

In other news, the soap opera in Washington this week played havoc with stock markets everywhere; the deal between Democrats and Republicans was not enough to stave off a gargantuan sell-off throughout the world. Its not all their fault though. We have massive debt problems in Europe.

For me, all this noise and mayhem is simply an opportunity to trade. It is definitely not the right market conditions for the uninitiated.

My Trades

As I mentioned in my post on Monday, I was surprised at the amount of long and short positions. With hindsight, it was only natural to have a balance of longs and shorts because of the massive sell-off that occurred later on in the week.

For example my first closed trade was Stagecoach (SGC) which I entered at 257.67. I thought I was being clever by entering this trade early instead of waiting for the price to let me know when to enter.* As a result I was stopped out at 244.66 from a trade I should never have been in in the first place.

Next came Talvivaar Mining (TALV) which I tweeted about his week.

Nice trade set up which gave me confidence to enter this trade early also getting in short at 426.34. Due to the current volatility, I have set profit targets and Talvivaar’s was reached in quick time at 349.96 later on in the week.

I was stopped out of both UK Coal (UKC) and Phoenix IT Group (PNX), minus 6.14 and minus 27.55 points respectively. I suffered some slippage on my stops due to the huge sell off across the world’s stock markets; they were both long positions. I decided also to cut my remaining long position in Record (REC) since the stop loss had not been reached and wanted to get out early; any further downward momentum to the markets would now not present a danger to my portfolio.

*Email subscribers get additional commentary about my closed trades – its free.

All trades listed above are closed trades as I do not make public open positions.

 

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