Stock Market Report wk# 27

An extremely quite week for me this week and that suits me just fine.

There is no need to force yourself to trade every day to be a success in the financial markets.

If you trade like me at the end of each day after the markets have closed, then there is simply no need to trade every day; if the set ups are not there, don’t take them.

Some of my losing periods in the early days were characterised by taking weak set ups in an attempt to remain active in the stock market. This type of boredom trading can eat away at your equity if it is not held in check.

This week, I was unable to determine any meaningful market direction one way or the other as the FTSE is consolidating at support. Also a lot of shares are exhibiting reaction rallies with no volume. So I decided to sit it out and see what my weekend analysis throws up for next week’s trading.

Stock Markets This Week

Although sovereign debt has not gone away, the main area of focus this week was economic growth and inflation as well as the perceived inability of national governments to be able to do anything about it; interest rates are still at record low levels and any more quantitative easing would push up the rate of inflation which would hit hard working families who are already struggling to cope with the cost of living throughout Europe and America.

The solution.

Well in Europe, its seems to be more integration, especially for those countries who are heavily indebted. In the US, it seems to be well I’m not sure. What hasn’t helped the US was the debacle in Washington last week over the extension of credit. In the absence of political solutions to America’s economic problems, all eyes are were on the Federal Resereve who announced that interest rates would stay at record lows for another two years which helped to boost the recovery in financial markets worldwide.

Will it be enough to restore growth and calm the financial markets? Only time will tell.

My Trades

The first of three closed positions this week is JP Morgan Emerging Markets (JMG). Essentially all three positions were the shorts I had left open from the previous week; I lowered the stop losses on each of the short positions in an attempt to ensure that I came out with a profit from all of them. Entered JP Morgan short at 548.85 stopped out at 519.99.

Next was IP Group (IPO) entered short at 46.98 stopped out at 39.34. I must say that I was shocked at the velocity of the fall in the share price of IP out of the three. It seemed as if there was no level at which the price would fall on one particular day. This was the catalyst behind me lowering my stops, more to protect myself against the volatility as well as ensuring profits.

Lastly I entered United Business Media (UBM) short at 499.86 and was stopped out at 475.47. United was more stubborn in its falls to new lows but I happily took profits once my profit target had been reached and I’m glad I did because soon after the financial markets began to rally and I’m certain I would have been stopped out at losses on my shorts.

So into the weekend I have no open spread bets on as I am waiting for the stock market to provide direction and reduced volatility. Some analysis I have already begun has thrown up one or two trade ideas which I will look to open next week.

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

 

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