Stock Market Report wk#38

This week saw the world’s leaders still trying to figure out what to do with Greece to stop it from defaulting on its debt and therefore allowing it to stay in the Euro.

One thing I have learned this week is to trust my own judgement when it comes to trading the UK stock market. All to often I go through a process of due diligence on a company chart with a view to taking a position and then some economic news announcement pours cold water all over it.

I do like to use macro economic news as a backdrop to my trading but due to the current turmoil we are experiencing, the news ensures that one day price spikes either up or down make it difficult to stay focussed on what my own analysis concludes. Check out my trading results below to see how this has had an influence on my trading with the use of stop orders.

Stock Markets This Week

The IMF warned this week that it does not have enough cash to bail out larger Eurozone countries if the debt risk spreads. This came after an internal review at the IMF to see how it could support countries who find themselves in financial difficulty. Better sort out Greece then otherwise France – who have massive exposure to Greek debt – would be out on a limb.

Speaking of Greece (how couldn’t I in current economic circumstances) it appears that Greece is still receiving bailout money agreed from last year but will not receive any more unless it can prove to inspectors that it is keeping up with its spending cuts.

I don’t know about you but it seems as though politicians are fire fighting against the debt and financial crises and now there is talk of Greece being allowed to default on at least some of its debt to ease the burden not only on Greece but also to the world’s institutions who are able to help bail it out.

The European Financial Stability Mechanism – an idea designed to assist countries and banks that are in trouble – has yet to be agreed by a majority of national governments. Hoses are at the ready but the water supply has not been turned on.

This is on the back of a warning from the IMF that the global financial system is more vulnerable now than at any time since the 2008 financial crises.

Here is a neat little article from the IMF itself including a video from a financial boffin explaining what has spooked the markets over the last 6 months and what they say ought to be done to by national governments to solve the debt crises.

Still, on a brighter note, Bill Gates can pat himself on the back reaffirming himself as the richest person in the United States with Warren Buffet coming in second. My guess is that they do not short shares that pay dividends. 🙂

Oswald Grubel the chief executive of US is not as happy as Bill though having to resign this week over the rogue trader fiasco which has led to an alleged $2.3 billion loss for the bank.

My Trades

This week, I have seen two new positions being opened from stop orders that I placed last week. A stop order allows me to advise my spread betting provider to open a spread bet once it has reached a price of my choosing.

This helps me to eliminate any guesswork involved in trying to find the right price at which to buy a new spread bet. In effect I am allowing the market to decide for itself whether or not I should enter new positions.

This of delegating of of market entry works for me because it usually means that I open a new spread bet in the direction that has price momentum. There is no point trying to guess which way the market will go.

Another reason why I use stop orders is because of the way the markets are reacting to news releases. The wild swings we are seeing in price mean that trying to find the right price at which to get in or out of a trade becomes a trickier process. Stop orders eliminate the need for what in effect becomes complicated guesswork.

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

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

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