Monday Commentary\Market View
Pre-open
(uploaded Sunday afternoon)
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NOTICES:
The URL of this column is likely to change quite soon, if this occurs before you realise simply find the new one by clicking the "market" icon from the front page of www.thewelshwizard.com at that time.
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Next page update after today will be two weeks today, as next Monday is a UK Bank Holiday.
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Welcome to new Readers from Hungary and Qatar.
There appears to be virtually no commentator left who is not insisting that a market crash is imminent, yet the truth of it is that markets can fly up or down hundreds in a day or thousands in a month and all that is happening is large range price oscillation inside a multi sideways market, of twelve years duration so far and perhaps another twelve to go, with such dramatic moves creating fervour among those who jockey to become the big callers of bull or bear markets which simply do not prevail.
It is always interesting to note that almost all of the seers spouting off each week are non traders, and most of the very few who are receive free trading capital from the large subscriptions collected from feeding the people with what what they want to hear as opposed to what they need to know. There are a few good guys out there but make sure you realise who they are before responding to their mantras of come into the parlour said the spider to the fly.
On any one to one basis, it is often an arduous and sometimes futile task to convince another person of anything much but once you are, instead, addressing a crowd it becomes an easy affair to convince so many of anything you like. History provides amble proof of that, one of the most extreme examples being that of a man with a moustache and strange hairstyle who stood in a public square, only about seventy years ago, and persuaded an entire nation to set off and conquer the world, with all and any butchery required to fullfil the task. Once you understand this principle you know everything you need to know about crowd psychology; but in trading the markets the only psychology you actually need to know about is your own.
Of course we live in uncertain if not very wobbly times, with one half the world explaining why a recovery is in play while the other half insist we are about to time travel back to 1929. The truth of it is likely somewhere in between, as usual. Nations generally continue to increase their debt and pray that a new boom arrives to save the day, and those enterprises still standing are increasing their returns by both cutting costs (people) and wherever possible raising prices, this combination makes economic recovery more delayed than accelerated, as inflation eventually becomes replaced by deflation to survive dwindling demand from increasing unemployment.
Therefore, the potential for great troubles undoubtedly lies ahead, and those who are unable to collect castles and jets should prepare for that potential by cutting back on what they want and focusing instead on what they need, (but this should not include getting rid of the pets which are very cheap to keep), to remain in the strongest possible bunkered position to weather the most fierce storms which may arrive. In plainer terms, what goes out must be made to become less than what comes in whether applying to a nation or an individual.
Returning to the main theme of this column, Trading should be less concerned with what lies around the corner than what is happening right now and dead ahead. If, for example, someone is a positional trader of Shares then there are always shares going up and going down, buy the ones going up or sell\short the ones going down and apply good risk and money management is what you do, regardless of the potential dates of the end of the world. If, on the other hand, you are a Daytrader then focus on the day in hand and don't worry about tomorrow until tomorrow comes and when it does don't worry about it anyway because tomorrow has then become today.
Far too many approach the trading business with the idea of finding the ultimate tools of prediction and high degrees of near certainty, and every now and then such a scenario does present itself but, for most of the time, we must make do with mere probability in place of prediction and much uncertainty in place of certainty and thus we must all end up in the same place, i.e that of learning to (a) recognise whether price at this moment in time is rising or falling and (b) practising risk management techniques in case the conclusions of our observations are entirely wrong. The skill of those two things make for 90% of everything needed to be able to Trade, without losing all your shirts, and becoming best placed to make gains if and when the force is with you. Any other way of approaching trading simply does not work, regardless of whether your entries and exits are derived from reading the charts, the numbers, the news or the tea leaves.
Another first day of a new week begins and unto the breach we go. A bounce or a rout? Well this desk placed its bets on Friday and is not remotely concerned about being right or wrong because if wrong the total risk is pre-calculated to be proportionately small, and by approaching trading with an overall set of rules the end of the week should, as usual, end up with more pounds than what it started with. Isn't that what Trading is?
Pivots (for Today)
Pivots (for the Week)
| S3 | 5085 | S2 | 5120 | S1 | 5160 | P | 5195 | R1 | 5234 | R2 | 5269 | R3 | 5309 |
| S3 | 4913 | S2 | 5034 | S1 | 5116 | P | 5238 | R1 | 5320 | R2 | 5441 | R3 | 5524 |
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Weekly chart of Footsie Futures Contract up to the close of Friday:-
Daily chart of Dow Futures Contract up to close of Friday:-
Forex:-
The upward bias continues, with the Footsie now 22 points up on the session so far, though speed of market remains very slow reflecting the tail end of summer holidays.
The clock strikes noon to end this first morning session of the week in which an upside bias has prevailed almost from the get go, albeit in a manner more akin to a crawl than a sprint.
The Footsie Contract has seen 58.5 points of range traded to a morning high of 5,240.5, settling at noon for 5235 to better last week's close by 36 points.
Having sold out, earlier this morning, the overnight\weekend long position in Dow Futures for a gain of 45 points, and going square on Footsie Futures after netting from this morning's scalps another 32 points, this trading desk is now finished for the rest of the day.
Thus, a calm and profitable start to the week offsets the grey mood brought by relentless August rain, and other than an end of day summary around 9pm, good afternoon.
2100hrs Close *
A new term from the trading desk here, "halfdaytrader" instead of "daytrader" as banking a week's pay in the morning and taking the afternoon off to pursue other things surely beats most other jobs, and not a single elliot wave or technical indicator needed to do it either.
The afternoon session for Dow Traders was akin to watching a dead man walking in cement playing with a short stringed yoyo right up to around the last half hour when some rapid slippage arrived.
The Footsie Contract had a largely good day, eventually making a high price of 5,266.50 with the morning low unchallenged, making for 75 points of traded range intoto, yielding only in the final hour to make a more modest up day close than might otherwise have been the case, of 21.5 points.
Time now for a glass of fine red wine and an equally fine cigar in front of BBC2's Dragon's Den. Same time, same day but in two week's time then (Uk Bank Hol next Monday) and remember that as far as markets are concerned just because they sometimes get calm does not mean there are no crocodiles about, and to trade efficiently and consistently there are three things to know off by heart: 1. the rules of the game 2. the correct stakes and 3. when to quit.
Free E.O.D Charts:
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |
| 14 | 15 |
Recent Interview -
DAILY chart as at 2100hrs close*
| Open | 5216 |
| High | 5266.5 |
| Low | 5181.5 |
| Close | 5220.5 |
| Vol | 73k |
| Range | 75 |
| Change | 21.5 |
Although official close\settlement time is 4.30pm, Contract trading continues to 9pm which for analysis purposes is the time data used on this page.
Today's Markets :-