The boring market report – December 1st2020

Sideways markets are the ones that hurt most traders because trend indicators fail miserably, stop are too far or too close, and those playing with highs and lows are punished when prices go out of the horizontal channel. As I warned in last post, those wanting to short Tesla had absolutely no chance going downwards. So it went up!

Bitcoin has also continued its rally towards new highs, the 2020 performance is now close to 200%! With such performance, you can trade only a small line of BTC and keep your money in safe harbor!

Speaking of safe harbor, Gold is now on the lips of many value investors because of dollars, euros, … printed by tons. Gold has been going down recently, stopped 8 steps from the stop, then went through… If it stops in 3 steps (1680$), we will have a nice hidden divergence, which will likely push Gold towards new highs!

Indexes like Nasdaq are still moving sideways. Volatility is pretty much like Tesla, quite high. So the northbound exit option must be privileged.

Last but not least, cannabis is waking up at last. Look at that beautiful Aurora Cannabis chart:

That’s it! I will start a new series of posts for beginners or almost. We will start by taking a fresh look at Andrew’s pitchfork. Until next time, trade safely!

The boring market report – October 28th 2020

Looks like the markets do not welcome this second coronavirus wave, not the wave itself, but rather the bad and worst decisions made by politicians! You should never panic because of sudden but announced meltdown, and again stick to our sound models!

S&P500: this will be the last time I am using these reaction lines (drawn end of March!), as the accuracy for top prediction is now failing. No big deal. Always double checking what the random walk model is telling me.

Following previous post, you see the MACD has been under its signal for a while, indicating downside pressure. First objective is 3094, due after the US elections, so another 10% to go. If might go further down, pending on lock-down conditions, as they say. The truth is that the market will go up if there are buyers, lock-down or not! If investors think all the GAFAM will be at bargain price when S&P500 reaches 3100, then market will resume up trend.

The SOX (or Semi-conductor Index) usually anticipates what’s coming up. No light to expect for now, as there is a divergence with MACD.

Speaking of Apple, the kagi graph is showing interesting things. A 3-buddhas top appeared by mid-September but because of strong uptrend, I deferred my idea of shorting Apple. Then a double window bottom has formed, a strong indication of further uptrend. Markets may be in bad mood for next few days but quarterly results may bring back confidence! Remember that the recent growth of Apple is before all due to buyback, a gift for shareholders who don’t get too much dividends otherwise. You might be bullish because of the upcoming 5G trend on smartphones, but this stock is overvalued somehow. The question is compared to what? There is no absolute reference!

Gold has reached its downward objective end of October but may still go down some more, which is very good opportunity to buy. Rationale: as countries are printing more money by tons, the value of money goes down, and Gold which is limited in quantity can only go up!

I wrote two weeks ago you should look at Bitcoin. It has gone up almost 20% already. On the way to 100k$!

That’s it! Until next time, trade carefully!

The boring market report – September 4th 2020

It had to come, it is there at last. The correction!

Yes, we can take this opportunity to go after Tesla or Apple, …. but we need to wait for markets to go back up again.

The current correction mirrors a messy period from August 2019, as highlighted by the orange circles. Of course, the trend is still up, but market will continue to be jumping up and down until next reaction line!

Situation is a bit more tricky for Bitcoin. Price targets are reached as usual on warning line levels, you just don’t know which one prices will stop at. Price target for the down move are 10250$, 9400$ and 8600$. Up trend will undoubtedly resume then as many professionals advise to buy some to protect yourself from the (virtual) printing of dollars by billions!

Gold is still above its random path, so we assume horizontal consolidation for now and we keep buying some more, for the same reason as Bitcoin.

That’s it for today. I will cover new subjects over the next weeks, from portfolio management to more technical or philosophical subjects. I will propose a tiny portfolio (10k$, 3 lines or technical volatile stocks) which will be updated on weekly basis.

Until next time, trade safely.

Gone fishing…. The boring market report August 5th 2020

I have plenty of subjects to discuss in September and later. I want to spend three weeks far from Internet, the worldly (bad) news, … I will monitor my open positions, but not much more. I will not validate the hundreds of comments that I have undoubtedly when I come back!

S&P has gone through the last reaction lines quite harmlessly. Next one is not drawn yet but is much further away. This rally can continue for a while, unless something wrong happens! Your stop should be around 3100.

As written some time ago, you ought to have gold. Dollars and euros are printed faster than trucks can transport them where needed, so their value to the good old Gold is going down, so Gold goes up. Turbo has even been clenched for the pleasure of traders and investors alike.

If there is something that has been very pleasant these last days, it is the post-halving Bitcoin rally that has started. At last! Many other cryptos either anticipated (Etherum) or are following (Litecoin, Ripple). My portfolio shows massive gains in just a few days, and it is very likely that the rally will extend for a long time.. for the same reason as Gold!

You need to monitor the progress of virus and countermeasure applied in each country to anticipate a possible slowdown on stock market. Gold and cryptos may or may not correlate with stock market like during containment. Each needs specific attention.

That’s it. Until September, trade safely. Stay away from virus and wear a mask if needed: it is only a matter of probability, you are decreasing the chances to get sick. So be bullish on masks and bearish on the virus!

TTYL

The boring market report July 23rd 2020!

DragonTrader is still on vacations until end of August, but market commentaries still come for another two weeks. Totally free as usual!

S&P500 has crossed blue down sloping reaction line since last post. The money is still flowing in, so I would not be surprised movement still continues for a while. Should it reverse during my August vacations, please alert so everyone can profit from a little short!

As the Fed is printing lots of money, it flows in the stock market but also in Gold and possibly some cryptocurrencies as well. Diversification? Possibly. Or you need to see the other way round: as you print more money, the value of money decreases, so price of Gold goes up! Volume of available gold does not change a lot year over year, and countries wealth (GDP) is going down due to little virus, so gold is safe harbor! See, if dollar has been disconnected from Gold more that 45 years ago, people still think in gold terms!

It is even better for Silver, but you need to ask a drunk economist reason for this strong uptrend!

I was moderately bearish on Bitcoin but the graph starts to show something different. First, the money is flowing in as shown by accumulation distribution indicator and there is now a hidden divergence with WAD. Makes me think that an up move is possible, the post-halving rally everyone has been expected for a while! Tip: look at Ethereum, might be even more interesting!

That’s it. Until next time, trade safely!

The boring market report July 15th 2020!

Dear readers, passers-by and friends,

We are middle of the summer and your goal is to get rest, enjoy the sunshine, get enough sleep and stop worrying about nothing.

I got very genuine comments over the last months, most positive, and overall very motivating. Now I see many comments copy / pasted while changing one word by an other, but since I have elephant memory, I remember every comment written previously. Please take a little time to think before writing! I also enjoyed the worst comments a blog can get “you text is so full of misspelling that it is not readable, I am very disappointed” (sic, I had to fix the spelling): you are excluded, man, do not come back!

Let’s get back to market summer conditions. S&P500 is about to reach the 2 downward sloping reaction lines. Will it go through unhurt? We will know in coming days. I have moved my stop up to 3050.

Bitcoin is also lazily resting on the random path. I am an unconvinced bear, eying at the bottom indicator to come back up the zero line. Wait and see!

Gold (or even better Silver) is the place to be for now (outside stocks). No cloud in the horizon, for a golden suntan! A stop at 1750$ seems a good idea to me!

That’s it. Until next time, trade safely!