Drawing a line in the sand keeps me safe
I have been away in China for a couple of weeks, and have been watching the stock market gyrations at a distance. I am very happy to have been out of most sectors of the markets in recent weeks, and really, this is the whole point of my style of trading: to avoid the massive downswings that happen periodically in the markets, because it takes a lot of time to recover gains that have been made over months or years! Yes, this technique does periodically produce false signals, but most of the time it gives a 'line in the sand' beyond which I am indicated to either enter or exit a sector. Having a strategy like this really helps to stop me from being caught, like a rabbit in the headlights, paralysed with fear, yet unable to exit from a trade that is moving against me. Believe me, I have plenty of experience of being in that position, and do indeed still hold commodity positions that should have been exited a long time ago!
So, lets have a look at the various financial sectors and see how they are currently doing.
Shares. You may recall that I follow two investment trusts to give me exposure to shares: My first trust is an internationally diversified trust that gives me exposure to global markets. This is definitively on a SELL signal. I do not hold any shares in this trust at the moment. It did give a false 'buy' signal when it's share price moved above the 52 weekly MA a while back, but two weeks ago it moved sharply lower, below the 52 MA, triggering a sell signal.
The other investment trust that I follow in order to give me exposure to shares is a trust that holds smaller companies. This is a much more focused investment trust, and as such, it tends to either do very well, or very badly. Although this sounds like a bad thing, it is actually good for a trend-follower such as myself, because it tends to have more definitive signals. In other words, it's share price crosses the 52MA less often. There are fewer false signals. A more generalised trust, whilst giving exposure to, and therefore being influenced more by, international prices, tends to produce a more 'average' result. Anyway, this trust has been doing very well up until two weeks ago, when it fell sharply. It did not, however, trigger a sell signal. If I had owned shares in this trust, I would still own them, but sadly I don't!
Bonds: I am not currently invested in bonds. Bonds tend not to be very 'trending' in their pricing, and are probably not very good for trend trading . My current thought are to invest in a variety of bond ETFs that are based on bonds issued in different currencies. Currency wars are possibly going to be a feature of the financial future, and if all of my bonds are in sterling, for instance, and sterling devalues, then my bond values go downhill. I will update you about my progress with this!
Property: Definitely on a SELL signal. This signal was produced eight weeks ago. prompting me to sell my property investment trust shares. This share price rose up again to 'kiss' the 52MA, but then rebounded down again. losing 10% of its value in the past couple of weeks:
Commodites: This remains on a SELL signal . The commodity investment trust that I use to follow commodities is still marching resolutely downwards:
Gold: Whilst the gold price has risen somewhat in recent weeks, it is not enough to trigger a buy signal yet....
Forex: My two long (BUY) forex trades are progressing nicely, the Japanese Yen appears to be strengthening against the US dollar:
and the Swedish Krona also appears to be strengthening against the GB pound sterling:
If you wish to have more information about exactly what I trade and how I do it, then do consider becoming a member of my website!
Of course, this is all about what I am doing and should not be taken as financial advice! If you want financial advice, then please consult a qualified financial advisor. I am not a qualified financial advisor! If you have any doubts, please read my disclaimer.
To see a video of these opinions click here.
So, lets have a look at the various financial sectors and see how they are currently doing.
Shares. You may recall that I follow two investment trusts to give me exposure to shares: My first trust is an internationally diversified trust that gives me exposure to global markets. This is definitively on a SELL signal. I do not hold any shares in this trust at the moment. It did give a false 'buy' signal when it's share price moved above the 52 weekly MA a while back, but two weeks ago it moved sharply lower, below the 52 MA, triggering a sell signal.
The other investment trust that I follow in order to give me exposure to shares is a trust that holds smaller companies. This is a much more focused investment trust, and as such, it tends to either do very well, or very badly. Although this sounds like a bad thing, it is actually good for a trend-follower such as myself, because it tends to have more definitive signals. In other words, it's share price crosses the 52MA less often. There are fewer false signals. A more generalised trust, whilst giving exposure to, and therefore being influenced more by, international prices, tends to produce a more 'average' result. Anyway, this trust has been doing very well up until two weeks ago, when it fell sharply. It did not, however, trigger a sell signal. If I had owned shares in this trust, I would still own them, but sadly I don't!
Bonds: I am not currently invested in bonds. Bonds tend not to be very 'trending' in their pricing, and are probably not very good for trend trading . My current thought are to invest in a variety of bond ETFs that are based on bonds issued in different currencies. Currency wars are possibly going to be a feature of the financial future, and if all of my bonds are in sterling, for instance, and sterling devalues, then my bond values go downhill. I will update you about my progress with this!
Property: Definitely on a SELL signal. This signal was produced eight weeks ago. prompting me to sell my property investment trust shares. This share price rose up again to 'kiss' the 52MA, but then rebounded down again. losing 10% of its value in the past couple of weeks:
Commodites: This remains on a SELL signal . The commodity investment trust that I use to follow commodities is still marching resolutely downwards:
Gold: Whilst the gold price has risen somewhat in recent weeks, it is not enough to trigger a buy signal yet....
Forex: My two long (BUY) forex trades are progressing nicely, the Japanese Yen appears to be strengthening against the US dollar:
and the Swedish Krona also appears to be strengthening against the GB pound sterling:
If you wish to have more information about exactly what I trade and how I do it, then do consider becoming a member of my website!
Of course, this is all about what I am doing and should not be taken as financial advice! If you want financial advice, then please consult a qualified financial advisor. I am not a qualified financial advisor! If you have any doubts, please read my disclaimer.
To see a video of these opinions click here.
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