Daily Market Wrap – Fri 20 May, 2016

Friday Weekly Market Wrap

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Cory FleckAl Korelin

  1. On May 20, 2016 at 2:23 pm,
    Bob UK says:

    There’s next to nothing holding up the conventionals IMPO. I still think that another August 2015 or January 2016 will happen sooner than later.

    That will be the buying opportunity IMPO and then the markets will go to new highs by the Autumn.

    It wouldn’t surprise me to wake up on Monday and discover one or two big dumps of gold. But, otherwise, gold is holding up surprisingly well all things considered re the interest rate news this week.

    • On May 20, 2016 at 2:48 pm,
      Silverdollar says:

      Sounds like a reasonable idea, Bob. Especially if they raise rates in June. Emotions alone will cause the conventionals to react negatively, at least for a short spell.

  2. On May 20, 2016 at 2:25 pm,
    LPG says:

    Interesting thoughts Bob.
    Given your thoughts, I guess you’ve got the whole week-end to prepare potential trades ๐Ÿ˜‰
    Until then, have a good WE !

    • On May 20, 2016 at 2:31 pm,
      Bob UK says:

      Ha ha ha LPG!

      • On May 20, 2016 at 6:03 pm,
        LPG says:

        ๐Ÿ™‚ ๐Ÿ™‚ ๐Ÿ˜‰
        I’m teasing Bob.
        But I was a tad serious though.

        Tell you what: here’s a simple suggestion….

        At some point over the WE, spend say 15mn (no more) looking at the charts of the levered ETFs (coz you seem to want to trade them sometimes).
        Focus on the last 10 trading days.
        Try to look for support levels, resistance levels.
        Try to assess if you can see some pattern over a few days etc…
        Try to look at these levered ETFs underlying ETF. For those underlying ETFs, pull a say… 1mth chart or 3mths chart (there’s no need of longer time frames imho).

        If you already think of a trade, think about:
        1) where you could/should enter it (what price level)
        2) what size you’re gonna use (how many shares you’re gonna buy or sell short),
        3) where you’d cut your position if things don’t play out as planned and hence how many dollars you’d end-up losing in the process
        4) where you’d exit your position if things go according to plan and hence how many dollars you can make.

        Focus on the RISK:REWARD for the share price.
        From experience, any trade where the ratio of risk:reward is not AT LEAST 1:2.5 is not worth taking (but that’s me). If you see a set-up where you think you have a risk:reward ratio of 1:3 or 1:4…you might be onto something interesting.
        If you end up with a trade in mind for Monday, WRITE THE DETAILS on a piece of paper.
        Writing the details over the WE is NOT becoz u might forget by Monday… it’s just that it will show you if “Bob on Monday” is really committed to “Bob over the WE” who wrote the details of the trade.

        After you looked at the charts (and potentially went as far as writing details of a potential trade) over the week-end…sit on all of this (ie don’t think about it) until Monday.
        ==> ONLY come back to the charts AGAIN during the week-end if your subconscious worked and you want to double check something or re-look at something. If not, don’t think about it any more.

        When you’re back in front of your computer on Monday, if you thought of a trade over the WE, just look again at that piece of paper. All the details are there. ๐Ÿ™‚


        If you pull the trigger on Monday on a trade, tell yourself that the process matters MORE than the end result. [and if you are scared to loose $$$, again, REDUCE SIZE F-U-R-T-H-E-R]
        When bad trading is repetitive, it’s the outcome of a bad process. With a good process, good results come. Luck can alter a bad process and bring good results … BUT luck is not repetitive… especially w. 3x levered ETFs ๐Ÿ˜‰ Good processes bring good results, although a trade can go wrong coz it was a wrong idea to start with (it happens…).

        Follow a process, prepare trades, reduce the size until you mentally feel comfi w. any potential loss you might occur.
        Overtime, if you do all this, things will be fine.
        And if you miss an opportunity, it’s ok.
        Plenty of them.
        All the time.

        Best to you & wishing you a pleasant WE,


        • On May 21, 2016 at 10:52 am,
          Excelsior says:

          Some very good advice LPG. I like the written plan with goals & targets of a 1:3 trade and then shelf it until Monday and re-examine it. Good stuff.

        • On May 22, 2016 at 9:30 pm,
          Bob UK says:

          Early Monday morning – still in bed – and I have just seen this LPG. I will have a good read of it later this morning when I am awake.

    • On May 20, 2016 at 2:37 pm,
      Bob UK says:

      In all seriousness, I think the conventionals are exhausted and need a plunge down to the mid 1900s on the S&P. Perhaps even to the low 1800 region.

      I think it will happen and I think it will come out of the blue. Something that plays out over just a few days at most.

      But that will be the buying opportunity IMPO as, once over, I can see the markets going to big new highs by Christmas. Gosh, talking about Christmas already. Next week, as Doc would say, will be crucial to see whether we break down or strengthen.

      Gold is interesting. As I said, I thought it would have gone lower. It should go lower.

      I have been keeping an eye – as a hobby – on what is going on with NATO deployments of equipment and men in Eastern Europe and also the clear stepping up in the Pacific by the US of annoying China. I hate to be a doomster but it is like giving a box of matches to a child. One small spark.

      I mention this as I am beginning to think that I should be holding more gold stocks because of the above.

      • On May 20, 2016 at 3:27 pm,
        Birdman says:

        By my reckoning we are going to get another commodities bust by the fall and oil will be backing down the chart again. We are just entering the seasonal strong period for crude by the way so prices may be sticky to up for the next while. Its why I am taking an interest in the small oil companies that seem to be so active…..but I am not expecting any big sell off in oil for awhile.

        I am convinced we are going to get bad news out of China later in the year though. Pencil me into the hard landing camp.

        • On May 21, 2016 at 9:04 am,
          Paul L says:

          Oil is finally showing a strong buy on the weekly charts. It has been a buy on the daily for quite some time. I think it could head towards $60 this year.

    • On May 20, 2016 at 3:18 pm,
      Bonzo Barzini says:

      Hi LPG,
      Tell us more about Alain Juppe’. What is his position on the Moorish invasion of France?

      • On May 20, 2016 at 5:32 pm,
        LPG says:

        Hello Bonzo,

        I don’t really watch “news” and don’t really listen to politicians coz most of them don’t deserve my respect.

        Juppe will bend over to many things (EU, NATO etc…), like many of his peers, be they on the right or the left side of the political spectrum. Hollande has done it, Sarkozy as well. All same.

        And please don’t tell me about Marine Le Pen coz she has Zero – and I mean Z-E-R-O understanding of economics.

        Wishing you a pleasant WE Bonzo – and to everyone as well.


  3. On May 20, 2016 at 2:57 pm,
    Dick Tracy says:

    For the last fifty years the media and the highbrows who rule America have revolted against the rule of America by the businessman. Look at how disillusioned our society has become. Our society has become so one sided, Wall Street now stands in the way of American civilization. DT

    • On May 20, 2016 at 2:59 pm,
      Dick Tracy says:

      That is to say main street has been forgotten, Trump has revived the past and hope for the mainstream. DT

      • On May 20, 2016 at 3:20 pm,
        Dick Tracy says:

        JOBS, JOBS, and GOOD PAYING JOBS, need I say more! DT

  4. On May 20, 2016 at 3:59 pm,
    Dick Tracy says:

    The reality is we are being taken over by an artificial species we have created;