Tuesday, 1 January 2019

Disclaimer

All opinions expressed on this blog are the individual’s personal perspective and cannot be interpreted as a Buy/Sell indication!

It is strictly for informative purposes only!

Monday, 31 December 2018

MARKET AND/OR SHARE DIRECTION / MARK EN/OF AANDELE RIGTING




GROUP DISCUSSION:

HOW CAN I ANTICIPATE IN WHICH DIRECTION THE MARKET AND/OR MY SHARE/S MAY GO?

AFTER ANALYZING THE CHARTS, WHAT IS MY CONCLUSION?

WHAT HAS THE FEELING IN MY GUT, GOT TO DO WITH ANY OF THIS?

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Hendrik de Jager.







Friday, 15 June 2018

ALSI, J200 and the TOPI

The All Share Index (ALSI), is the overall market barometer and found in the J203 index. The J200 is a JSE index derived from Top 40 shares and the TOPI is the trading instrument based on the top 40 shares, with a little tweak.
 
When trading the Top40 instruments CFD's or Single Stock Futures, you need to zoom in on behavior.  Below we have created two graphs based on the daily high and low price movement on the J200 index.  This can be used as a volatility indicator or just to find the average to set expectancy when trading the instruments.  It also highlights the change over time.
 
 
 
More information about the constituencies can be obtained at the JSE on their website at: https://www.jse.co.za/services/market-data/indices/ftse-jse-africa-index-series
 
Another method might be helpful to draft a correlation graph on the differences between the price chart and the moving average. From this we can find or determine when to change direction or not to get involve on the wrong side of the market. From the data below (up to 14 June 2018) we can clearly seen not to get involved on the long site, but rather change direction from long to short.
 
 
Taking the Big 5 from the index, the market movers, we can clearly notice the impact they could have. About 50% of the movement.  The top 10 or 12, 75%.  These stocks needs a close eyeball.
 
 
 
When adding the top 5 stocks together and creating a referential index, the following graph represents the below result.  Though this picture is very bullish, it did not implies no short term retracements. Rather what to expect in the days / week to come.  The correlation graph is more reliant to short term trading where we can use the below info as the underlining direction.
 
 
When comparing the Top5 to the J200 we notice the same picture differently.  The Head-and-Shoulder have not played out on the J200, where it was anticipated on the Top5 chart.  But taking the correlation picture into account, we realises that it might not happens tomorrow (15 June 2018).
 

 
Playing around with the data and information, all add up to a picture and feeling for the market.

Trade with caution as the markets are very unstable and uncertain.
@Duplo123 or join us on Skype

Thursday, 14 June 2018

Trade like a Pro

Trading is the name of the game and the game is to Buy or Sell. The players are the Bulls and Bears. The playing field is between two lines and played from one to the other side.  Between Support and Resistance, the goal lines.  When playing with the Bulls and Bears on their playing field, you need to correctly identify the lines.  To score, you need to act at these lines, the goal line.  The actions are to Buy at Support and Sell at Resistance.  The battles between Bulls and Bears take place at these zones.  It’s bloody, fearless and only the Smart money, the pros and those who know the rules of the game, that are winning.  Rules like Money Management, when to sit back on your hands, when to Buy or Sell and when to take a Loss or a Profit.
 
To compete with the pro's, you need to think and prepare like them. Anybody is welcome on the trade playing field, but keep in mind who the opposition is. Think of it as you are running onto the rugby field and your opposition is the All Blacks. You might just get hurt.  Yes, on the trading field it's not fiscal, but you might just lose your money or self-confidence.  You’re thinking, not me. I'm not one of the statistics.  I'm born great?  I'm a great trader from Day One?

Tiger Woods was not born great. He has a daily practice routine:
  • 6 AM: gym for 90 minutes
  • 7:30 AM: breakfast
  • 9–11 AM: hit balls on practice range
  • 11–11:30 AM: putting
  • 11:30 AM–12:30 PM: play 9 holes
  • 12:30-1 PM: lunch
  • 1–3 PM: hit balls on practice range
  • 3–4 PM: work on short game
  • 4–5 PM: play 9 holes
  • 5–5:30 PM: hit balls on practice range
  • 5:30–6 PM: putting
Not convinced yet that you are not going to be a great trader on Day One? What if you did the following before a trading session to gain experience? 

  • Plan and execute your trade as the first experience.
  • Made detailed notes in your trading journal — that’s two experiences.
  • Discussed this setup with others — now three experiences.
  • Replayed the trade in your head — and four.
  • Made and watched your video recording of this trade — now five.
  • Met in a training room and talk with a group about this trade — and six.
  • Visualized making this trade — and seven.
  • Practiced this trade on a dedicated simulator — and 8 and 9 and 10.
With just this one trade, you can turn one trading experience into 10 plus. Developing a daily learning schedule, can help transforming one trading day of experience into 10. Pickup on your experience 10x faster. Become a pro to play with the pro's. Practise and prepare like a pro, trade like a pro.
 
 

Saturday, 31 March 2018

SAVI - T40

Many participants are aware of the popular TV series “fear factor” and the various challenges the participants are required to overcome.
 
What is volatility? When we look at the share market, the traded volatility is a measure that describes the tendency of the market to move either up or down and to what extent the anticipated move could be. In essence it is a fear factor. If the price jumps large amounts in a short space of time then the volatility of the market will be high. If the market movement is small, steady and predictable then the volatility will be low.
 
The intension is that this index becomes a benchmark indicator for economists and market participants to gauge the fear in the market. This index could therefore assist with any forward planning decisions to ultimately ensure price risk management for your white maize business.
 
The SAVI was launched, in 2007, as an index designed to measure the market's expectation of the 3-month implied volatility.
 
The SAVI was updated three years later, in 2010, to reflect a new way of measuring the expected 3-month volatility. The new SAVI is also based on the FTSE/JSE Top40 Index, but it is not only determined using the at-the-money volatilities but also using the volatility skew.
 
 
As a result of the new SAVI calculation method the following benefits are present:
  • The new SAVI calculation includes information of the volatility skew which is in line with the fact that volatilities do not only depend on the time dimension, but it also depends on the strike level dimension. The new SAVI therefore fully incorporates all the dimensions of volatility.
  • The new SAVI calculation method is a weighted average of traded option prices, and thereby abandons using the Black-Scholes implied volatility directly. The result of the modification is a model-free volatility index.
 
How to Play Market Volatility
 
And like a thermometer, there are specific numbers that tell the market's story.
 
A level below 20 is generally considered to be bearish, indicating that investors have become overly complacent. Meanwhile, with a reading of greater than 30, a high level of investor fear is implied, which is bullish from a contrarian point of view.
 
The smart thing to do then is to wait for peaks in the SAVI above 30 and let the SAVI start to decline, before placing your buy. As the volatility declines, stocks in general will rise and you can make big profits. You see it time and time again.
In fact, the old saying with the SAVI is, "When the SAVI is high, it's time to buy." That's because when volatility is high and rising, that means the crowd is scared. And when the crowd is scared, they sell, and stock prices fall dramatically, leaving bargains for money making traders.
 
But it's not just a reading of "under 20" or "over 30" that works with the SAVI.
 
That's a bit too simple.
 
On top of those levels, smart traders also add the price movement within the Bollinger Bands into the mix or apply Moving Averages. Of late, that has been one of the key tells in predicting the market action.
 


As fear and greed are relative concepts, it can not just be defined by a number 20 or 30. Therefor make use the median or moving average cross-overs.
 
Looking at 2016, the fear factor was above the moving average and at high numbers on the SAVI index. Comparing the same time frame with the Top 40 J200 index, the market has traded sideways with heavy volatility (in a large range).
 
Doing the same analyses for 2017.  The fear was past tens, SAVI dropped below these numbers, median and moving average and the market was on the run.
 


Trade with caution as the markets are very unstable and uncertain.
Contact me @Duplo123 or join us on Skype