If you thought 2020 and 2021 were bad, well, welcome to 2022. Just when we see a glimmer of hope the rug gets pulled out. Each one of us has to determine what works best for us individually. This post will answer a lot of questions I get. First, here is what I look at: On Wednesday I sent out my Midweek Mkt update. Personally, I was looking at putting in starting positions in Canada on Thursday. Here is what I was looking at and why I ended up doing nothing.
The CDN MKT setup Wed Close. I’ve been trying something in the MKT Timing Graph using what I found I like the 10 and 21 EMA. Also, looking at the 12 and 26 EMA Don Reitsma uses. At the close Wed, we had a PW/UP. GLB RT Kicker and the 10 crossed above the 21 EMA but still no DEW, so it was only going to be starter positions.
So at the open Thursday, I look for the Open Price to be higher than the WED close. I want to see strength continue and like to buy around 11am. Of course, there was a big sell-off Thurs, so I made no trades. Fri saw a flat trading day until late afternoon when the sell-off continued. So for me, I’m continuing to enjoy time off as there is only one thing of interest at this point but it’s broken my heart so many times I’m not too excited but Monday is Valentine’s day so maybe.
Here is what I saw on Thurs and Fri that concerns me. We are seeing some strange things. Not only did the mkts sell-off but so did Crypto. The USA 10 year yield fell hard Fri as well, meaning money was leaving the market and going into Bonds. Usually, when the 10 yr yield goes above 2% money leaves Dividend stocks (Which happened) but with the big move into bonds Fri and the yield falling hard, will money go back into Dividend stocks? Something to watch. It’s like we are cursed. Just when it looked like the bad was finishing ie Covid ending and things opening up again and people out shopping, spending, and travelling let’s throw Truck blockades, Russia/ Ukraine, and Interest rate hikes. Personally, the greater the sale the more money I make so for now I just keep working and making money and when the time is right back the truck up, retire and go golfing. I’ll go into things in a lot more detail in the post below and show profit potential and answer more questions.
Now for the markets:
USA MTI 74 BSR 39 PW/DN ETI Stable
DOW JONES: Failed at the 79 SMA and closed below the 200 SMA on strong selling vol. If it pulls back to the previous low it could be a buy
NASDAQ: Price failed at the previous high and fell hard Wed and Thurs on strong vol
S&P 500: Similar graph to Nasdaq Closed below the 200 SMA and may fall to previous support
MKT TIMING: Fell hard Thurs and Fri. See if it falls to the Jan low
READ Views and Strategy
CANADA MTI 86 BSR 43 PW/UP ETI Stable
PTSE: Broke above recent high but fell back Thurs and Fri to support Vol increasing
VENTURE: Not really going anywhere Strong selling vol last 2 days and RT failed at 1.00
MKT TIMING: Broke above resistance Wed but fell back Thurs Fri. to below resistance. Failed at the 79 SMA once again
READ Views and Strategy
GOLD Had a huge up day Fri but once again failed at the 79 SMA As I mentioned earlier, I want to see it open above the Fri close with continued strength Monday. It’s broken so many hearts in the last few years, the only hope is since Monday is Valentines day maybe we finally get some love.
AUSTRALIA MTI 87 BSR 31 PW/DN ETI Stable
MKT TIMING: Price fell hard but respected support
READ VIEWS (especially for those owning oil stocks) and Strategy
BRITAIN MTI 90 BSR 78 PW/ UP ETI rose 1 point
MKT TIMING: Sold off the last 2 days but respected strong support
READ VIEWS (Important) and Strategy
EUROPE: MTI 93 BSR 1.12 PW/UP Could get a C/UP Monday ETI Stable
MKT TIMING: Price looks in downtrend. Only 1 green candle in last 7 days. Holding Strong support
Read Views and Strategy
THESE ARE CHALLENGING TIMES. HERE IS WHAT I AM SEEING.
To say that these are challenging times to trade is an understatement. Here is what I’m seeing on both sides of the situation:
Retail Traders are scared to get into the market.
COVID numbers are falling and restrictions are easing. People are flush with cash and desperate to get out shopping and traveling.
The Market has a lot of good stocks/ ETFs on sale so at the right time, the returns could be huge depending on how much further things fall.
VIX Rose above 25 This tends to indicate extreme volatility ie easily see market swings of 1,000 points or more.
USA 10 yr Bond yield rose above 2% which resulted in money fleeing Dividend stocks.
Trucker Blockades at CDN Borders affecting Supply Chain issues and greatly increasing Inflation pressures.
Inflation will be a huge issue in 2022. A store in Toronto that gets produce from California said the price went from $300 to $1,200 per shipment and the price is rising daily. This will cause people to decide where they will spend money or take on more debt.
Interest rate hikes. Time will tell the effect this will have on Govt/ Consumer debt and the market.
Russia/Ukraine situation and once the Olympics are over the China Taiwan situation (the 2nd one is key because Taiwan is the biggest Chip maker)
NOTE: The following is in no way a slight on anybody or trying to make myself look good. Nothing could be further from the truth. Secondly, the following is for Information purposes only and should not be considered Investment Advice.
There has never been a more important time to do the work and design a trading plan that works for us individually. There are a number of things to take into consideration when Trading/ Investing:
- AGE People in their 20’s can assume more risk than someone in their 70’s trading their Retirement Money
- TIME How much time do you want to spend at the computer ie every day all day, on weekends or only during big sell-offs
- RISK TOLERANCE This will determine what we buy and duration of the trade
For me, I’m a Prudent Punk. I follow Warren Buffet’s Trading Thesis. Only buy well capitalized, well-run companies that I understand. As long as I’m working, I need to be able to focus on my customers instead of worrying about the day-to-day moves of the market. I know in advance what I want to buy and for Buy and Hold I know the Importance of buying at the right time. The bigger the market crash, the happier I am as I get quality at bargain basement prices which makes it a lot easier to deal with the inevitable ups and downs of the market.
The ONLY WAY to SUCCEED is to do the work necessary to develop, test and set up a trading plan that will work for us as individuals. The BIGGEST MISTAKE I see is when people are lazy and just try to copy someone else.
Let’s look at some examples.
Cathie Wood has ARK ETFs She has made a name for herself. How is she doing this year? Look at the Watchlist Average Graph. I used to race skiing and won many medals. If I saw a hill that looked like that graph, I’d say hell no and go to the lodge and relax.
Dr Subak showed his amazing strategy for thematic ETFs. Just like Cathie Wood’s ETFs, thematic ETFs are not doing well this year, so it’s important to follow clear buy and sell rules in accordance with your risk tolerance and investing timeline. Dr. Subak showed some charting ideas for this approach.
Bob Turnbull and Don Reitsma have shared amazing strategies for when to get in and when to get out of TQQQ, a 3x Leveraged ETF tracking the Nasdaq 100. However, if you decided instead to Buy and Hold TQQQ, well, you could already be down over 35% for 2022.
People have made a fortune on Crypto. There are so many crimes being committed lately. Now the Truck Blockades are going to Crypto thinking it’s a workaround to bypass their funds being frozen, but they’re finding that doesn’t work either.
Lastly, under these market conditions, nothing is for sure. People are willing to travel and the market was showing it in the gains for Cruise ships and Airlines. Then look at Thurs and Fri, even these sold off.
SUMMARY. If you want to make money in the market here are the keys to success:
- Be Prepared to take the time needed to learn, develop a trading plan and adjust it as needed
- Always remember, it’s important to realize you can always learn from others and how important it is to network with others
- Always show kindness and respect to others. This is the key to networking with those who can help us be better
- Never Risk more than you can afford to lose
Finally, guess what parts of the world are doing the best this year.
Quick Test the World ETFs. Here are the Top 5 returns:
- EWZ Brasil
- ECH Chile
- EPU Peru
- GREK Greece
- EZA South Africa
Who got it right?
I’m going out now to Buy a Lotto 649 since it’s a Super Draw tonight. The way the market has been so far his year, I like my odds better for a winning trade with 649. Wish me luck.
As always, nothing more than my 2 cents and I hope it’s of value and interest