ANNOUNCING LAUNCH OF MY NEW BASIC £5k ACCOUNT
On Monday, and by popular request, I am launching a new venture that I hope will be a great help to those traders who have problems handling large profits (such as the sterling trade below) and who cut them prematurely.
All details are in the emails I have been sending and to take a two week FREE TRIAL, click here. You will get my VIP Traders Club membership as well as the Basic $5k Account Trade Alerts with your Free Trial.
The Boris Bounce just got bouncier. The overwhelming consensus on both sides of the Atlantic is basically: “ Fill yer boots!” and “Back up the truck!“. In the UK, the pundits proclaim the ‘uncertainty’ over Brexit has now been well and truly removed and trade and pent-up investment can now surge into the wide blue yonder.
And in the US, the US/China Tariff War just got a lot cooler with the apparent removal of planned tariff increases this weekend. So full steam ahead! I see one UK pundit forecasting FTSE at 8,000 by year-end (10% higher than today). Many US experts are calling for more upside (or are they talking their book?)
But wait – is this a bull trap in the FTSE and the Dow? Professional traders did their usual thing – and bought heavily (with help from lots of short covering). But yesterday’s FTSE gains were limited by the surge in sterling by 3 cents.
Of course, these advances are coming after a year-long rally in the Dow where sentiment has already climbed to historic highs. Here is one measure of massive optimism – the Investors Intelligence Survey of professional advisors
chat courtesy www.elliottwave .com
The current surge has taken the bullish reading up to the 58% area where previous major highs have been put in. Yes, it could be pushed higher still but the odds are not good. And any disappointment, such as the Trade War being back on would likely send shares back down the escalator.
All of this optimism is playing against the backdrop of weak economic data. Just on Friday, US retail sales were reported not great. And in the UK, after Christmas, when the PPI cheques stop dropping on doormats as if from a magic money tree, will retail sales here likewise slow down? One day, ‘bad’ news will become ‘bad’ again.
Sterling reaches a major target
Way back in September, I identified a high probability reversal of the long-standing bear trend and advised VIP Traders Club members to go long GBP/USD at the 1.22 level. That advice was based on a high-probability reversal setup I spotted then:
I suggested we had a lovely Double Bottom to the 2 September spike dip to the 1.20 low. The wave patterns suggested that low was either a B wave or wave 2 low since the decline off the wave 1 or A was a clear three down, which is typical of B and second waves.
And from our first entry at 1.22, it had rallied to the blue trendline at 1.27 and appeared ready to break above it.
Was there any major positive news to ‘explain’ this recovery? If there was, I failed to spot it. In this period, Brexit was stuck as Mrs May’s deal was not ratified by Parliament time after time. One might have expected sterling to resume its decline with this negative news – but it did not. Obviously, greater forces were at work and those shorting failed to spot it.
So now with Boris in the driving seat and ready to step on the gas, here is the updated chart
It has surged above the blue trendline and reached one of my targets in the 1.33 – 1.34 area, actually hitting 1.35 on Friday. That was a massive 13 cent gain on our first entry at 1.22.
If you are trading sterling, why not take a Free Trial to my VIP Traders Club and keep up to date on my thoughts and forecasts? This is one of my major markets we trade.
Maybe M&S is coming back from the dead
I have been covering this iconic High Street brand for COTW for some time (9 December was latest post) – and headed the recent articles Will M&S come back from the dead? I had been waiting for the ideal time to enter longs for some time as I followed the bear trend looking for a potential reversal. And in October, I had my opportunity as the shares spiked down to new lows.
I noted the press was very unkind to their latest older woman’s styles – and gave me another reason to look to buy. You don’t want to be buying when everything looks rosy! That’s when you need to look to sell.
So here is my adventure into the world of Marks and Spencer
I noted the building momentum divergence and the potential ‘overshoot’, or Selling climax. A jump above the blue trendline would confirm the latter proposition. That has now occurred.
So my rather gutsy buy for my Pro Shares members near the low has produced a 37% gain so far. Who knew staid old Marks and Sparks could behave like a tech IPO as they surged on Friday!
We have a lot more wining share trades in my PRO SHARES service. Sign up for a generous three week FREE TRIAL here.