Weekly Round Up to April 24th, 2020

A Legend to aid in comprehension

It is the end of the week. This is when the charts of all the symbols being followed are displayed.

The THEORETICAL portfolio that started in the first week of February, 2020 at $100,000 now weighs in at: $119,128.80.

This is not bad considering that we use one simple method and follow only six symbols. The point of this exercise is to show (hopefully, successfully) that it is possible to trade and invest for yourself even as a rank beginner. As long as you follow the process and adhere to the capital allocation rules.

You don’t need to be a riverboat gambler to enjoy a decent return on your savings.

Beginning and inconsistent investors can learn something here.

If you are sitting comfortably, we shall begin:

S&P 500:

S&P 500

Not much to report. The S&P is in a downtrend based on the definition we are using: the blue EMA (21) currently below the brown EMA (55). The price and the three moving averages are coming together. They look like they are up to something. We shall remain patient until they show us just what that is.

Oil:

Oil

Oil is clearly in a downtrend. The blue EMA (21) is below the brown EMA (55). The price and the red EMA (8) are below both. We benefited from being short oil. It is in fact where most of our return was generated. It is a forceful reminder that careful trading and controlling risk will eventually turn into beauties like this. As Gann put it, it only takes four or five trades like this to make a wonderful year. We keep probing (not in an X-files kinda way) patiently and we will enjoy whoppers from time to time.

USD/EUR:

USD/EUR

We have an open trade in this pair as represented by the stock market proxy EUO. We were almost stopped out, but the trade stayed in place. The symbol has strengthened a bit. It is this trade that caused me to bring support and resistance into the decision making equation. As you can see by the red horizontal line that we keep bumping our heads at this point. It is important that you are aware of support and resistance on your chart.

Gold:

Gold

Gold is in an uptrend. The blue EMA (21) is above the brown EMA (55) and the price and the red EMA (8) our trigger elements are both above the trend set up. We have a pending trade in our stock market proxy UGL just above the equivalent of the resistance that has formed around 1728. We do this because we are not the only ones sharp enough to recognize that buy trades are forming above resistance – as it often does. (And why, incidentally, the understanding of support and resistance is such an important component of my Basic Trading Books and videos (https://howtotradeprofitably.gr8.com/offer_page.html )).

Those buys sitting there are the reason the price can quite often run like a stabbed rat when resistance is broken.

Bitcoin:

Bitcoin

We have had a pending trade to go short Bitcoin for a while now. As you can see the blue is below the brown and the price pushed above the blue and crossed back below the blue and then our trigger line, the red. We have a level of support marked by the lower red horizontal line. Our stop-sell for the stock market equivalent of Bitcoin, GBTC is just below this level.

While we are at it I have marked a level of resistance with the upper red horizontal line. We also have a falling window (gap) that is almost always a resistance level. The market will quite often come back and close open windows. The question is when. In the meantime we shall shiver in anticipation.

Apple:

Apple

I know what you are thinking, ” who ordered the spaghetti?”

What you are looking at is another development by a Japanese trader – it took him 30 years – the Ichimoku cloud. There are now trading rooms around the world who use this chart type only.

Based on a series of moving averages and highs and lows, there is a projection of the price into the future. The cloud represents the trend. When the price crosses the cloud, it is believed that the trend is changing.

Tomorrow we will work on the Apple chart a little more.

Any questions or comments, drop me a line: charlesgoddard2020@gmail.com

TTFN,

Charles

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