Day Trader column for July 14 - 2015

Another week and another weekly low, and as the index moved up early last week it did not quite make it to the weekly downtrend line before falling away again.    In last week’s column I made the comment that if a weekly close formed on the All Ords below 5,515 a weekly pivot point would then be in place.   As it turned out, last Fridays close was 5,478, so now a weekly pivot point has formed to the downside which has negated the pivot point to the upside four weeks ago. 

It seems now, most stocks across the entire price range are struggling and I would not like to risk money trying to fight against the tide so again I am remaining on the sidelines waiting to see how all the negative market comment plays out.     I still feel our market will have another leg up, as there are still stocks which have not yet fallen below their long term uptrends.   I will discuss some of these stocks shortly, but it seems the major commodity stocks have certainly had their run and are now in serious downtrend. 

However, before I get to that I want to discuss the SPI futures contract as I have had some readers enquire how and where it fits into the picture. 

Firstly the SPI is a contract based on the S&P/ASX 200 and is traded on the futures exchange which is a separate exchange to the Stock Exchange.   A new contract is created every three months and each has a final expiry date and because of this time factor the price of the contract will vary from the value of the S&P/ASX 200 depending on the current market sentiment.   If the sentiment is positive it will have a value above the index and vice versa.   However, as the contract nears its expiry date the pricing becomes closer and closer to the index value and by definition at the time and date of expiry it will equal the value of the index.    So by watching how its price varies from the index provides an indication of how another set of traders view the market. 

When I see a positive move on the market on a daily chart which gets ones hopes up that it may be worth taking a trade and then by the next week the price has fallen again it reinforces my belief that trading against the trend or trying to pre-empt the turn is akin to gambling in a casino. 

I have to keep telling myself to wait for the market trend to be in the direction I expect it to move and then wait for the setup and buy signal to form before trading. 

Now to some of the top 200 stocks which have so far defied the recent market fall in so much as they have in some cases fallen, but not yet broken their more recent uptrends.    In other cases they have consolidated around significant resistance levels and will likely move higher as soon as the market turns positive. 

In alphabetical order here are some stocks I am watching, and next week if space permits I will discuss why these particular stocks still remain high on my watch list. (CAR), Commonwealth Bank (CBA), Credit Corp Group (CCP), Clover More Group (CVO), Echo Entertainment Group (EGP), GBST Holdings (GBT), Hanson Technology (HSN), Macquarie Group (MQG), and finally for this short list Telstra (TLS). 


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Portfolio Position 


Cash       $319,619 

Shares    Nil 

Total      $319,619