Should you follow the news?

One of the many trading/investing emails that I receive is from trader John C Burford, MoneyWeekTrader (you can sign up for free at Moneyweek.com).

In a recent email on the latest market volatility he said;

Now, if you read – and believe – the mainstream’s rationale behind this move, let me offer you an alternative explanation. It has little to do with the ‘news’.

The conventional story was Mario Draghi’s announcement "that the ECB stood ready to do ‘whatever it takes’ to retain the euro". There were also some positive earnings reports out of the US (a lagging data point). 

But remember on Wednesday, I noted that the market had completed a textbook five waves down to the 12,500 level on Tuesday – many hours before the above news emerged.

I stated then that I expected a rally from this level, and this is what occurred. 

Market round up for week ending 27th July - video

A week ending round up of the markets from Steve Briggs YouTube channel.

As well as a round up of the major markets, the video also covers Barclays and RSA towards the end.

http://www.youtube.com/user/sjb5555

Market indices 20/50 dma - FTSE100, 250, TechMARK, Eurostoxx - update 15

Starting a new week with the 20/50 dma still looking bullish on the main UK indices and the Eurostoxx 50. In fact, you would have to say of these the TechMARK and Eurostoxx index look the most bullish with a nice, steady upward movement developing in the longer 50 dma.  TechMARK looks really strong, perhaps getting ahead of itself, but there is certainly a good, upward trend in place. Only the FTSE100 still has a flatlining look about it, but even here there is now a hint of upward momentum. The FTSE250 looks the better of the 2 major UK indices, with price having stayed above the 50 dma even during the most recent sell off.

FTSE100

FTSE250

TechMARK

Eurostoxx 50

Market indices 20/50 dma - FTSE, TechMARK, Eurostoxx, Dow, S&P - update 14

Well, did Draghi at the ECB play his all-in bet yesterday or was it just repeating what he has more or less said before? Certainly the markets got excited by his “whatever it takes to preserve the euro...and believe me, it will be big enough” comment.  Actions will need to follow, but for the moment the markets seem to feel a little better about things.  Of course, it could be the reverse in a couple of weeks time and we will see the same pattern of Eurozone calm followed by Eurozone fear, rinse, repeat. As of now, the 20/50 dma crossovers are still holding good, there's even a hint of upward movement on the dma's on the Dow chart.

With the exception of the FTSE100, all are above the 50 dma.

The UK TechMARK still looks the best chart.

FTSE100

TechMARK

Eurostoxx 50

DOW 30

S&P 500

William Hill - Still a firm favorite - update

William Hill, which was mentioned in this post a while back produced another set of solid numbers today.  The trend for William Hill has been up for some time, a rise of about 30% in the last 6 months so there is a lot of good news in the price right now and it is today touching 300p.  That's not to say that it can't go higher, William Hill has momentum right now and is a good example of letting the trend be your friend.  

Laird - Rocketing along nicely

It's worth remembering that it is not all doom and gloom out there, a number of companies are actually doing quite well.  I like to look out for reports which despite all the general bad news about show a company in a positive light.  It suggests they are doing something right.  So, this morning Laird was spotted on my radar in part due to the positive spin of the news report around its half yearly report.

The Public Sector portfolio - Capita and Drax - Update 2

At the risk of being crude, a few years ago friends of mine that worked in the public sector had to deal with outsourcing specialists which included FTSE behemoth Capita.  Capita was not liked, the company was referred to as Crapita.  In that particular case, Crap..er Capita actually lost the local authority contract, but to look at the company now, you'd be forgiven for wondering whatever happened to austerity?  Capita has just announced some impressive results that are worth noting.