Tag Archive short position

Market Short Squeeze




Market Short Squeeze.

Not the best of times as trades go, we’re still believing in a Bear market.

Back in December 2018 and in to January 2019, the markets looked to be in free fall, almost dropping like a lead balloon.

Investors were worried about the Fed potentially increasing rates and in the UK the continuing Brexit drama.

Even in the last few weeks the Yield Curve on US Treasuries has started to flatten; when the yield curve inverts, we take this as a sign that markets expects interest rates to fall rather than rise in the near future, a warning that a recession, lies ahead.

A good indicator, this being as in all six recessions since the 1970s, the US Treasury Yield Curve has signaled a recession about a year before.

Sellers were quick to get out of the market and prices dropped, since then Indices have risen, investors and traders are asking why?

Many believe this to be a number of reason,

  • The FOMOs (Fear Of Missing Out); Small investors have been buying while stocks became “cheaper” hoping to catch the move of stocks going back in to a Bull run.
  • Buybacks; Companies took the opportunity to buy back shares to increase the value of remaining shares.
  • US /China trade talks; recently have been taking a good position with both sides talking in positive tones.

We took the opportunity to take another position in the FTSE 100 as it rose higher to take a contrarian position about a deal being reached.

So we’re in our trades, for how long depends on the next couple of weeks, for now we’ll be getting hit by the Market Short Squeeze.

Market Short Squeeze

 

Still holding our Dow Jones Trade.

Market Short Squeeze

(Our trading and image was done using an account with UK based broker IG)

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 




Marks and Spencer Investment




Marks and Spencer Investment.

Once at the centre of the British high street and renowned for it’s quality.

Recently taking it’s turn on the high street to announce a wave of store closures, this has put over 1,000 jobs at risk.

Marks and Spencer has been heading in a downward trend for a long time, their once loyal shoppers are turning away from the retail side over what has been seen as a shun to it’s clothing design, however more people have been opting in the past for it’s food, though this as well as been struggling.

Marks and Spencer has recently gone in to a joint venture with Ocado, a deal worth in the region of £1.8 Billion.

In the face of online competition from the likes of Amazon, and to being late to the online delivery services where the likes of Tescos, ASDA and Iceland already have a foot in the deliver door.

Marks and Spencer has only a limited range of groceries compared to the likes of Tescos and ASDA.

By joining Ocado, the delivery service well known since the early 2000’s Marks and Spencer hope to catch up and sell it’s quality goods to the customer base straight to the doorstep.

On news on the venture Marks and Spencer share price took a hit as the potential cost of the venture to the business became known, can Marks and Spencer afford the cost or have they left it too late.

We had chance to take a sell position before the announcement believing it’s tired business model may be too little too late for the struggling retailer.

Marks and Spencer Investment

(Our trading and image was done using an account with UK based broker IG)

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 





Will Debenhams be lost from the High Street?




Will Debenhams be lost from the High Street?

The Credit Rating Agency Moody’s recently changed Debenhams outlook to negative from what had been stable, this is because it believes creditors could have risks lending to the store which is currently the latest in a list of struggling department store chains.

Debenhams sales continue to decline in the 18-week period to the beginning of January, with it’s like-for-like sales down 5.7%.

With the high street struggling to compete with online competition, a lot of high street department stores are struggling in a big way and taking a lot of the heavy cost in jobs.

Debenhams loss from the High Street, could be a massive hit, employing 27,000 people with 165 stores, it’s loss could leave an already decimated high street looking even more empty.

From the chart it looks like the short sellers have entered in a large majority, this stock price could take a beating, if Debenhams can be saved, it will have to take some good fortune not just from the high street, but from investors and the restructure of it’s large debt.

We’re taking in this opportunity to take a quick short position, we believe it could continue in a downward trend, at least reaching 2.000 price, and at that price, who knows what could happen.

(Our trading and image was done using an account with UK based broker IG)

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 





Is Deutsche Bank Too Big To Fail?




Is Deutsche Bank Too Big To Fail?

It’s not been a good time for Deutsche Bank lately, going in to 2019 Deutsche Bank could be a major risk to the market.

The bank is a major financial company in Germany and a very powerful one within Europe, what is so dangerous, is they’re holdings of derivatives.

A lot of people don’t understand derivatives, and this is what makes the trading and holdings of them so dangerous to the markets. It is estimated Deutsche Bank has in the region of €50 TRILLION (€50,000,000,000,000) this is about the size of the global economy.

Deutsche Bank shares have dropped a huge amount already; going in to 2018 the shares were trading at around $20 (as time of writing they are trading at $8). The shares haven’t traded above the 50-day moving average since way back in September.

Now do we think the German Government can bail out the bank; is Deutsche Bank too big to fail in the German mindset? Well the bank does have an advantage with a large deposit base compared to other banks being dependent on wholesale funding.

Though a warning; with having the world’s largest derivatives book, and the stock going lower, a potential risk of spooking other financial businesses looks greater, and the lower Deutsche bank share price goes, the greater probability the German government will be asked for an injection of capital.

We don’t think Deutsche Bank will be allowed to fail, it’s quite possible the German Government (with the use of German Taxpayers) won’t allow it to happen, though how much it will cost is any ones guess, however will be a painful one.

That won’t stop us from taking a Short position, we’re going to hold as more downside of the stock is most likely before it gets any better for them.

Deutsche Bank Too Big To Fail

(Our trading and image was done using an account with UK based broker IG)

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 




Shorting Silver before a Breakout




Shorting Silver before a breakout, with silver looking to have been trading with in a narrow range for a good couple of years as shown by the bottom Tradingview weekly chart.

Within the narrow range we took our opportunity to take a quick short trade on silver, price had reach the resistance level, so after hitting this level it was struggling to breakout still, after placing our trade, price then took a sudden drop similar to the previous drops as shown on the daily chart below.

We know that price will have to breakout soon, and our conclusion is it’ll head for an upward trend, when, this we are unable to speculate at this time, the is a build up of orders appearing below and around the 1650.0 area, whether these buyers have the strength to help price breakout of the current range soon and even take price slightly highers is again hard to speculate but could be possible.

We as always had been thankful for our analysis help us to a profit of £60.10 for the fund, we could be keeping a close watch on silver for more opportunities, perhaps not to short and more or a buyer potential.

Shorting silver

 

Silver on the Tradingview Weekly Chart.

shorting silver

(Our trading and image was done using an account with UK based broker IG)

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 




Caution on Shorting Kiwi Dollar




Entering Short with caution that the Kiwi Dollar had been to areas that tested support in the zone that contained the NZD’s moves against US Dollar since 2016.

While knowing that a hike in US interest rates would further strengthen the USD and the NZDUSD looking to remain almost directionless and fluctuate within a range, we had expected a drop and so entered a sell trade and went short NZDUSD.

Our analysis was showing that the hike in US interest rates would give the US Dollar strength to break out that zone, however if for only a short period of time, as can been seen on the chart and confirming our expectations, a large candle has developed at the right of the chart with a large wick at the bottom, if the downward price of the NZDUSD was happening then it was probable that this would only be temporary.

We believe a build up of buyers had been waiting at around or just below the 7000 mark stopping any further drop for the Kiwi Dollar, we waited patiently for a further drop in price as sellers battled with the buyers for supremacy.

We didn’t have to wait long before the sellers had control and took price downward, we decided profit is still profit and be grateful and to move on to the next trade before the buyers enter back into the market for more.

Kiwi Dollar

(Our trading and image was done using an account with UK based broker IG)

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 




Taking a Loss on USDJPY




We don’t always get it right in trading! This week we ended up taking a loss on USDJPY.

A very important thing to remember in trading is losses will happen to everybody, this is why proper money management and an understanding of leverage are a must for every trader.

We had expected from our analysis that the USD was going to weaken further for a small amount of time, while good date was coming out of Japan regarding it’s current account and BoJ Lending.

So we entered a Short Position on USDJPY, however some positive data from the US including unemployment claims and the federal budget balance had given the USD some strength.

Within the chart we could see a bear trend with sellers mainly in control at certain areas.

Bulls were starting to gain strength and the positive data from the US gave them that extra confidence to get into the market and take the USDJPY higher.

So we made a loss, we don’t dwell too much, instead we move on to the next trading opportunity.

loss on USDJPY

(Our trading and image was done using an account with UK based broker IG)

If you want to learn how to make money online, then click here to learn about one of our Traders

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 





Shorting the S&P 500 for Profit




While the Index was between zones we got a position shorting the S&P 500 for Profit.

We could see on the hourly chart the had been a struggle between the Bulls and the Bears recently, an area of resistance was showing at around the 2680 price with support at around 2660.

We knew it won’t be long before a potential breakout, as the month of April had been strong for stocks in the US and so the S&P 500 could look set to cover its previous losses for the year.

The Bulls could be coming into positions of strength and taking the index higher.

Wanting to close out our short position, and settle for £62.60 profit.

S&P 500

(Our trading and image was done using an account with UK based broker IG)

If you want to learn how to make money online, then click here to learn about one of our Traders

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 





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