Moving Averages
looking at the chart
40 >10 & 10 > 4 wk MA. The 40Wk MA has turned up slightly. This means the MAs no longer indicate a down trend but are signalling a sideways market
ADX
ADX = 44 with DI- above DI+ indicating a down trend. DI- has decreased and the ADX value as risen this week. With the ADX rising it does suggest a continuing down trend, but with DI- decreasing this could indicate the development of a sideways market.
Momentum
Momentum indicated some divergence with price last week and if I'd placed an order to go long according to the momentum divergence strategy it would've executed this week. Would it have paid off only time will tell on that one.
So to sum up
| MA | Weak sideways indication |
| ADX | Down trend - continuing , possibly starting to move sideways but too early to tell just yet |
| Momentum | Momentum divergence occurred last week. |
I think it's fair to say that the downtrend I saw occurring last week has stalled putting us into a sideways market. Which way it goes from here is any ones guess.
With it being a sideways market I am going to look for both long and short positions. I will be looking for trending stocks on daily charts which have rallied or pulled back.
I was thinking to start doing some sector analysis as well but I don't really have the time at the moment to dedicate too it. I may try and make some time over the coming weeks but we'll just have to see how it goes.
Weekly Analysis - FTSE All Share - 04-07-10
Moving Averages
looking at the chart
40 >10 & 10 > 4 wk MA. All the MA are decreasing suggesting we are in down trend mode
ADX
ADX = 44 with DI- above DI+ indicating a down trend. DI- has risen along with the ADX value this week suggesting a continuing down trend
Momentum
Momentum is showing some divergence as price has made a new low while momentum had made a higher low.
So to sum up
MA | Down Trend |
ADX | Down trend - continuing |
Momentum | Momentum divergence has occurred |
I have decided to remove RSI from my weekly analysis. I have never really used this indicator and during prelonged up and down trends it gives a continuious high or low reading.
The aim of the weekly analysis is to tell me what the market is currently doing, not to try and predict what it is going to do. I want to look at what it is doing and trade accordingly.
So my analysis suggests we are in a continuing down trend. Therefore I will be looking for stocks to short this week.
Weekly Analysis - FTSE All Share - 19-6-10
Moving Averages
looking at the chart
10 > 40 & 40 > 4 this MA combination suggest the market is currently in sideways mode.
The 4 week MA has turned up again this week, could this suggest more rises to come? Price this week nearly hit the 40week MA price. If the price can cross up above the 40wk MA and keep rising I think we will see a return to an upward trend. That said it could go the other way and we could just be in a rally of a new down trend.
ADX
ADX = 42 with DI- above DI+ indicating a down trend. DI- has fallen this week giving rise to a new downtrend of this indicator ( a series of lower highs). This along with DI+ rising this week signals the recent down move is definitely stalling if not potentially starting to reverse.
RSI (Relative Strength Index)
RSI = 60 so neither oversold or overbought. It's nearer the 70 than the 30mark so this could start to suggest a weak sell.
Momentum
Momentum is up again this week. With momentum rising above 0 for the first time in 8 weeks I think this indicates that some confidence is coming back to the market.
So to sum up
MA | Sideways |
ADX | Down trend - possibly starting to stall |
RSI | Weak Sell signal |
Momentum | Some confidence is returning to the market |
I think we are still going sideways here. If we take a look at the daily chart below the FTSE has risen for 7 days in a row with the last day forming a doji and breaking even. This could suggest we will see some retracement over the next few days. Also with price failing to break past the highs achieved on the 3rd and 4th of June it could also mean the price will fall back slightly seeing this as a weak resistance level. Also next week we have the emergency budget to look forward too which I'm sure will also have some effect on the price of the markets
I still believe the market will continue to rise over the coming weeks. I think we could see a couple of down days this week but I suspect they will not be anything like what we have seen recently.
So I would say mind the dip this week, but when it will happen or even if it will happen that is anyones guess.
This weeks positions
Cautious Long positions, Again, but I suspect the market may end up flat on the week.
Weekly Analysis - FTSE All Share - 12-6-10
Moving Averages
looking at the chart
10 > 40 & 40 > 4 this MA combination suggest the market is currently in sideways mode.
The 4 week MA has just turned downwards this week but it hasn't changed as much as it has in recent weeks so it would seem the volatility in the markets is settling down(for now at least). The 10 week MA is clearly trending downwards and the 40 week MA is moving up but starting to flatten slightly.
ADX
ADX = 43 with DI- above DI+ indicating a down trend. With DI- rising this week could the down trend be set to continue?
RSI (Relative Strength Index)
RSI = 41 so neither oversold or overbought. It's nearer the 30 than the 70 mark so a very weak buy from this.
Momentum
Momentum is up slightly this week. Could possibly suggest the down trend is ending or stalling
So to sum up
MA | Sideways - suggesting current volatility is settling |
ADX | Down trend - possibly continuing |
RSI | Weak Buy signal |
Momentum | Stalling or ending down trend |
Looking at the weight of the evidence here I would say we are still in a sideways market.
If we take a look at the daily chart It shows that the recent down trend may have ended. With prices turning upwards on the 9th June could the recent down trend have made its lowest low on the 25th May and has now failed to pass that low signalling the end of the trend. Well as always who knows? I suspect the recent downwards correction is now behind us. I think it was probably a lot longer and deeper than most expected but I think we could see a return to and upward move or we could go sideways for a while. If price passes its most recent high made on 3rd June then I think we may move upwards from there.
This weeks positions
Cautious Long positions, Again.
Weekly Analysis - FTSE All Share - 6-6-10
Moving Averages
looking at the chart
10 > 40 & 40 > 4 this MA combination suggest the market is currently in sideways mode.
The 4 week MA has just turned slightly upwards from last week. I would say it's more flat than upwards. This may suggest the current market volatility is settling down.
ADX
The ADX = 41 with DI- above DI+. The ADX has risen from last week and the DI+ has risen while the DI- has decreased. The DI- is now starting to trend downwards with a lower high made two weeks ago. I think this could signal the beginning of the end of the recent downward move.
The ADX is in downtrend mode but with DI- suggesting it may be stalling.
RSI (Relative Strength Index)
The RSI value is currently 33.86. This does not indicate overbought or oversold. There is some divergence in the indicator showing. RSI hit a low at the beginning of may and the price low was last week. Therefore this divergence can be seen as a buy signal so I will suggest the RSI is giving us a buy signal. Albeit a weak one it's still suggesting we should be buying.
Momentum
Momentum tells the rate at which the price is changing. It's useful to indicate if a trend may be stalling or about to reverse.
Currently momentum is showing some divergence. The price made a new low last week while momentum made it's most recent low the week drfore. I prefer there to be at least two weeks between the momentum low and the price low to classify as divergence so momentum is showing slight divergence indicating a stalling down trend.
So to sum up
MA | Sideways - suggesting current volatility is settling |
ADX | Down trend - possibly stalling |
RSI | Weak Buy signal |
Momentum | Stalling down trend |
Looking at the weight of the evidence here I would say we are in a sideways market with a slight glimmer of hope that the market may start to rise again soon.
I think we may possibly be over the worst of the bad news of the last few weeks. I think we may see prices start to rise over the coming weeks. I think it will be an interesting time when the new emergency budget is announced on 22nd June. I would think it may spark a selling spree if the rumours of the change in capital gains tax are true. All the people that actually own stocks and shares may look to ditch them to avoid the capital gains tax hike. Only time will tell on this one as with everything else.
This weeks positions
Cautious Long positions.
Weekly Analysis - FTSE All Share - 29-5-10
Ok So here is my weekly analysis of the FTSE all share. This is very much open to your own interpretation but the values I use I have found to be useful in the past. This is not to say they still will be useful in the future but these have been working so at the moment I am not changing them.
So I have a weekly chart with three moving averages. The MA are the 4 week, 10 week and 40 week moving averages.
Moving Averages
Moving averages can help us determine what the market is currently doing. The table below is a definition of what I think they tell us.
4>10 10>40 all pointing up | Up-trend flowing |
4>10 10>40 less than 3 pointing up | Up-trend stalling |
40 > 10 10 > 4 all pointing down | Down-trend flowing |
40>10 10>4 lass than three pointing down | Down-trend stalling |
Any other formation | Sideways |
So looking at the chart
10 > 40 & 40 > 4 this puts the MA combination into the last row of the table (Any other formation) so the MA tell us the that the market is currently in sideways mode.
ADX
The next chart under the main chart is the ADX reading. See the table below for my definition of what I think it tells us.
Use an 8 week ADX setting
+DI > -DI | up-trend |
-DI > +DI | down-Trend |
DI lines crisscross each other | Sideways |
ADX crossing 25 | Significant trend |
ADX > 25 and rising | A continuing trend |
ADX > 25 and falling | Trend consolidating or reversing |
The ADX = 40 with DI- above DI+. The ADX is rising which according to our chart indicates a continuing down trend. However, only 5 weeks ago the DI- crossed the DI+ signalling a potential sideways movement. But we have to look at the here and now and according to our rules the ADX indicates a Continuing down trend.
RSI (Relative Strength Index)
RSI indicates to us if the chart is overbought or oversold. This can give us an indication of when to buy or sell. We need to be slightly careful here as in sustained trends the reading can read overbought or oversold for a long period of time
Use a 3 week RSI setting
70 - 100 | Overbought | Sell |
0-30 | Oversold | Buy |
The RSI value is currently 39.42. This does not indicate overbought or oversold. There is some divergence in the indicator showing. RSI hit a low at the beginning of may and the price low was this week. Therefore this divergence can be seen as a buy signal so I will suggest the RSI is giving us a buy signal. Albeit a weak one it's still suggesting we should be buying.
Momentum
Momentum tells the rate at which the price is changing. It's useful to indicate if a trend may be stalling or about to reverse.
Currently momentum is showing some divergence. The price made a new low this week while momentum made it's low last week. I prefer there to be at least two weeks between the momentum low and the price low to classify as divergence so momentum is showing slight divergence indicating a stalling down trend.
So to sum up
MA | Sideways |
ADX | Down trend |
RSI | Weak Buy signal |
Momentum | Stalling down trend |
Looking at the weight of the evidence here I would say we are in a sideways market. So looking back at the chart we can suggest that the FTSE all share has just bounced off a support level giving way to rise in the short term. Therefore our new positions should be long positions as we are expecting the price to rise in the short term.
This weeks positions
Cautious Long positions.
