- Current teleconference event
- Market update
- Sector analysis
- Watch one of my recent trades progress
| Smart Trader Teleconference Event |
The four month live teleseminar event started with the first teleconference call on 3 June and was a great success. I shared every trade that I undertook over the previous month, from those that I exited and why I closed the trade to the new trades I had opened and are still active and running now. I will continue to provide updates on these trades during each teleconference call and share any new ones that I open.
I have had a few enquires in regards to joining the program now it has started and I am pleased to say it is still possible. Due to the large interest in this program, I have been able to increase the call capacity with the teleconference company and if you are interested in joining the program you can still do so now.
The first call has been recorded, so you will start the program by receiving the notes from the first call and then you will be provided with access to listen to this call via a secure web page or by downloading an mp3 recording. There is also a live discussion forum to ask me questions in between each teleconference call.
I do not know if I will run a program like this again. I have chosen this period as I have no holidays planned until end September and with my daughter starting school next year, I am not sure how this will effect my time. This program is an opportunity for me to share how I do things in the market by showcasing my actual trades.
To find out more about the program or to join, visit this web link:
| Market Update |
The market has continued its recent rise since my last newsletter and is now trading above the 4000 level. I don’t know if it is building into a strong base and starting to develop a resistance level or it has started to become healthy and is now trending up. The daily chart below shows how it has broken out and is making new highs.
Daily chart of the ASX 200 as at 12 June 2009
However, looking at the weekly chart it could simply be developing a base. After a downtrend the market will usually settle building up a supporting base. This is defined by a support and resistance level that develop and the market churns sideways between. The 30 week moving average flattens out and the share price trends above and below it. Below is the weekly chart which shows the current market moves in relation to the 30 week moving average and how it has now flattened out. I cover more about the market stages in the Smart Technical Analysis Home Study Course.
Weekly chart of the ASX 200 as at 12 June 2009
If the index continues higher and the moving average rises then it will confirm an up trend has started. However, if it moves lower and then back up to its previous highs and continues this way, then it will be developing a base ready for its trend upwards.
Even if it is developing a base there will be certain sectors of the market that will become strong and trend upwards before the major indices do. And it is shares from these sectors that I have been entering with my daily CFD trading system. Which I am sharing as part of the Smart Traders Teleconference event.
| Sector Analysis |
As well as analysing the major market indices and forming a view on the current market trends I also take a closer look at the sector charts that make up the market.
The Australian Stock Market’s primary index is the ASX 200. The 200 stocks that make up this index are split into sectors based on the Global Industry Classification Standard (GICS), which shares will belong to based on their industry type. Bank and insurance stocks will belong to the Financial sector, retail stores will belong to the consumer discretionary sector or consumer staples if they sell food products and the list goes on. I discuss all these sectors and how I view them as part of my weekly routine in the Smart Trading Plan & System Development Online Course, along with my system scans and trading strategies.
Many of the 12 sector charts are trending sideways, like the major market, but there are two that have broken through their basing stage and are now in stage 2 up trends. It is the shares from these sectors that have been leading the market upwards and I have found that I have become heavily weighted with trades from these sectors, for good reason too. Firstly my system has been identifying them and secondly the sector charts themselves confirm that they have become healthy.
These two sectors are the major resource stocks that make up the materials and energy sectors. Here are the weekly charts of both these sectors with their 30 week moving averages.
Daily chart of the Materials Sector as at 12 June 2009
Daily chart of the Energy Sector as at 12 June 2009
As you can see from these above charts they have now broken to new highs above strong resistance levels. There 30 week moving average is also rising and they are clearly trending above this line. Which are all signs of a healthy stage 2 uptrend.
So whilst the main market may be trending sideways there will be strong sectors that outperform and this is where I find I become invested, as my system scans bring up shares from these strong sectors.
By viewing the 12 major sector charts you can gauge which areas of the market are stronger at different times and focus on investing in the shares that come from these sectors.
| Watch My Trade Progress |
I will once again showcase a trade that I have opened recently and share with you in the upcoming newsletters how it is progressing. I am going to label this share as XYZ and I will provide details of the share name once I have exited the trade.
Daily chart of XYZ share as at 12 June 2009
This share came to my attention at the end of April, and early May, when my daily system scan started to bring it up. You can see my daily system scan signals from the blue arrows that appear in the above chart. The share had clearly been trending down in the past and had fallen to lows around $2, where it found support and trended sideways in a base. It then moved significantly and broke above its $4 resistance level rising very quickly to $5 before falling back.
The share then developed a nice support at $4, and when it pulled back and bounced off this level, I entered with a CFD trade on this share on 29 May, buying it at $4.70.
Most of my trades are taken when my daily system brings them to my attention. However, there are times when I can’t take a new trade on as I am fully invested or my portfolio heat (total open market risk) does not allow me to. When this occurs I add charts I like to my watch list and keep an eye on them and if my heat level changes I can then consider entering one of these shares. When this particular share pulled back and bounced I was able to do this and took the opportunity to get into it by buying the CFD.
The share then moved up slowly, before bursting through the $5 mark. My stop loss is now in profit and I will keep you updated on its progress in the next newsletter. For those that are part of my Smart Traders Teleconference program you will know which share this is, as I shared it with you during the teleconference call and you will get first insight into how this and all my other trades progress.
Until next time, enjoy, learn, grow and prosper. The market will be your biggest teacher of all :-)
Cheerio
Justine Pollard
Author, Private Trader & Trading Mentor
'Discover the Smarter way to trade'
www.smarttrading.com.au
justine@smarttrading.com.au
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