MAGNETIC Trading Report - 14 January 2014

A bearish start for the FTSE today if we open below 6730. If we break last week's low being 6679 this could get ugly. Whilst above 6679 we are still in this consolidation range which is seeing many many false breaks to the upside and downside [Signup For Mark's Trading Plan] 

MAGNETIC Trading Report - 13 January 2014

On Friday we got the rally towards 6780 however as we are now still stuck in a consolidation price channel the forecast will return to neutral once again [Signup For Mark's Trading Plan] 

MAGNETIC Trading Report - 8 January 2014

As the Christmas rally was all traded on low volume I am expecting to see a pull back just below 6700 before the market takes off again [Signup For Mark's Trading Plan] 

MAGNETIC Trading Report - 7 January 2014

The FTSE is still neutral today however if we break below 6710 today then expect a quick drop towards 6690.

What to expect in 2014?

Good morning

So the start to 2014 has so far been a negative affair. Equities almost always rise during the first 5 days of the year and if this period is negative then it often indicates the coming year could be negative i.e traders are motivated to trade at lower prices in a period where new cash flows from funds , investors buying up index tracking funds and fresh money being committed from investors should be moving the stock market higher.

I have mentioned it before but the time to make big money in the stock market if you are a long term trader is at the end of a bear market.  Investors often miss this opportunity as it means going against bad news and what your television set is telling you. The media creates massive emotions for investors and can easily cloud a rational judgement call. Right now the news is extremely positive on the stock market. The media is sending out shock waves calling for a new bull era and those who have been very conservative since 2008 are once again considering entering the stock market. To me this is a warning sign. There a few factors to consider here:

The first is the stock market in the UK and US is entering the 5th year of a bull market. Its impossible to call a top on a bull market but the big gains have already been made.  Safe stocks paying big dividends are now very over valued in the FTSE and are basically entering a bubble.

The second is the investors intelligence survey is now showing a figure of 61% bulls and just 14% bears. The last time the bears got this low was just before the 1987 crash. Likewise the bulls topped out at at 62% in 2007. 

So what does this mean for 2014? Well the smart money will be fully aware of what I have mentioned above which is probably why we are seeing some hesitation at the beginning of this year.  Yes we could see some more upside but its limited at this stage. It could be a year of nothing for the long term investor as the markets churns up and down with some wild swings which will be very unsettling for the average Joe on the street who is just returning to the stock market on ''feel good factors''.

If the market is unlikely to trend up or down this year then this will create a very good environment for short term trading and I plan to fully take advantage of this 

for 2014. A trending market is difficult to make money in if you are a short term trader as volatility often decreases.  If you have no interest in short term trading then waiting for the markets to test their Moving Average 200 could be prudent this year. We often see the stock market retest its MA 200 during the course of the year and this can represent a good buying opportunity.  Given the stats above on bulls and bears a decent correction is inevitable this year and when it comes it could present the last decent buying opportunity before a big bear market starts in 2015.  The transition from the end of the bull market into the a bear market will most likely be triggered from inflation and interest rates. In fact speculation on interest rate pressure could spark the correction this year.

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MAGNETIC Trading Report - 3 January 2014

Profit taking set in yesterday for the first time in many years... Historically the 1st trading of the year is a bullish event.... That was the main reason I was not happy to take an outright short and instead opted for the tunnel to gain some exposure if the market fell but would also profit if the market did rally [Signup For Mark's Trading Plan] 

MAGNETIC Trading Report - 2 January 2014

Happy New Year !

Its the first trading day of the year so volume will increase today. We have resistance at 6780 so if the FTSE pushes up to this level just after the open and then fails to break through then we could see profit takers come in today on the back of the Christmas rally [Signup For Mark's Trading Plan]