Free UK Technical Analysis 03/03/2015

DISCLAIMER: I am not FCA authorised or authorised in any sense to give financial advice. Do not regard any of the following links, or information as investment or trading advice.


Today's Analyses:

https://drive.google.com/open?id=0B0wd9XTIWftmfjBPQWtvSTZubHd4bjFzQ2E4NTc5eng1d2t6REUtYm9SY2hiNXV6eG8wMXM&authuser=0

How to use these reports:

• This system is currently based around Simple Moving Averages (SMAs) that are based around the principals of Fibonacci numbers. These are used alongside a Slow Stochastic Oscillator (SSO) to create buy and sell signals, which are given numbers based upon their strengths.

• Over time, I adjust the stochastic coefficients and the weightings of the moving averages to create more reliable results during my back testing (for my use), but to also make the system more reliable generally.

• Attached in the linked folder will be a file called "buysignallers.txt" and "sell signallers.txt", which can both be used to show the position of a stock against the others that are analysed. This is where you will find the total signal strengths for stocks.

• It is worth noting that not all stocks and shares may load or process due to where the program gets its data from and some stocks with share prices below 0.10p will currently not analyse properly.

• These reports are all made up of a list of signals and comments and the data for these are taken daily. E.G. Today's signals use yesterday's closing stock prices - given in pence, not pounds! 

• The "signals" show the fibonacci SMAs that crossover and or any slow stochastic notifications.

• The "comments" show the value of the said SMA with the value of the previous day shown in brackets.

e.g. 

# Signals

Sell - 24.802226076843513707865168540 - 34 crossed 144

# Comments

SMA 3 - 25.50 (25.50)

SMA 5 - 25.50 (25.50)

• More information regarding this project can be found here:

http://themaskedstocktrader.blogspot.co.uk/2014/11/my-experience-with-quantitative-finance.html

Turmoil In The Oil Market.

I've never traded oil futures before, in part because the high inherent volatility of the commodity combined with a leveraged environment would throw me significantly out of my current comfort zone, but also because I would rather learn to trade on sector of the global markets really well rather than many to a mediocre level.


Nevertheless, falling oil prices have hit the AIM substantially knocking back the majority of junior oil explorers/producers, so I have to keep a vague eye on the market even if I don't directly trade it.


In my opinion the major falls we've seen in oil prices ca be split down into a few major points:


1. OPEC Vs Shale

- Personally, I feel that one of the major reasons why OPEC has decided to maintain its current supply levels is due to a desire to try and drown-out the US Shale Oil producers from the market and allow the status quo within the OPEC to continue undisturbed by foreign input and disruption.


- Moreover, intra-OPEC there seems to be certain parties who don't want their dominance with the OPEC to fall, with Saudi Arabia being possibly the best example of this. From the outside looking in, it would seem that they don't want to relinquish their supply into the hands of other members of the OPEC and will therefore hold at their current levels for the meantime.


2. Global Growth

- The next fundamental point is that global growth levels over the past quarter really haven't been anything to write home about, especially in the major growth markets, with China growing 7.3% in its third quarter - its slowest growth rate in five years. This coupled with China being potentially described as a "statistically generous" country with regards to its economic figures, means that the downwards pressure we've seen regarding oil prices was on a balance of probabilities going to be reasonably likely.


3. Reducing Sanctions on Oil Producing Nations

- Another key point that we shouldn't ignore for indication for the future direction of the oil price, is Iraq, Iran and Libya, all of whom have said they intend on increasing their production levels by 2015. This does in part depend on the sanctions currently in place on Iran over its nuclear program, but I certainly would not be surprised by more downwards momentum in the oil markets assuming a global state of ceteris paribus.


All the best,

The Masked Stock Trader

Index futures - real or nominal value charting?

Good morning traders and investors:


Today I'm going to look at something a little specific, but don't let that stop you from reading, because it will be food for thought for those of you that trade index futures.


When you open up your SPX futures in the morning (or at 14:30 in the afternoon if like me you're in the UK), do you ever stop to think about the impact of the nominal figures that you're trading against the real figures of the S&P500 (using a CPI inflation rate).


Now, whilst I appreciate that you can't actually trade SPX in real terms (iShares are yet to offer us an ETF that exposes you to real rated indexes), we can use it in comparison to the nominal value of the SPX to illustrate a true down trend (and therefore increase in value available to investors).


For example, let's take the SPX as of the close on July 18th 2014 (yesterday):


1. We had a new nominal record close for the S&P500 of 1978.22

2. The equivalent record close for the S&P500 in real terms however would be just under 7% higher than it currently is in nominal terms.


That's great, but what does this actually mean?


Well, for those who are prepared to do some data trawling, you can uncover some pretty useful trends when comparing the real and nominal index values:


1. A nominal upwards drift combined with a real down trend tends to result in a increase in equity value or a fall and consolidation in trailing P/E ratios. For example, 1966-1982 saw this trend in the SPX and by the end of the trend you could get a trailing PE of 6.6


2. You need to be very careful when buying into the stock market. Yes, this is stating the blatant obvious, but if you have bought into the SPX on in the secular bear market of 1966-1982 you could have gained almost 9% nominally and lost almost 65% in real terms.


I hope this is food for though for some of you,


The Masked AIM Trader