Monday 19 November 2018

I like to sleep soundly

US equity indexes closed significantly lower, sp -45pts (1.6%) at 2690. Nasdaq comp' -3.0% at 7028. The two leaders - Trans/R2K, settled -0.4% and -2.0% respectively. VIX settled +10.8% at 20.10. Near term outlook offers choppy upside into the Thanksgiving break, and then renewed weakness into end month.




US equities opened moderately lower, and steadily cooled into the mid afternoon, seeing a low of 2681. There was a vain attempt at a latter day recovery, but the closing hour sure wasn't pretty.

Volatility picked up, with the VIX settling back above the key 20 threshold. S/t outlook will favour the equity bulls into the Wed'/Thanksgiving break.

Bonus chart: Germany, monthly

With nine trading days left of the month, the DAX is lower for the sixth month of seven, currently -1.8% at 11244. Soft psy' support at 10k, and then the old double top (now core support) of around 8k. If you believe the DAX is going to 8k, you can have some confidence about which direction the rest of the EU markets will trade into 2019, and to some degree... the US market.

I like to sleep soundly

Last week saw some powerful upside in Natural Gas (NG) to $4.93, although it wasn't entirely surprising, as NG had broken and settled above core resistance of the $3.20s in mid October.

The past few days have seen a fair amount of coverage given to, whose site has effectively 'gone dark'....

From what I gather, the company was leveraged short NG, via naked put writing. Effectively... losses could have been infinite.

Last week saw the fund not only lose ALL of its funds, but most (or all?) clients now have negative balances. Some will no doubt be able to throw more money to at least zero-balance their accounts, but not all.

If I've instilled anything of use to you across the past few years, it is hopefully the notion that if you want to sleep soundly at night, then no margin/leverage!

Across the many years, I've had some superb, and also horrific trades, but never have I had a sleepless night, worried about seeing my account balance turn negative. I simply never trade on margin, and I sure as hell sleep better for it.

Extra charts in AH (usually around 7pm EST) @

Goodnight from London
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