Another month in the rearview and another chance to review trades and recalibrate ourselves for March. Here were my highlights:
What were your highlights?
Let’s look at the news from Germany. Russian hackers have infiltrated Germany’s foreign and interior ministries’ online networks, German news agency DPA reported Wednesday quoting unnamed security sources. Unemployment in Germany held steady at historic lows in February, official data showed Wednesday, as booming demand in Europe’s top economy fuels an ongoing hiring spree. Around 10 million of the 15 million diesel cars registered in Germany fall short of the latest Euro 6 EU emissions regulation, potentially making them eligible for a ban, as well as two million diesel trucks. The weather station on top of Zugspitze, the highest mountain in Germany, recorded a temperature of -30.5C on Monday evening, the furthest the mercury has fallen at this time of year since records began. And in March 2018; Cigarettes will become more expensive. Copyright law is changing for educators and scientists. Streaming will be available anywhere in Europe by the end of March 2018. All new cars must come with an emergency call system installed.
The Markit PMI data at 9am and Unemployment data at 10am is worth watching but the main story on the economic calendar is Fed Chair Powell’s testimony at 3pm along with the US PMI.
We had a nice trade yesterday, adding 4% to account, utilising one of my favourite strategies whilst trapped inside a large range. See the details of previous trades here. The trade came from the Bollinger Band and RSI Divergence strategy so have a look at that post from yesterday. The strategy is not ideal for trending markets, because it is a mean reversion strategy.
I am favouring following the minor trend lower, but being careful because this move is expanding into a major level of support.
The major swings are currently bullish above 12280, so a break below this level will potentially spark a new major trend, to the downside. We are threatening that today.
For this to be the case, I believe that we would need to see some strength to break that level and then hold a pullback. Otherwise, it could be a possible rejection (wash) of those levels after the stop losses are wiped and the ‘book’ is cleared (order book). So be careul if you want to be short (but you are not already short).
Before we get to the major level, we have the fork median line as the main target to watch. As I am writing this, we have just pierced the median line, with some strength, so right now the 280 looks inevitable. But for me, there is no point in shorting from here, the move has happened already.
The Bollinger Band strategy would have taken a stop loss earlier this morning, but the running total would still be strong. If you have a bit of time, watch the video to see how to strategy is used. Click that link and scroll down the article to find the video.
We have seen a new spike 1, it’s below 30 on RSI and now we watch for a potential spike 2. We can check if there is divergence and decide whether or not it’s worth a trade. Just be careful, because this strategy is most effective in large ranges, but if we start taking out 280, then we could be beginning a new trend. This strategy is not as effective during trends.