Trade The Journey

Trade The Journey

New Style Trade Journal

Top of the Morning! I hope everyone enjoyed their weekend after bringing in the new year last weekend. I set goals for the year and week ahead, so I set New Years Resolutions in some form. Achieving goals that take time to accomplish can seem daunting in the beginning. By taking each day as its own, you can break down your goal into manageable steps.

Completing what’s required for the day, whether studying, exercising, or working on your craft, moves you closer to your goal over time. Instant gratification is the enemy of time, so be careful when you substitute a moment’s pleasure for lifetime achievement.

Across the nation, the seven-day moving average for Covid infections spiked to the tune of 600,000 new cases a day. Doctors are now forecasting Covid cases to reach one million a day. I included a graph as this posts’ to give you a sense of how quickly Covid cases are rising.

News reports say that the Delta and Omicron variants have combined to form the Deltacron variant.

Indices

Nasdaq: Dropped 7.25% to end the week

Dow Jones: After reaching its high, it dropped 2.33% to end the week

S&P 500: After reaching its high, it fell 3.66% to end the week

RUSSELL 2000: Fell 4.18% to end the week

Sectors

Best Performing: 

Finance and Energy

In the middle Sectors:

Materials, Industrials, Consumer Staples, Utilities

Worst Performing:

Consumer Discretionary, Technology and Healthcare

Rates: Yields on the five, ten, and thirty-year bonds jumped higher, steepening the yield curve. All yields jumped above their twenty, fifty, and two-hundred simple moving averages.

Mortgage rates are creeping higher, influencing potential homebuyers’ eagerness to make a long-term commitment at high prices and rates. Home refinancing also decreased.

Upon the release of the Fed Minutes, markets reacted to an increasingly hawkish fed eager to quicken the pace of its tapering. While supply chains are improving, emerging Covid variants remain a concern. Markets dropped on the news of a new variant and returned to its bull trend once the fears of the severity of the Omicron variant subsided.

The Fed will be walking a tight rope implementing a change in monetary policy to combat inflation. The unemployment report continued to show signs of an improving labor market. Job creation slowed though it picked up in a few sectors. Consumer credit topped forecast, and I pay attention to the revolving credit to get a sense of consumer sentiment. I wouldn’t take on more debt unless I knew I could comfortably pay it off.

Factory orders for transportation equipment, technological products, fabricated metal, and primary products increased while there was a decrease in machinery orders, electrical equipment, appliances, and components.

Investors rotated out of bonds and into value stocks with the Fed hawkish stance reiterated with the release of the Fed minutes. Cryptocurrency took a hit as Bitcoin hovered around the forty-thousand level. Below the forty-thousand level, the next stopping point could be twenty-eight thousand level. During the week, I read a report that billionaires are now interested in Bitcoin as a hedge if the dollar crashes.

Billionaires didn’t get to their position by paying the highest prices, so prepare for the times ahead. Recently the US overtook China as the number one bitcoin mining nation; Kazakhstan is a close second.


Technical Story

Russell 2000

The Russell remains in its year-long sideways trend. It is below its fifty and two-hundred day moving average. The reference levels for the sideways level are 2317 and 2319. I think the Russell will test the 2319 level in the short term. With yields rising, it could break through the support level within the coming weeks.

S&P 500

The S&P made a new all-time high this past week and quickly retreated. It broke through my reference level of 4739 and found support at the fifty-day moving average. It looks like the S&P could move back up to test the 4739 level in the short term.

Dow Jones

The dow made a new high this past week and quickly fell. The dow found support at the reference level of 36179. Most of the companies in this index have a long track record of success and aren’t going anywhere anytime soon. The week ended with a Doji; it will be interesting to see how the dow performs this coming week.

Nasdaq

The Nasdaq fell after rising to the reference 15848 level. After falling through its fifty-day moving average, the Nasdaq found support at the 14948 level. With yields rising, I don’t see the Nasdaq it’s run towards its all-time high anytime soon.

Rough times are ahead for the market, especially with the coming announcement of a new variant. I have a couple of stocks that are on a steep decline.


New Style Trade Journal

To gain experience trading the markets, I paper trade every night. I trade most of the time to create strategies and develop a better feel for how markets move. In the beginning, I didn’t trade often, and every time I opened my trading platform, it took a few trades before I became trading comfortable again.

Over time, I noticed I had no record of my trading performance except for the profit/loss statement. So, I developed an excel spreadsheet to help me keep track of trading, but I never used it. It was a struggle for me to write down every single trade in Excel.

To assist me in tracking trades in excel, I created a drop-down list for each cell. Below is a picture of my spreadsheet.

As you can see, it’s much easier to track trades. With time, a pattern will emerge, revealing your style of trading. With a journal, you can also see some of the trading mistakes you’re making.

For instance, I noticed that I was placing trades without thinking about the trade in advance. Because real money isn’t on the line, you can be careless, and it won’t affect your trading account. If you don’t make any adjustments to counter this carelessness, it’ll carry over to your live account.


Past week cash flow review:

This past week, I continued to slow down the pace of my spending activities preparing for the weeks ahead. I received an increase in my credit limit as I pay off my credit card. It’s tempting to slide down the slippery slope of buying something now and paying for it in the future. I am determined to pay off each of my credit accounts and then pay off my student loans.

Grade: C

Reason: Continued improvement

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