Tip From the Geek Recap – December Trading Tips Summary
Another month has come and gone and it is now time to review the results of my trading. December was a tricky month for me and many traders and I for one am glad it is over. Technical and fundamental analysis on many of my favorite trading vehicles got tossed out the window due to the Fiscal Cliff embarrassment. Not to mention that it was the end of the year and a major world holiday which brings its own caveats to trading. In the end it was a net positive month for me but definitely not one of my better months. In retrospect I don’t know what I could have done differently other than to have been more conservative with my entries on some trades and not to have bucked the trend on others. My thanks go out to all of you participating on the forum, your feedback and ideas have helped me more than once. In total for the month of December I made 20 recommendations. I am not counting the tips I put out December 31st because none of them were intended to close on that day. Those trades will be included with my recap of January.
Out of my 20 recommendations 18 were triggered in the week I made them. For reference, I have not been executing any of my trades if they don’t trigger in the week I make the tip. Due to market volatility 2 of my trades did not trigger. My total cost of investment was $1800, $100 times the 18 triggered trades. I won 10 of them and lost on 8 for a win ratio of 55%. The month was profitable; I made a net gain of $120 for the month, a small amount but a positive one and that is what matters. What also matters is that my monthly return was 6.6% of investment.
The S&P Was Driven By Knee Jerk Reactions To Fiscal Cliff News
As you all know the S&P 500 is my number one trading vehicle. It is the one underlying issue that I will trade every week. I made a total of 4 trades on the S&P and thanks to the rally December 31st I was able to profit on 3 of them.
Techs Looked Attractive Going Into The Month
I rarely trade major US indexes other than the S&P 500, I just don’t see any reason for it. However, the techs looked really good to me going into the month so I ventured out and made a call on the Nasdaq. Much to my dismay it turned against me and lost me my investment. I made one trade on the Nasdaq and lost it smartly.
European Woes Were Put To Rest
In Europe many of their financial issues were put to rest, or at least on the shelf, for the time. The major European indexes traded up near high levels for most of the month and were telegraphing the moves we saw this week (Dec 31 – Jan 4). Unfortunately for me the move did not come soon enough and my call on the FTSE100 expired worthless. I made but one trade on the FTSE and that one trade was enough.
At the same time the European equities markets were consolidating the Euro was doing the same. The Euro struggled against the dollar while the US debated what it was going to do about its debt. The Euro had obvious support below and at times not so obvious resistance above. I made a total of 4 recommendations on the Eur/USD trade and managed to squeak out a 50% win ratio.
Asian Markets Look To Expansion In China And Japan’s Stimulus Program
Asian markets are always tricky. The region is vast and influential for many reasons. China and Japan were my two focuses for the month of December. Chinese data pointed to expansion growth, if only mildly, and Japan made a major political change. The election of Shinzo Abe to Prime Minister and his pledge of “unlimited” easing helped to drive the yen and the Nikkei to long term highs. I made 4 recommendations for the Hang Seng and Nikkei collectively. As for the Heng Seng I made one winning and one losing trade for a ratio of 50%, I also made 2 recommendations for Nikkei. Of those 1 lost and the other did not trigger.
My real success story for the month is the USD/JPY trade. The elections, Abe’s pledge and then later his stated target of 90 yen per US dollar made this about as much of a sure thing as you can get with trading and market speculation. I made 4 recommendations and made 4 winning trades.
McDonald’s Not So Tasty
I have been watching McDonald’s for some time now. The growth story this stock provided came to its conclusion this year and in December was looking ripe for a bounce. The release of positively surprising data from the Asian and US sectors of its business in early December helped to convince me a call was in order, apparently I was wrong because right after I got in the market for MCD tanked and I lost out on the trade.