2013 Market Overview

Below is a chart of the short-term trend of the S&P 500:

As a trend following stock trader, this past year could hardly have been much better, with just one signal being generated for the past 13 months and zero whipsaw signals.

My written rules dictate that when the trend is up, I should be buying strong stocks, and buy strong stocks I did this year.   Please refer to this spreadsheet which has all of my closed out trades for 2013.

Although this past year was highly conducive to trend following stock traders, it is important to remember that this year was not typical.    Periods of drawdown and whipsaw trading will return at some unknown point in the future, so it is vital to remain disciplined and manage risk.  

Review of Open Positions: $DATE, $CPST, $RPTP, $STXS, $OXBT, $TLT

Trend Following Forex Charts

I have been bullish on stocks for all of the year 2013, but one asset class that I have not been bullish on is commodities and commodity currencies.

The reason I am not bullish is due to one factor:  the price.   As this daily chart of the Australian Dollar shows, the price, at this moment, is currently going down:

More specifically, the long term trend, as well as the short term trend are down.  Furthermore, the Aussie has recently been hitting new 52 week lows.   That is bearish.


Moving on, the next chart is a monthly chart of the Australian Dollar:

Before entering a trade, I like to have confirmation from multiple time frames.    The above chart shows the price breaking down from a multi-year consolidation area.


Because the Australian Dollar and Canadian Dollar tend to be correlated, one would expect the Canadian Dollar to also appear bearish and that is, in fact, the case.

Below is a monthly chart of the Canadian Dollar:

Review of Open Positions: $ALQA, $AMCF, $CCIH, $CMGE, $FRO, $INO, $OTIV, $SBLK, $SDIV

Four Potentially Explosive Stocks: $ALQAD, $FCEL, $MILL, $PLUG

Here are 4 stocks, all of which I currently own, that look very bullish to me:

Here are some commonalities amongst these 4 positions: 

• Each position starts off with a 2 ATR stop  (If you have no clue what this means, watch this) 
• If this stop loss is hit, I lose 1% of my entire account equity
• All of the stocks are in long term uptrends.   Never fight the long-term trend.
• All of the stocks are in short term uptrends.   
• All of the stocks are at or near 52 week or all time highs
• They are all rising on hugely expanding volume