08:25am   After a busy few days I am planning a quiet time at home today catching up on emails and doing some chart watching from time to time – any trades I take will be detailed below in my Trading Diary.

Market Update

Obviously the main news this morning is the massive drops we have seen in equity markets over the past few days. It all started from inflation concerns after an encouraging U.S. jobs report on Friday coupled with solid wage growth which is pointing towards higher interest rates which in turn has a negative effect on company earnings. The Dow Jones ended Monday’s session 1,175 points down (-4.6%) after falling as much as 1600 earlier in the session and has now broken back through the 25,000 level and wiped all of the 2018 gains. The S&P-500 also fell considerably and had its largest one day fall since mid-2011, it was down -4.15 by last night’s close. The tech-centred Nasdaq index was not hit as hard and only lost 3.8% after Amazon and Apple shares rose. At the moment, traders putting this bout of selling down to a ‘correction’ but confirmation of this theory will take a few days to work out.

The global equity sell-off continued during the overnight Asian session with the Japanese Nikkei-225 coming in with the highest falls at nearly 5%, its largest one-day point fall since 1990. All other indices were down between 3% and 4.5% although small gains were seen just before the close as U.S. Futures rose slightly.  Tuesday’s European markets opened largely down although there has been small pockets of buying in the past 30 minutes – an interesting day ahead.

Gold, as expected, is benefiting from this volatility, it ended Monday’s session at $1339.50 up by $5.90 as traders pull money out of equities and search for alternative investments. It is slightly up again this morning at $1340.15.  Oil is suffering from the global equity sell-off over concerns about future demand and also the strengthening Dollar. When markets sell-off, investors will rush to saven haven currencies such as the U.S. Dollar and Japanese Yen and as Oil is priced in U.S. Dollars this makes it more expensive to buy hence the fall in futures prices. Brent Crude closed last night at $66.88 down 93 cents but it has recovered slightly and is trading at $67.09.

Trading Diary:

10:35am   There’s nothing to trade at the moment so off for a cycle ride – although there is a possible long position coming up on the German DAX-30 chart but the 74 pip stop loss is too large for the 15-min timeframe, even though it is just reflecting the current volatility in equity markets.

11:45am  Just taken a ‘short’ position on my 30-min U.S. WTI Crude Oil chart. It’s a Master-The-Reversal UTB pattern with a 30 pip stop loss, a lot more reasonable than the previous opportunity (above)

12:25pm    I have taken a quick profit on my WTI position due to the current volatility across most charts. My score came in at +40 pips. Off out to lunch now.

14:15pm    I’m in a ‘short’ position on my 15-min GOLD chart, more details soon.

15:00pm    Details of the above trade: it is a Master-The-Trend Strategy-B pattern with a 41 pip stop loss.  The risk is slightly higher than normal but not too out of the way to be considered on a day like today where the Dow Jones is in a 900 point range.

16:10pm    Now out of my GOLD position with a +69 pip profit.  Switching off my screens now, happy with the day’s score.