EU Says Rift Over British Payments To EU Still Key In Talks

The European Union says not enough progress has been made in Brexit discussions with Britain, particularly over what London has to pay as part of its departure, to allow discussions to move onto future trade arrangements.

EU Commission President Jean-Claude Juncker told a session at the European parliament that more needs to be done on the withdrawal issues for EU nations to agree moving to the next phase of future relations later this month.

Financial issues appear to be a key stumbling block to an orderly British withdrawal from the EU.

Juncker said “the taxpayers in the EU 27 should not pay for the British decision” to leave while the bloc’s chief negotiator Michel Barnier said “serious differences remain.”

If it ain’t broke…

Stay in Queue

…don’t fix it.

Just a quick post and one of our favorite discussion points here at STG – market psychology. I will save you the usual buzzwords and phases describing the topic, thousands of articles have been written on the subject.

However, one item does always standout – “if it ain’t broke… don’t fix it” and by that I am referring to your system. Your plan. Your rules. Whether that be entries, exits and risk allocation. You have one, and sticking to it will likely be the make or break of your trading account and subsequent success.

This short video shows where (in our) opinion traders go wrong. Say 5x trades are winners, 3x are small losses they go and modify their system. We say don’t. If you are taking 3x small losses, yet the 5x other trades are winners and pay off the small losses (and more)  you have a great system and will do incredibly well. As we say, if it ain’t broke don’t fix it… Enjoy and have a great week!

VanEck calls bitcoin a ‘fad,’ then files for bitcoin ETF

Money management firm VanEck is both skeptical of bitcoin and planning to sell a related investment product, illustrating a rising perception that the surge of interest in the digital currency creates a high-risk opportunity that may be too big to miss.

Last Thursday, Joe Foster, the portfolio manager and strategist for VanEck’s flagship International Investors Gold Fund (INIVX) said in a manager commentary piece for July that bitcoin will likely never “replicate or replace” gold’s place as a safe-haven asset due to fundamental differences between the two.

“Bitcoin and other digital currencies are a fad that has attracted the attention of programmers, speculators, and early adaptors,” Foster said. “It is my opinion that governments will not allow digital currencies to reach the critical mass needed to challenge the utility of fiat currencies” such as the U.S. dollar.

“At best, digital currencies may eventually occupy some middle ground as a niche product,” he said. “At worst, they become a failed experiment that ends in tears.”

One day later, VanEck filed with the U.S. Securities and Exchange Commission for a VanEck Vectors Bitcoin Strategy exchange-traded fund that would initially invest in bitcoin futures contracts and trade on the Nasdaq.

“Performance of the Fund is determined by the price‎ movement of the underlying digital asset (i.e., Bitcoin), the rate of change and the change in volatility,” the filing said.

The fund will be an actively managed ETF that seeks to “provide total return” without tracking the performance of a specific index. Derivatives like futures allow investors to bet on potential gains or losses in bitcoin’s price without buying the digital currency itself.

“Joe Foster makes a great case for gold relative to bitcoin as a currency and store of value,” VanEck told CNBC in an emailed statement. “VanEck believes that the technology underlying digital assets, known as distributed ledger technology, has tremendous potential to revolutionize finance and trade. Digital assets are an investable asset class in their own right and continue to be integrated into the broader economy.”

The SEC declined to comment on the filing.

Many digital currency enthusiasts have called bitcoin “digital gold” and predict that a small percentage of gold’s roughly $7.5 trillion market value will flow into bitcoin, sending the digital currency’s price many multiples higher. Bitcoin has more than quadrupled this year, hitting Monday a record high above $4,300 — triple the price of an ounce of gold.

Despite the many risks of the young digital currency world, analysts like Standpoint Research founder Ronnie Moas said cryptocurrencies’ rapid gains are not something he “could keep [his] hands off of.”

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Stocks Move Higher, Sending Dow Industrials Closer To 22,000

U.S. stocks are rising Tuesday, sending the Dow Jones industrial average closer to 22,000 points. Banks are posting some of the biggest gains, and payment processors and other technology companies are also rising. Under Armour is tumbling after the athletic apparel company lowered its revenue projections and said it will cut jobs and expenses. Oil prices turned lower after a long rally.

KEEPING SCORE: The Standard & Poor’s 500 index rose 6 points, or 0.2 percent, to 2,476 as of 1:50 p.m. Eastern time. The Dow Jones industrial average climbed 86 points, or 0.4 percent, to 21,977. The Nasdaq composite added 12 points, or 0.2 percent, to 6,360. The Russell 2000 index of smaller-company stocks remained at 1,425.

GETTING PAID: Citigroup picked up 92 cents, or 1.3 percent, to $69.37 and Goldman Sachs added $2.11 to $227.44.

Among technology companies, payments processor Visa rose $1.35, or 1.4 percent, to $100.916. Mastercard, which processes debit and credit card payments, rose $1.85, or 1.4 percent, to $129.65.

Intel rose as its deal for Mobileye moved closer to completion following approval from regulators in South Korea. Mobileye makes software that processes information from cameras and other car sensors to decide where an autonomous car should steer, and Intel agreed to buy it for $15 billion in March. Intel gained 78 cents, or 2.2 percent, to $36.25 and Mobileye rose 17 cents to $63.47.

Xerox reported solid quarterly results and jumped $1.38, or 4.5 percent, to $32.05.

SMOOTH SEAS: Cruise line operator Royal Caribbean beat analysts’ forecasts and raised its estimates for the year. It climbed $4.43, or 3.9 percent, to $117.50 and competitor Carnival also advanced 71 cents, or 1.1 percent, to $67.49.

SPRINT SPRINGS: Sprint climbed Tuesday after it said it’s open to combining with another phone company or a cable company. CEO Marcelo Claure said Sprint can survive on its own, but it will be in a better position if it strikes the right deal. The fourth-larger U.S. wireless carrier also reported its first quarterly profit in three years as it cut cost and added wireless subscribers.

Sprint was on pace for its biggest gain of the year as it rose 81 cents, or 10.1 percent, to $8.79. Elsewhere, T-Mobile USA climbed $1.29, or 2.1 percent, to $62.95 and Verizon Communications gained 84 cents, or 1.7 percent, to $49.24.

POWERING DOWN: Utility company Scana continued to rise. On Monday the company said it plans to end construction of two nuclear reactors that customers have already paid billions to build. It will brief regulators Tuesday on its plans. Scana’s South Carolina Electric & Gas unit and state-owned Santee Cooper say they have already spent $10 billion on the project and that it could cost $20 billion to finish. The project has been shrouded in doubt since Westinghouse, the primary contractor, filed for bankruptcy protection earlier this year.

Scana rose $2.71, or 4.2 percent, to $67.08 following a 5 percent gain on Monday.

SLIMMING DOWN: Under Armour cut its annual revenue forecast as sharp discounts continue to affect its business in North America. The Baltimore company said it will eliminate 280 jobs and is aiming to reduce $110 million to $130 million in annual spending through a restructuring plan. Under Armour sank $1.71, or 8.6 percent, to $18.31, and it’s down by more than half over the last 12 months. Rival Nike added 50 cents to $59.55.

STUCK IN NEUTRAL: Engine maker Cummins reported a weaker-than-expected profit due to higher warranty costs, and its stock lost $11.14, or 6.6 percent, to $156.76. Power management company Eaton disclosed a smaller-than-expected profit and fell $5.38, or 6.9 percent, to $72.87.

On Monday Cummins and Eaton started a joint venture that will make automated transmissions for heavy-duty and medium-duty commercial vehicles. They announced that plan in April.

AUTO FAILS: General Motors and Ford declined as auto makers were expected to report their seventh consecutive month of lower sales. GM’s sales fell 15 percent in July and Ford’s decreased 7.5 percent. U.S. new vehicle sales reached a record of 17.55 million in 2016, and Ford’s U.S. sales chief Mark LaNeve said at their current pace, sales will be around 17 million this year.

GM fell $1.30, or 3.6 percent, to $34.67 and Ford declined 27 cents, or 2.4 percent, to $10.95.

ENERGY: Oil prices plunged after a six-day rally. U.S. crude shed $1.40, or 2.8 percent, to $48.77 a barrel in New York. Brent crude, the international standard, dropped $1.37, or 2.6 percent, to $51.3 a barrel in London.

BONDS: Bond prices moved higher. The yield on the 10-year Treasury note dipped to 2.26 percent from 2.30 percent.

METALS: Gold added $6 to $1,279.40 an ounce. Silver lost 2 cents to $16.76 an ounce. Copper dipped 1 cent to $2.88 a pound.

CURRENCIES: The dollar dipped to 110.21 yen from 110.24 yen. The euro slid to $1.1823 from $1.1831.

OVERSEAS: The DAX in Germany DAX rose 1.1 percent. Britain’s FTSE 100 and the French CAC 40 both rose 0.7 percent. Japan’s benchmark Nikkei 225 index added 0.3 percent while South Korea’s Kospi climbed 0.8 percent. In Hong Kong, the Hang Seng gained 0.8 percent.

Why have a trading system if you’re not going to stick to it?

It’s a perfectly reasonable question. And makes perfect sense. Why bother back testing it, learning it and trading it, if in a few days’ time you’ll trade ‘off system’?

Here are 3 common ways many traders trade ‘off system’. There are plenty more, but we’ll stick with 3 today.

  1. They take extra trades they shouldn’t.

There’s a couple of reasons for this. They assume they are missing out on something big and want to trade everything so not to miss it.

Secondly, many traders crave action. They look at their portfolio and want instant results.

  1. They exceed their position sizing

This is often caused by laziness and not being bothered to do the math’s properly, but can also be because the trader has shoe-horned the trade into their portfolio. They’ve exceeded their max risk just this once. Only the odds are 60-80% that it’ll be a losing trade, so all you are doing is allowing your losers to be bigger than they need to be. Guess what the outcome of that is going to be?

  1. They hear something about a stock/market and execute upon it

We’ve all done this before. Reading Twitter, the news and certain traders I respected and followed at the time would tweet about how Gold was destined for a crash. Only I was LONG. My trade was in profit too. Now not only am I having to cope with the normal inclination to want to bank my profits, but that’s just been exacerbated by reading that news. Now I definitely want to bank it. Only I’m trading what I think, not what I see. I’m allowing outside predictions on an unpredictable market influence my decisions. Which is insane. Fear controls everyone. We are so scared of what “MIGHT” happen.

Of course, you don’t need to be a rocket scientist to understand that in order to be a better and more disciplined trader you need to do the opposite to the above.

  • Accept that other markets you are not trading will trend and do well. You can’t trade everything. Be content with missing out. Its part of the game. But it also means that there’s a lot of opportunities. Lots of chances to pick a winning trade on your next pick.
  • Never exceed position sizing. This is paramount. Never put more risk on one trade. The odds are against you if most of your trades are losers. Be smart.
  • Don’t listen to outside opinion. They might be trading 10 min charts for all you know. Or approaching the market in an entirely different way. They also cannot read the future. No one can. Best way to deal with this outside noise is not to see it in the first place. Cut yourself off, and read “How I Made $2 Million on the Stockmarket” by Nick Darvas for inspiration on this.

Alternatively you could opt for a fully automated system which removes all of the above, trades 24×5 – no emotion, risk and opportunity taken care of. Acorn underlines this approach with verified results, month on month. Join us to start increasing your profits with minimal risk.

 

Week Ahead US Jobs and Fed to Guide Markets

Soft US growth to pressure Fed ahead of Jobs report

The US dollar is mixed against majors with gains against the NZD, JPY, CAD and AUD but weaker against the EUR and GBP. Risk appetite in Europe returned after the restful of the first round of elections in France left Macron and LePen heading into the May 7 deciding second round. The Trump administration presented its tax reform plan and launched a more aggressive trade offensive against NAFTA but anxiety around the dollar surged with the first release of the US GDP in the first quarter coming in below expectations at 0.7 percent.

US employment data will key alongside the May monetary policy meeting of the Fed. The ADP private payroll data will be published on Wednesday, May 3 at 8:15 am EDT. Job creation in the private sector has beat expectations since January, but the market has a conservative estimate of under 200,000. The Federal Open Market Committee (FOMC) will release the statement of the monetary policy meeting at 2:00 pm with no change expected to the rates. The meeting is not scheduled to have a press conference which will put more emphasis on the written statement as analysts and investors look for insights into the Fed’s next steps.

The U.S. non farm payrolls (NFP) will be released on Friday, May 5 at 8:30 am EDT. Last month the jobs report was well below expectations with a gain of 98,000 when 170,000 were expected. US employment has been the strongest pillar in the recovery but it has hit some bumps of late. The U.S. Federal Reserve will look at the wage growth component for signs of inflation as they ponder the number of rate hikes this year. The unemployment rate is expected to head higher to 4.6 percent as more people look to rejoin the workforce.