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Weekly Market Bulletin

Market Outlook for seven days from Tuesday 1 July 2008

The Just Shares Weekly Market Bulletin is information of a general nature only - it is not investment or trading advice. This Bulletin is not intended to influence anyone to trade shares – it is provided as an educational tool to assist with the learning of the share trading techniques that Just Shares teaches.

The Bulletin contains share charts and share price news and is based on ASX listed shares.

The bulletin is produced each Tuesday. Make sure you come back each week to see the updated bulletin. The prices and share charts used are taken at the end of Monday trading.

If you would like to learn more about the trading techniques mentioned in this bulletin why not request a cost and obligation free Introductory CD for our home study share trading course.

GLOBAL SHARE MARKET INDICES

AUSTRALIAN SHARE MARKET

The Australian market has had a poor June, falling 7.6% since the start of the month.  This makes June 2008 the twelfth worst month in the last 30 years of the Australian share market.

The short term group of moving averages are below the long term group.  The long term group is moving down but is still relatively tightly compressed.

The market is moving downwards.

A single Hindenburg Omen was generated on Friday 6 June 2008– this puts any open trades on yellow alert.

In terms of trading, given where we are in June and the Hindenburg Omen warning we choose not to open any new trades until market conditions are favourable enough to recommence trading.

We have added in a new indicator this week, the Just Shares Sharemarket Barometer.  This Barometer provides an indication of the underlying pressure in the share market – either upwards or downwards.  At the moment the Barometer is at its lowest value for the last 12 months.  We will update this indicator each week.

 

 

TRADING BOOK REVIEW

We are often asked which trading books we would recommend.  Each week we review a trading book and take the pain out of hunting it down for you by giving you a link so you can purchase it directly from our book selling partner. 

Title: Masters of the Market author: Anthony Hughes, Geoff Wilson & Matthew Kidman

This book provides a fascinating insight into the minds of Australia's greatest money makers. The fund managers and traders interviewed in this book all have proven track records and all have produced stellar returns. These characters are widely acknowledged as being the best investors in Australia.

Just Share’s opinion: A good insight into the minds and approaches of some of Australia’s top investors and traders but don’t expect to find too many specific trading techniques.

Click on the "Buy Now" link below to purchase this text at a discounted price.

Buy Now

 

 

PRICE CHART OF THE WEEK

Each week we look at a price chart or charts and provide some analysis using the techniques that we teach in our training courses. Sometimes the charts are chosen by Just Shares and sometimes they are suggested by readers.

We follow these charts for educational reasons, they are not intended as share tips.  We will also follow the overall outcome of these trades as the year progresses.  We use a notional $40,000 trading capital at the start of each year with a maximum of four trades open at any one time.  (Note that you can trade successfully with a lot less than $40,000).  We will add in profits and losses as trades are closed and assume a trade size of $10,000 unless position sizing requires us to reduce the size of the trade.

We are careful with the timing of our entries to trades so that they do not match the publication dates of this newsletter – thus making it impossible to mimic the trades.  This is because these charts and trades are published for educational reasons only.
            
Chart of the Week Performance

2007

Starting Balance (on 1 Jan 2007)	$40,000
Closing Balance	$61,842
$ Profit/Loss	$21,842
% Profit/loss (based on starting balance)	54.6%

2008

Starting Balance (on 1 Jan 2008)	$40,000
Year To Date Balance	$59,005
$ Profit/Loss	$19,005
% Profit/loss (based on starting balance)	47.5%

Please note:  Figures quoted above do not include brokerage or other charges.

Our profit for 2008 is currently $19,005 from a starting capital of $40,000 and represents a year to date return of 47.5% for the year to date, excluding open trades.  The overall Australian market has fallen by -16.9% year to date.

We have no open trades this week.

Trading Review from 1 January to 30 June 2008

Win or Loss	Share	Technique	Buy & sell details	% win or loss
W	AMU	Support & Resistance (variation)	Buy 01/01/08   55 cents	11.8%
			Sell 01/01/08   61.5 cents
L	MAP	Rebound	Buy 01/01/08   371 cents	5.6%
			Sell 03/03/08   350 cents
W	BBC	Support & Resistance (variation)	Buy 08/02/08   58 cents	3.4%
			Sell 08/02/08   60 cents
W	CDI	Support & Resistance (variation)	Buy 27/03/08   74 cents	3.4%
			Sell 27/03/08   76.5 cents
W	NHC	Support & Resistance (variation)	Buy 26/03/08   246 cents	10.2%
			Sell 26/03/08   271 cents
W	OMH	Support & Resistance (variation)	Buy 07/04/08   261 cents	10.3%
			Sell 10/04/08   288 cents
W	NHC	Flag Pattern	Buy 23/04/08   372 cents	7.5%
			Sell 09/05/08   400 cents
W	AGO	Flag Pattern	Buy 01/05/08   320 cents	20%
			Sell 05/05/08   384 cents
W	ACS	Channel Trading	Buy 05/05/08   31.5 cents	7.9%
			Sell 12/05/08   34 cents
W	CXM	Flag Pattern	Buy 12/05/08   54.5 cents	9.2%
			Sell 27/05/08   59.5 cents
W	ACB	Flag Pattern	Buy 22/05/08   44 cents	36.4%
			Sell 23/05/08   60 cents
W	CUR	CBL	Buy 21/05/08   370 cents	56.8%
			Sell 30/05/08   580 cents

Despite poor market conditions, the Just Shares’ techniques when applied with care, rigor and discipline have returned a healthy 47.5% for the first six months of the year.  The percentage of winning trades was exceptionally high at 91%.  Our target percentage of winning trades is 70%.

One of the reasons that the percentage of winning trades was so high was that in difficult market conditions we tend to be even more careful and cautious in choosing our trades.

It is also interesting to note that this level of return has been achieved through completing only 12 trades over a six month period.  This dispels the myth that some people have that you need to be extremely active in the share market to make money.

To receive a cost and obligation free Introductory CD and Manual please click here.

UP COMING DIVIDENDS

We include up coming dividends because often the share price will fall by around the dividend amount immediately after the share goes ex-dividend.  We must expect this fall in any open trade that we have and then carefully monitor subsequent price movements to make sure that the dividend related price fall does not result in the end of an up trend.

 

 

TELL US WHAT YOU THINK!

To send us feedback on the contents of this Weekly Bulletin, email us at:

enquiries@justshares.com.au

We'd love to hear what you have to say!

JUST SHARES TRADING TIPS AND HINTS

A Share Trader’s Daily Routine in Seven Steps

Step 1 is to have a clear trading plan for the market conditions at the current time.  This should include techniques that you have tested and feel confident about using.  You should always have a good understanding of any trading technique that you use.

Step 2 is that you must assume total responsibility for everything that happens to you.  This is not a bad principle for life itself but it is essential to be successful in the long term at share trading.  This means that no matter what happens – you follow some bad advice and lose a stack of money or your broker steals your money or your data provider takes your money and goes bust – you are in some way responsible because of the decisions that you made.  If you do this you will soon start to make better trading decisions with a shaper focus and you will start to eliminate mistakes and faulty thinking.

Step 3 is to find your weaknesses and work on them.  Keep a detailed record of your trades; include a diary of what happened to your trades and to you.  Include your emotions and your state of mind at the time of trades.  Review this record and diary often and with honesty and remember you are responsible for everything that happens to you.

Step 4 is make a list of all the things that could go wrong with your trading at a macro or general level (i.e. not in specific trades).  For everything that you can think of that could go wrong, develop courses of action to deal with the situation.  Write them down.  Read them at least once a week.  Rehearse the actions in your mind until they become second nature to you.

Step 5 is to determine what could go wrong in your specific open trades.  You should do this each evening or each morning before the market opens.  How will you react if things do go wrong?  Be clear in your mind on the exact actions that you will take – write them down.  If the worst happens follow your scripted actions.

Step 6 is to analyse your own mental and emotional state at the start of each trading day.  You are the key to your trading success.  What is going on in your life that will impact on your trading?  Awareness is the key to minimizing the impact.

Step 7 at the end of each day review the day’s trading activity.  Did you do, or not do, everything that you should have done.  Did you stick to the plan?  If not, sit down and reflect on the reasons why.  Write down how you will change what happened if the same situation arises in the future.  What are the self correcting actions that you can put in place?

Setting Your Trading Goals

Based on the work of Kevin Hogan, author of:”The Science of Influence”.

One question we are often asked is: “Is there a particularly good way to set your trading goals?”

For trading and indeed for all areas of your life, there are two crucial elements in goal setting and attainment.

1. The degree of the goal.
2. The intensity of the goal.
   

These two things will determine in large part whether you will achieve the goal.

The more difficult a goal and the more specific the goal is, the more likely you are to have high performance in achieving the goal.

Now, that doesn't mean that you will attain the goal, it means that those two factors integrated together will produce high performance which in turn will produce the best overall results.

Let’s look at a trading example.

Let’s say our trading goal is to earn $50,000 next year from our trading activity.

That's good but $51,600 will likely create better performance because the brain perceives it as more specific.

A lot of people think you should set easy goals.  Not so….set difficult goals and specific goals.

Data from almost 1/2 of a MILLION people shows that this is what works. Goals should be difficult and specific.

OK, that's the SETTING of the goal.

What about along the way...on the journey to achieving the goal?

You will be most committed to achieving a goal when you believe that achieving the goal is important. Furthermore when feedback shows progress is being made towards achieving the goal, you get the best results.

Feedback in share trading can be from something as straight forward as a running tally of your earnings year to date.

You want to earn $51,600 from your trading this year.  You see yourself at $31,000 in July and you know you are on your way based upon simple arithmetic.

And people are more likely to perform well when the goal is seen as believable based upon their knowledge, their training, and their skills. When people know it CAN happen because they CAN make it happen, performance increases.  So don’t set a completely unrealistic goal.

In goal attainment, the "WHY" is about as important as anything.

If you have a big enough "WHY" you can accomplish just about anything.

So when setting your trading goals be very, very clear on the “WHY” and make sure the “WHY” is a big enough “WHY”.

So what is it about setting trading goals that alter your trading performance?

1. Goals direct attention and effort toward the right activities. (assuming the person knows what they are doing)
2. They arouse effort to the level required by the task.
3. They promote the search for logical action plans or task strategies.
4. Goals encourage persistence.
   

Most people who start trading shares do not have goals.  When we ask them what their trading goals are, they don't know and they don't worry about it.  The most that we normally get back is “to make some money”.  This is neither specific nor difficult nor does it have a big “WHY” nor is it measurable.

We urge you to think about your trading goals, and to be bold.  Set yourself some specific, difficult and measurable trading goals and understand why you want to achieve them.  Then start measuring your progress.

In his excellent text book “The Psychology of Persuasion”, Kevin Hogan talks about "the least acceptable result".  What is your LEAST ACCEPTABLE RESULT from your trading?  Think about this very carefully because this is the true goal that most people WILL achieve from any activity.

You must move your Least Acceptable Result up to the level of your goal.

If you want to share your trading goals with us we would love to hear them.

 

 

This Weekly Market Bulletin does not take into consideration the financial objectives, situation or particular needs of any individual reader. Readers of this Weekly Market Bulletin should not act on any content within it without first considering obtaining professional advice.

Whilst the content contained in this Bulletin has been prepared with all reasonable care from sources which we believe are reliable, no responsibility or liability is accepted by Just Shares for any errors or omissions or misstatements however caused. Any opinions or forecasts reflect our judgment and assumptions at the date of publication and may change without notice. In preparing this Bulletin it is not possible to take into consideration the investment objectives, financial situation or particular needs of any individual reader.