Trading Journal

The Over Leverage leads to the shortening of the time to make gains, making it more difficult to ride winning trade ideas. An important virtue of the successful trader is precisely the ability to preserve winning positions.

If many are Over Leveraged, there is a potential advantage to increase the duration of the trade, as when others are shaken, we may negotiate the long-term movements more effectively.

Stocks Gain Before Jobs Data

Yesterday the North American indexes ended the session almost unchanged, rebounding from losses earlier in the session, a movement that seems to have been purely technical, since some titles were already oversold. In the European market, the situation was quite different, with the major indexes declining more than 2%, as investors react negatively to ECB President Mario Draghi’s speach, on concern the European Central Bank asset-buying plan won’t be enough to revive growth.

As investors assess the strength of the U.S. economy, analysts are predicting a return to gains of more than 200,000 in monthly nonfarm payrolls.

Hi guys

I am new here. I have already posted the following but couldn't find my post!
So please don't count this as double posting. Moderators can feel free to delete any of the double posts or edit them.
The post was"
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US macroeconomic data continues to exceed expectations, in which the employment numbers strengthen a recovery scenario for the American economy. However, after today’s opening, U.S. stocks fell, with the Standard & Poor’s 500 Index retreating after touching its average price for the past 50 days, as small-cap shares resumed a selloff following a fifth weekly decline.

This morning, Asian shares closed positive, reacting to the smaller number of protesters on the streets of Hong Kong.

The positive opening of major European indices, led to a marginal climb throughout the day. DAX30 was in decline throughout the day. It is important to notice that the German market was closed last Friday.

Despite the US stocks being stronger than the European, the stock market is falling in general.

The SP 500 index depreciates the second day and European stock markets follow in a sharp fall. Despite occasional recoveries, the markets continue to show signs of weakness and if nothing changes, a return to the minimum of August will not take long.

Here are the current factors of worry among investors:

Dubious economic data, some geopolitical risk, the rise of the dollar, the protests in Hong Kong, the fear of Ebola, the decline in oil prices. In addition the IMF cuts the forecast for global growth in 2015, warned about the risks of rising geopolitical tensions and also about a potential correction in the financial market with shares in speculative levels.

The decline in recent sessions leave some nervousness in the air, given the possibility to be tested the important support zone that represents the minimum of August. For the particular case of DAX30, the breaking down of this support may create an inversion, with bearish implications.

This does not necessarily mean we have to watch to a ‘crash’, but it is certain that from that moment onward the price action would present Lower Highs and Lower Lows, which are not witnessed for a few months.

The charts tell us that the long-term trend remains bullish, even with the break of the mentioned support.

Stocks climb, recovering from a minimum of two months, after the Fed´s minutes release, on speculation that the Fed will keep interest rates near zero, for more time than expected, amid concerns of slower global growth.

Technically, the European indices have broken the barrier of the minimum of the year and their medium term technical situation is significantly deteriorated. However it will be the behavior of the American stock market to determine the evolution of the European equities.

Along this week the Industrial Production and Inflation on several Member States will function as relevant indicators of the Euro zone.

In addition to the publication of economic data, investors will monitor the interventions of members of the ECB and European governments. Within the European Union there is no consensus on how to combat the economic downturn and the specter of deflation.

China’s economic indicators will also merit the attention of investors.

No headline news on today’s economic calendar so it may be a very quiet trading day.
That made for a bit quieter market place.

Stocks slump with bad economic data.
Volatility increase as market is transitioning from fear to panic.
Banks sank after reporting earnings while a drop in retail sales fuel the concern about the economy.
The spread of Ebola has started to affect investor psychology, contributing to a decline in U.S. airline stocks.
The S&P 500 had its worst intraday retreat since 2011.

The calendar for tomorrow is shaped by a few economic events and information but most probably will not bring much needed changes.

The session yesterday had a lot in common with what is called a day of capitulation. A day of capitulation, which usually occurs after a prolonged decline in the markets, is characterized by a negative start and that is further aggravated by a spiral of sales, with high volume. This spiral of sales is due to the fact that tolerance to loss of most investors is exhausted. These investors after suffering sharp losses in the previous days, decide, emotionally, sell their portfolios at any price. Thus sales of some investors cause sales of others. When this movement leads to extreme prices, many hedge funds, who held positions vendors in the market, start to buy them.

Rumors emerge that inflation remains controlled and is not excluded that the Fed resume the acquisition of debt instruments. These rumors not only fend off fears of an early increase in interest rates as they open the possibility of the FED to inject more liquidity into the economy.

The recovery of European markets started to rise strongly from Friday, it’s potential momentum is hard to anticipate, should be volatile and susceptible to shocks. In this initial phase, the most cyclical stocks will be distinguished, including the oil companies which have suffered very significant losses due to the sharp drop in the price of crude.
The earnings season will gain a greater intensity in Europe this week. The results of European companies are an important issue but at this stage, it will be the behavior of American markets, the main catalyst of the indices of the Old Continent.

Stocks are rising, prolonging the recovery from last week.

The climb is technical and relates to the behavior of the American market. The recovery of American stocks force many fund managers to increase their market exposure in order to monitor the recovery of their benchmarks (benchmark).

Recent statements by senior Fed induced investors to have a more optimistic outlook regarding the Central Bank meeting next week. The interventions of some members of the Central Bank envision a more conciliatory stance of monetary policy and as such favorable for equity markets.

American companies continue to deliver results that exceed analysts’ estimates.

The presentation of good results by relevant companies and better macro data, helped to feed the confidence of investors.

Market European session today was essentially marked by the reaction of investors to the publication of the PMI indices (Purchasing Managers Index) concerning the Eurozone. The reading on the manufacturing industry was a positive surprise.

Banking shares traded volatile as investors position themselves before the publication of the results of stress tests of the ECB. These results have been preceded by many rumors but some Italian and Greek banks may not pass.
The news of a new case of Ebola in the USA increases the negative psychological impact, which may penalize the airlines.
American markets remain high and the main drivers were the good results of some relevant companies.

Yesterday, the results of the stress tests, prepared by EBA (European regulator of the banking sector) in cooperation with the ECB and the AQR program were disclosed.

The AQR (Asset Quality Review), the responsibility of the ECB consists of a review of asset quality and ability to absorb losses. 123 European banks were submitted to stress tests and 130 European banks to the AQR program. The stress tests are a series of simulations of how certain scenarios would have an impact on the level of European capital position, the risk sensitivity and exposure to sovereign debt banks.