The Big Boys, page-477

NCM: great trade @CaptainGrumpy. I did all that work analysing NCM back on 23^rd November and didn’t make a dollar. Glad someone did though. Just re-read my post and I had concluded that it was too volatile and unpredictable to trade at that time, but the past month it has been obvious it was going to be the go to trade in times of market stress. That pink channel on the monthly did work well. Also resistance marked at the 38.2% ATH level of $6.61 is not a bad place to take profits. It can run over a bit yet but you’ve grabbed most of the profit I suspect and its volatile enough it can drop back easily if equities have a little rally this week or so.

I reckon you could have had a bit of leverage in that one and got more out of it. Mind you, just buying the shares probably made it easier to enter and hold. Well done.

MQG: Just on Macquarie, I’ve referenced a chart I posted 10 months ago on 14^th April 2015 in response to a comment from @Henry Porter. This was actually the start of my thinking about a bear reversal for markets and I made a lot of subsequent posts on this in the following months. But it’s quite instructive right now.

From that April 15 post, MQG when into a rising wedge pattern (seen on the weekly) which is a distribution phase, whilst I recall there was lots of really good news media about Macquarie at the time. So funds as early as May, June were taking the opportunity to distribute. Then we had the August falls, a 9 week counter-trend, and it started down again in October wehre I loaded up on shorts. Then the fall paused for 7 weeks (starting with the Paris attacks, thanksgiving, markets propped up for the rate rise and Xmas rally) and finally broke down again in January. Today, MQG hit my $60.76 target to complete that entire move that I’ve been tracking and trading since April last year and which has anchored my whole view on markets for that period.

I’m actually a bit uncertain now of the path, although it’s definitely a bear market and MQG will ultimately take the low road direction marked in Black dotted line rather than the uptrend marked in Pink dotted (Just direction not final levels)

But it’s at a really significant reference point and support level here at 38.2% of the last major range. Monthly charts aren’t exact at the daily level and need a bit of wiggle room. It could fall another $2 or so down into that light blue zone shown below to $58.50, but it’s close enough to the bottom and completing this move now. MQG is a very technical chart and a lot of professional traders will be noting this 38.2% level. We should get a strong reaction back up from about here for a period once it stabilises. Where MQG goes, so the market will go.

Anyway I was a bit gutted in exiting my Feb Puts yesterday, as todays drop meant I left a meaningful bit on the table. I’m not sure how much time it needs to hang around this level and could drop a bit and go sideways for a week or two. That sort of aligns with your thinking this week around Janet Yellens speech. What day is that? I opened a long today anyway in MQG for the bounce which I’ll add to. I’m a bit reluctant to wait for confirmation these days as the big moves in each direction are really strong, so it might go against me for a bit but happy to start getting set long for the moment.

Monthly Chart below is an update, originally posted April 2015: