VectorVest Stock Trading Tool & Key Risk Events this week

Last night I went to a Zaks Cafe presentation at a cool pub in Notting Hill.

The key part of the evening was a pitch from Vectorvest.  VV was founded in the US but now also operates in South Africa and the UK.  David Paul (who has been trading since 1982!!), who was one of the coaches of the person who is now guiding me, is taking care of the UK arm of the company.  VV is primarily aimed at traders and investors who look to trade in stocks/shares in individual companies in markets around the world (US, FTSE, South Africa, ASX etc). VV is a tool for analyzing thousands of individual stocks from both a fundamental and a technical perspective and taking all that in the context of the overall market. It’s not possible to trade through the tool – so you still need to arrange your own broker.  However the tool helps you to produce a short-list of potential companies for you to look at.  The service is provided at quite a cheap price – seems like US$59/month – which is pretty much nothing if you have a decent bankroll.  You can choose between end of day data or real-time data (the latter is a bit more).  You will need to go to their website to check this out in detail.  I am just going on what i remember from last night from the speaker and from chatting with some attendees who already use the product.

being in the position where I am trying to focus on being good at knowing three single instruments, and trading these from the 5-minute timeframe, the idea of scanning through thousands of potential companies and trading them off a daily chart seems very daunting to me.

Later in the evening, over more bottles of beer, we discussed the pros and cons of trading in stocks versus trading something like oil, or forex, or an index.  My main argument here is that there are so many fundamental issues that can affect an individual company that a retail trader simply cannot expect to win.  Whereas if you are trading an index all you really got to know is the main economic announcements and know the chart.  I talked about this a couple of weeks ago in more detail, discussing technical versus fundamental analysis.

So the idea of potentially trading something out of a bucket of a thousand instruments seems unwise to me.  Though I am sure that there are other people to whom the product might be well suited.

Why is the FTSE100 lagging the DAX and the US indices?

Zak Mir also provided his view on quite a few charts during the presentation and he was also able to explain to me why the FTSE100 index seems to be lagging behind the DAX, and really lagging behind the US indices.  He said this was most likely due to the FTSE having a large contingent of oil and mining stocks.  As the prices of both iron ore and oil have been falling significantly lately, this has depressed the share price of stocks in those sectors, which consequently puts downward pressure on the FTSE100 index. Great explanation – thanks Zak.

Swiss Referendum on Gold & OPEC Meeting

On the 30th November there will be a Swiss referendum on something to do with gold (how’s that for a good explanation?).  This could have big impacts on the price of gold, and secondly on the CHF forex pairs – in particular bear in mind that EURCHF is currently trading in close proximity to the 1.2000 floor set as the barrier by the Swiss National Bank (SNB).  The SNB says that it will not let the forex rate drop below 1.2000 – meaning that at that level they will start selling Swiss Francs so that the Euro-Swiss Franc rate will stay above 1.2000.  This is an example of what we call central bank intervention.

On Thursday there is a big OPEC meeting.  At this meeting there will be discussion as to the production/supply levels of crude oil going forward.  This is likely to have a big impact on the price of crude oil.  Interestingly, as the US is celebrating Thanksgiving Day on Thursday, this will cause the commodity markets to be a lot thinner (thinner meaning lower volume). Wouldn’t a big risk event such as an OPEC meeting combined with closed US markets be a potential for having REALLY BIG moves in the oil market?

PS: I am not trading today, nor am I at the office – I am too tired after having worked too many weekends, and from drinking too much beer last night – I blame the couple of traders whom I had the pleasure of hanging out with last night!

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