Week in Review


Another week trading within a very small range, we see the XJO trading sideways holding ground around the important 5200ish level.

Over the next week, look for small falls on the XJO down towards the rising trend line, this opinion is based on both the CCI and MACD which are just about to cross to the downside, we should see the market retesting the current trend at around the 5100 level.

This level is important as it will show how strong the overall market is, should the XJO bounce off the rising trend line, we could easily see the market rising towards the 5500 level within a few months. Failure at 5100 will see us fall quickly back towards the 4900 level.

A Shift from Financials Technically

The financial sector has led the charge over the last few months. In the last 2 weeks we have seen a noticeable drop off in strength, partly because of the dividend pressures in May. Nonetheless the MACD has signalled a move to the short side, with the CCI about to do the same. Notice the chart moving towards a triangle shape with the centre being support at the 5700ish level. Continue reading “Week in Review”


If you have ever wanted to take a little more control over your superannuation and not bother with a self managed superannuation fund this may be of interest.
of us that are/were self employed This could be quite valuable for those

without a lot of super, perhaps an smsf is too expensive or too time consuming – the AMG product may be just what the doctor ordered.

If  your super its just sitting in a dusty fund collecting the minimum – take a look.

Let me know if you would like to explore this



Options Writing on your portfolio

One of the things I love about options is that there is nearly a strategy for every market condition.

Rather than using the same strategy accross all conditions which may give you questionable results, tailer made strategies can be used to take advantage of current conditions. One strategy that has been adding a lot of value to shares inside an existing portfolio is Covered Written Calls.

Below is an image showing trades taken on an actual account over the last few months, prices noted are per share in cents. Each trade places cash back into the trading account, when the trade is taken. Brokerage is not considered in this diagram.

Now there is risk with any strategy, understanding how to manage that risk is the secret to being profiatble with any strategy.

So if your leaning towards the risk averse end and you would like to add some value to your return, you do have a few choices.

If you would like some examples or a couple of strategies that may suit your style, please give me a call on 0402 855 800 or shoot me an email to steve.soars@gmail.com

Moving On

After being with the Sharemarket College for the last 8 years, I have decided to move on.

I have started with Octa Phillip Financial Group, they have offices all over Australia. A great bunch of people with loads more resources and facilities. Take a look at their website at www.octaphillip.com

I wish to thank all the clients for their support and hope that they continue to learn what they need to make more informed trading decisions.

I would love to keep in contact, feel free to give me a call on 0402 855 800 or send me an email on steve.soars@gmail.com

May all your trades be profitable.



2011 hasn’t shown a lot of joy for most traders, with sharp unexpected movements. At times it was a toss of a coin which direction the market was going, often led by rumours and speculation from distant corners of the world. Maybe this is the world we trade in now – gone is logic and common sense, 2011 saw the rise of the headline grabbing sensationalism.

I think we all love the way information flows now, but the downside is if a journalist or blogger in the back-blocks of Spain has a deadline – his/her story has the ability to send instant shockwaves or ripples through the worlds financial markets within minutes. In the hours following the facts will be confirmed or rejected and the market starts a correction. But the initial market reaction is the one that has been hurting.

Maybe next year we need to turn off the news including twitter feeds and get back to the business of dealing with financial markets in a logical controlled manner.

Happy Xmas

Trading in Chaos

Trading in current market conditions is hard – there is no getting away from that fact. But how has your trading plan or style changed as a result?

As traders we continually need to tweak our trading plan to take advantage of current conditions. Currently we are facing small trends sometimes only days and periods of uncertainty.

Lets look at a couple of things that you should be doing in the current uncertain times;

  1. Keep stop losses further away, this will also force you to take smaller positions sizes to maintain your important risk management rules.
  2. If the market you are trading does continue to be profitable increasing your position can be viable – remember to use appropriate risk strategies.
  3. Be patient – wait for the trade to identify itself, to not try to pick every change of direction. If there is no trade today, there will be one shortly.
  4. Remove all lines from your charts and reapply  – this allows you to revisit the charts with a new perspective.
  5. Investigate different markets – if you normally trade shares or cfd’s, look at forex or commodities – remember to  control your risk and exposure.
  6. Always trade with the strongest trend.
  7. Be willing to accept smaller profits on your trades, gone are the days of weekly or monthly short term trades – short term trades are being currently measured in days or even hours.
  8. Lock in profit as your trade improves, this requires more attention but it is essential in current conditions.
  9. Draw a line in the sand – if you are suffering losses, identify a level in your account where you will stop and take a break – everything looks different after a week or so of inactivity, hopefully this will allow you to refocus and make smarter trading choices.

Happy Trading

This time of year

Over the next few weeks, I will sit down review my long term portfolio and make some changes before the end of the financial year.

This year has seen some highs and lows on our market, in my portfolio I have success stories like Lynas Corp and dismal failures like Elders. So now its time to decide what to keep, and more importantly whether I need to crystalise any of the losses or continue to hold the positions.

What sectors in the market are moving ahead and what sectors are falling behind, is the balance inside my portfolio still effective or do I need to change the weight?

Once I have decided what I will take a loss on (if anything), it allows 6 weeks to find the best possible market timing to make the transaction – the last thing I want to do is to make these decisions late in June and just take what the market is giving me.

Remember, regular portfolio updates are an important part of your investments, especially when the tax man is ready to pounce.

What are some of your years highs and lows?

Cause and Effect

We all want to do the best job we can do, for me at the moment its about building the best relationships and getting the very best returns for the clients I take care of. Exceeding their expectations and surpassing the revenue levels to where bonuses kick in, systematically growing my little corner day after day – this can be made easier or harder by other staff and management. Either way I will strive to do the best job I can for the clients, the business and myself. — This is my pledge.

When you are in a great mood – everyone around you seems happy.
When you are in a crappy mood – everything seems harder, people respond to you differently.

You get good news –> you react positively –> you spread your joy around.
You get bad news –> you react negatively –> you spread your negativity around.

What you do is effecting those around you – this isn’t new or insightful, its fact.
If you act like a dick people will treat you and think of you like a dick.
So its important to act as though you want others to treat you.

When dealing with people, it is essential that you manage their expectations as part of the process. Whether your performance is outstanding or weaker than expected, promises kept or broken – the perception is what holds the ongoing relationship together, for clients, staff and partners.

We can only ever control our self, if we do the best we can do, improve day after day and exceed expectations – others will notice, and even if they don’t – if we are performing at our best that should be making us happy.

Always try to put out positives rather than negatives.

Range bound or an opportunity?

In the last 13 months the AXJO has been trading sideways, I’m sure not a surprise to anyone. Those trading this period have been consistently scratching their heads about future direction – even professional traders have had troubles.

Looking at the chart (right) we can see the extended range between the peaks and troughs of the last year spanning around 800 points – take a mid point to that around 4580 and notice that within a small range how many times the market has changed direction.

During the last year we have been bombarded with tiny wins and losses from not only on our shores but from around the world – most of which should have no bearing on our market but alas they have. When we overlay the DJI onto the AXJO (below) we can see that the US market is acting a little bit more stable than ours. I have also added additional 1/2 markers from the mid point to the extremities which have also acted as support/resistance points.

This direct comparison surprised me a little considering the constant bombardment of “how strong our economy is”, and “how unstable the US is”. On the other hand it also shows us that there may be better opportunities in Australia than in the USA.

From the chart right, we are seeing the 50 day moving average now start to cross the 200 day moving average, this has always been a good sign for trend traders, lets hope our index can break out of this tight range and forge some solid gains over the next few months.

Happy Trading

Stages of Education

From my last post I received a comment (obviously from someone who disagreed with my opinion), but they declined to identify themselves, and I don’t think they actually understood my angle so i didn’t post it as a comment. The first paragraph is pasted below, I felt I need not post the flaming which followed.

“i love how someone who has made a living teaching people useless information they could learn visiting the asx site for 5 minutes takes a slag at advisers who put their balls on the line day in day out in an attempt to make their clients some money.”

(Just a note, I do much more advisory work than training – the lines often blur, but I have not delivered basic training for a number of years. And if you read the article I was supporting advisers)

This got me thinking about education, he/she is right – what is taught by SMC (my employer) is freely available from many sources. But so is 99% of the worlds information. So why do we need specialist educators?

In the days before mass media, information was harder to attain – though not impossible. Since the Internet  information is everywhere – google knows everything. The problem remains that any idiot (including me and the poster above) has the ability to put information online. Is this information true, accurate, impartial or an angle to sell viagra?

  • “Formal education will make you a living; self-education will make you a fortune.” — Jim Rohn

I have always been an advocate of free information, the more information you have at your disposal the more “informed” you can be with your assessment. This is pointed to people that are a) able to make a decision and b) happy to live with the consequences of their actions.

The problem with free information is that somebody has to pay for this resource, we all have to fund our lives, everything costs money – whether you pay this up front (as in fee for service) or from the back end (as in hidden charges) everything costs. Considering anything different is a little naive. Some would say that free information is essentially worthless.

  • “Education costs money, but then so does ignorance.” — Sir Claus Moser

With financial information costs can be extreme – both from up front charges or in self learning, learning from your own mistakes can be far more expensive than any up front fee. I consider myself self taught, but over the years I have attended many training sessions on various subjects, both formal and non formal courses. Some have been valuable, others a waste of time and money.

The courses that I believe to be wasteful, were probably to do with a) my ability to accept and use the information effectively at that time, b) my frame of mind to implement this information and perhaps c) my ability to relate to the person delivering the course and understand the concepts. The courses themselves are not to blame.

The courses I have gotten value from all have the basic fundamentals of  a) they have simple concepts b) they are advanced enough to challenge me but not too advanced to overwhelm and most importantly c) I have been in a mental position to accept the information.

There is a lot of information about trading or investing out there in the ether – you can just go grab it but before you do, you may also need to a) assess its validity to you and the current conditions to make sure its still valid b) have a method of testing prior to implementation to gauge the results and c) be able to justify the risk to reward.

My opinion is that everyone needs education on managing their finances, go read a book, do a course with someone reputable and accredited – but learn about this stuff.

Especially with information about trading, I feel that courses can only take you so far – after that your own observation and discipline will be the deciding fact. Trading is an individual thing, being able to make your own decisions based on proven set of guidelines will give you a great advantage, more still being able to evaluate and change your systems when they don’t perform is the real trick.

  • “Teachers open the door, but you must enter by yourself.” — Chinese Proverb

After the basic information (even on complex subjects) has been learnt, the only avenue for advancement is a) self evolution or b) mentoring. I think  successful people are always students that keep learning, adapting and evolving.

Happy Trading