Happy New Year to all my readers (yes, the two of you!)
I trust you all enjoyed your holiday season and over-indulged in merriment with family, friends and loved ones.
As for myself I shut down my trading for most of the last couple of weeks of 2015 (apart from a few long term option positions).
I was fortunate enough to do well in the Bullbearings 2015 Tipster of the year competition with my tip to Buy USD/RUB back in Nov 2014. I’d like to publicly thank Janet Yellen and Vladimir Putin for their help and support – I couldn’t have done it without you guys!
I have had some time to reflect upon last year and consider the future for 2016. I shall share some (but not all) of my thoughts. I will work through them using my usual 4M’s of Trading format and will deliver them in various posts this week.
Part 1 – Markets:
2015: In terms of the FX, Indices and Commodities markets that I follow and trade, the trading year was dominated by these themes:
USD Strength – once again she was the big gorilla. BUY USD was the simple (and best) play of 2015
Commodity Currency weakness -CAD, AUD & NZD were hit hard off the back of the China /Commodity story
Emerging Market Bloodbath – I blogged frequently about the carnage in the BRICS and EM currencies. They provided great opportunity for longer term traders.
Commodities: They took an early bath as well. The main ones of Oil, Gold & Silver all pushed to new lows throughout the year.
Indices: After hitting new all-time highs in 2015 all of the major indices struggled in the second half of 2015
2016: So what can we expect this year?
USD Strength – I think it will continue, but not as strongly as we’ve seen. The easy money has been made in my view.
GBP – I think it will muddle along as the uncertainty of the referendum and Brexit hang-over it
EURO – The opinion is still out here- I have no real view at the moment
YEN – I have a sneaking feeling that the YEN maybe the winner this year. Lets wait and see.
Commodity Currencies: I think CAD will continue to suffer (due to Oil) but I foresee AUD and NZD providing us with a re-bound.
BRICS/EM – Good question. I don’t think the carnage is necessarily over – but maybe the pace of damage will slow and perhaps a bottom will start to form. (Though I see my old fave USDRUB pushed through the 71.30 resistance zone at the end of 2015.)
Commodities: Another good question – in my own view there is nothing to really push Gold or Oil north with any strength short of a major declared war (rather than the proxy undeclared war we’re fighting at the moment!)
Indices: after last years struggles will we see renewed optimism in the Equity Indices? To be honest I cant see it at the moment and I see (as I write this) that the Chinese Stock Market was once again halted this morning and the rest of the global indices have either gapped down or slid south. Not a great start to the year!
So with all that war, angst and uncertainty out there it would seem easy to be upset and miserable about the up-coming year. However as the late-great Ian Dury sang, there are always reasons to be cheerful We are traders after all and whatever markets do (go up, down or side-ways) there are always opportunities for well-educated, calm and patient traders
with a plan to profit from whatever happens.
I always say that each year I know there will be 3-6 Dominant trends that will emerge throughout the year in FXIC markets, though on the first trading day of the year I really have no idea where or when they’ll emerge. I just have to stay alert and remain open to whatever opportunities the markets offer me.
What do you think? I’ll happily hear your own thoughts on what we may see in markets this year
Let me also wish you every success in your own endeavours in the markets this year – may all your trades be of a health reward-to-risk!
Paul