We remain in unprecedented times with Covid-19 continuing to affect our lives. Yesterday saw the announcement of lockdown to be extended until 7th May, at least. Last Wednesday the Volatility Index (VIX) was trading at 43 and we asked Has The Stock Market Bottomed Yet?
Currently the CBOE (VIX) is trading at 39 and this is one index we are monitoring closely to help decide when to resume sending day trade signals. Volatility peaked on 18th March when it hit 85.4. The VIX index spent the majority of 2019 trading between 10 and 20 and it is unlikely to return to those levels in the immediate future.
Ideally, we would like to see volatility below 30 before we commence delivering signals. We are also looking for intraday spreads to narrow as this affects trade value. Adapting our trade orders for the short term is definitely a possibility by reducing trade size, allowing us to increase stop loss distance. Many of the major Forex pairs are trading within a reasonable range, less affected by daily market volatility. GBP/USD, EUR/USD, EUR/GBP and USD/JPY are the currency pairs that we can adapt to our set and forget trade signals model.
We are no closer to determine whether the market has bottomed. No easing in Covid-19, extended lockdowns and insufficient testing fuels uncertainty. However, the financial markets seemed to have adapted to the situation better than expected. We are currently trading higher than when I wrote previously. The FTSE has added another 1.9%, the DAX index 2.6% and the DOW Jones Index has climbed 4.4%. Nevertheless, it remains premature to say that we have a V-Shaped recovery set in place. A re-test of the lows set over 3 weeks ago is still highly probable.
We prefer to remain on the sidelines. We managed a return of 70% in 2019 for our PREMIUM service using fairly low leverage. Further performance details can be seen here: Annual Return.
Coming Soon: We are in the process of testing various automated day trading funds with our own money. Once we are convinced with their integrity, performance and sustainability, we will be bringing it to your attention.
Try to make the most of this extended lockdown!