Market View; World Stock Indexes; Trading Journal

Investors await the disclosure of relevant macroeconomic data on Wednesday (17th September). The perspective of interest rates, to be announced by 19:00h will be crucial to further developments.
The markets are still suffering the effects from the decline in industrial production, and are aligned with the information disclosed through the financial media from last week.
It is speculated that the economy has made the necessary recovery to justify the increase in interest rates.
I am not convinced that the stock market has ended it’s correction, believing that it will keep falling until the the disclosure of relevant key data that may justify the rise to new highs.

The month of September showed us two very different weeks in the European markets, the first was a continuation of the “bullish” sentiment that began after the inversion from August 8th and the second week revealed a corrective movement that followed the strong rally.
As mentioned in the previous publication, and shown by the prices from recent sessions, the correction had not yet reached significant levels to justify any return to the rising of prices. However we may not say that this retraction will be largely expressed, therefore we can easily foresee a new attempt for the market to reach new highs, specially if we have in mind the incredible behavior of the “Locomotive” S&P 500.
Happy trading. :-)

With the aim of boosting the demand for credit and economic growth, the People’s Bank of China will inject liquidity into the financial system. The latest economic data have raised concerns about the growth of the world’s second largest economy.
The central bank of China joined the European counterpart in the decision to inject liquidity to combat weak economic growth, which highlights the divergence of policies among the largest economies in the world, to the extent that the United States is, on the contrary, reducing stimulus.
Chinese government has mentioned an injection of 500 billion yuan (about € 62.7 billion) in the five largest banks in the country.

Discipline – The key to profit from your advantage
The primary goal of the aspiring trader who initiates the first steps in the financial markets, should be to establish a trading strategy whose performance is consistently good.
The ability to create, maintain and improve this strategy, which in turn, will allow us to develop a career in this field, is directly related to consistency. Consistency in performance comes from the control and effectiveness of decision making in times of extreme pressure and emotion in the markets, nowadays very frequent, given the macro economic divergences we currently face.

Find your Edge: The Secret to profitable trading
One of the main characteristics of a neo-trader, who performs consistently good, is the ability to participate in the market when he identifies an Edge, and carefully selects high probability winning opportunities.
It is a priority then, to dedicate time and effort in developing our own Edge. We should then, provide prolonged observation and interaction with markets, in order to identify the techniques, approaches, types of trade, phases of the day, levels of relevant price and most importantly, market behavior that we strongly believe will provide the opportunity for regular and frequent profit, with quantifiable and limited risk.

Knowledge and involvement: Preservation Of Capital
Even if you have identified your “Edge”, one shouldn’t forget is competing in the global financial markets against other participants which can move the markets significantly (Ex: Central Banks, Primary Dealers, hedge funds, pension funds).
Commonly, inexperienced traders adopt an aggressive stance, attracted by the “potential” reward such behavior allegedly provides. In these cases, remaining out of the market, or if you have the knowledge, aligning with these larger “entities” rather than challenging them, will improve the chances of achieving a truly exceptional consistency, which will then increase your talent in the effective implementation of your “trading tools”. It is also recommended to be very cautious with extreme volatility. A “neo-trader” who is trading on the basis of his identified “Edge” has his chances drastically reduced in times of high volatility.

The relevance of Discipline and Self-Control
The essence of the success of this highly effective approach to maximize your “Edge” is the individual discipline in the face of apparently high profit opportunities. Only the repeated practice of self regulated discipline can reduce the tendency to act on impulse. For those who are not prepared to solve this problem, this tendency will never disappear and consistency will remain unreachable. So for the vast majority who were not born with the gift of self control, a powerful technique is to written record in the form of a daily trading plan which clearly define the goals and objectives. A disciplined routine analysis before the markets open, and the structuring of the trading day, are essential to avoid the temptation to trade on impulse. We intend to develop the instincts of profitable trading, that must be present during the selected trading period, so, with advance planning, we eliminate the need to decide on the spur of the moment, and this will previously allow us to know how, when and why shall we place a trade.

Here's a list of my favorite stocks from NYSE:
THE BOEING COMPANY
CATERPILLAR INC.
CHEVRON CORPORATION
E. I. DU PONT DE NEMOURS AND COMPANY
THE WALT DISNEY COMPANY
GENERAL ELECTRIC COMPANY
THE GOLDMAN SACHS GROUP, INC.
THE HOME DEPOT, INC.
INTERNATIONAL BUSINESS MACHINES CORPORATION
JOHNSON & JOHNSON
JPMORGAN CHASE & CO.
THE COCA-COLA COMPANY
MCDONALD’S CORP.
3M COMPANY
MERCK & CO. INC.
NIKE, INC.
PFIZER INC.
THE PROCTER & GAMBLE COMPANY
AT&T, INC.
THE TRAVELERS COMPANIES, INC.
UNITEDHEALTH GROUP INCORPORATED
UNITED TECHNOLOGIES CORP.
VISA INC.
VERIZON COMMUNICATIONS INC.
WAL-MART STORES INC.
EXXON MOBIL CORPORATION

Discipline – Conclusion
For many “neo-traders”, trading in order to generate consistent profitability is an insurmountable challenge .
The knowledge and skills required to achieve consistent performance are very broad, so the relevant experience and achievement of sufficient aptitude, becomes very difficult, especially when such experience does not always result in financial returns at the beginning of your career . However, perseverance and resilient search of your own “Edge”, the self-discipline of the daily advance planning approach and its implementation, will tip the balance in your favor.
Results will not come quickly, and if that happens, they tend not to last. A disciplined approach to trading is an investment in your future that will allow you to reap consistent and enduring rewards if you have the strength of character to implement it.

The stock market have been consolidating this morning and investors are waiting data release on Gross Domestic Product and it’s impact on interest rates measures in the world’s largest economy.
Apart from the main economic release, the US GDP, final figures will show the Thomson Reuters/University of Michigan consumer-sentiment index.
In the U.K., lawmakers will vote today on whether to authorize airstrikes on Islamic State positions in Iraq. Military action may start within days if the proposal is approved.

Pro-democracy protests in Hong Kong induced to the fall of stocks in Asian markets, and in turn produced the same effect in the European market. The economic data release of the German Economy, the U.S Consumer Spending and personal income data, did not change the market sentiment, as it is not presented too far from expectations. In the euro zone consumer confidence declined in September and the value of stocks remained low.
The European economy continues to weaken and the demonstrations in Hong Kong add to uncertainty.
Investors should remain cautious until the next earnings season starts, so in the short term is not expected to emerge signs of strength in the stock market.

The stock market kept falling in the day. EBay earnings failed to offset the decline in consumer confidence.
The uncertainty is large and many investors are waiting for the next catalyst to make their entry in the markets.
Protests in Hong Kong remain as a political concern and also remain the rumors that the Fed may raise the interest rates sooner than anticipated.
The SP500 fell about 1.75% in September, with the Fed on course to end its monthly bond buying program, in October.

An important issue for the successful trader
The pressure for quick profits leads to Over Leverage and this reduces the ability of the trader to align with the market, in that it eliminates the required presence of mind to keep our belief and raises the risk of unsustainable loss.

The Over Leverage leads to the shortening of the time to make gains, making it more difficult to ride winning trade ideas. An important virtue of the successful trader is precisely the ability to preserve winning positions.
If many are Over Leveraged, there is a potential advantage to increase the duration of the trade, as when others are shaken, we may negotiate the long-term movements more effectively.

Stocks Gain Before Jobs Data
Yesterday the North American indexes ended the session almost unchanged, rebounding from losses earlier in the session, a movement that seems to have been purely technical, since some titles were already oversold. In the European market, the situation was quite different, with the major indexes declining more than 2%, as investors react negatively to ECB President Mario Draghi’s speach, on concern the European Central Bank asset-buying plan won’t be enough to revive growth.
As investors assess the strength of the U.S. economy, analysts are predicting a return to gains of more than 200,000 in monthly nonfarm payrolls.

US macroeconomic data continues to exceed expectations, in which the employment numbers strengthen a recovery scenario for the American economy. However, after today’s opening, U.S. stocks fell, with the Standard & Poor’s 500 Index retreating after touching its average price for the past 50 days, as small-cap shares resumed a selloff following a fifth weekly decline.

This morning, Asian shares closed positive, reacting to the smaller number of protesters on the streets of Hong Kong.

The positive opening of major European indices, led to a marginal climb throughout the day. DAX30 was in decline throughout the day. It is important to notice that the German market was closed last Friday.

Despite the US stocks being stronger than the European, the stock market is falling in general.

The SP 500 index depreciates the second day and European stock markets follow in a sharp fall. Despite occasional recoveries, the markets continue to show signs of weakness and if nothing changes, a return to the minimum of August will not take long.

Here are the current factors of worry among investors:

Dubious economic data, some geopolitical risk, the rise of the dollar, the protests in Hong Kong, the fear of Ebola, the decline in oil prices. In addition the IMF cuts the forecast for global growth in 2015, warned about the risks of rising geopolitical tensions and also about a potential correction in the financial market with shares in speculative levels.

The decline in recent sessions leave some nervousness in the air, given the possibility to be tested the important support zone that represents the minimum of August. For the particular case of DAX30, the breaking down of this support may create an inversion, with bearish implications.
This does not necessarily mean we have to watch to a ‘crash’, but it is certain that from that moment onward the price action would present Lower Highs and Lower Lows, which are not witnessed for a few months.
The charts tell us that the long-term trend remains bullish, even with the break of the mentioned support.

Stocks climb, recovering from a minimum of two months, after the Fed´s minutes release, on speculation that the Fed will keep interest rates near zero, for more time than expected, amid concerns of slower global growth.

Technically, the European indices have broken the barrier of the minimum of the year and their medium term technical situation is significantly deteriorated. However it will be the behavior of the American stock market to determine the evolution of the European equities.