Stock and Crypto Market Update: What's Happening in the Markets This Week?

Hi, Adrian Reid here, founder of Enlightened stock trading. It's the 24th of September 2022 and this is my weekly market update and this week is a bear full filled week. Got to tell you there's not a whole lot of joy on the upside in any of the markets around the world at the moment. On the screen here we've got the s and P500 and as you can see the rally that we had last week that failed I mentioned that in my last weekly update has continued to weaken and we're now all the way down at the June lows so very much in bear market territory. If this low gets breached here then looking forward to a much bigger route I don't know where it's going to end up but I certainly wouldn't be hoping for a huge amount of joy on the long side in the S and P at the moment on the asx.

All ordinaries much the same picture although if we compare these two charts you can see that the S and P is definitely weaker than the asx. ASX is holding up a lot stronger. It's much further above its June lows. So let's see what happens there. I've got more, I've got long positions on in Australia, still haven't exited but they're holding up nicely mostly because of some of the mining stocks are doing well. But this, this index is definitely in bear market territory as well. Here's the Hang Seng, the Hong Kong index and this picture really hasn't changed now for months and months. We're in a slow, steady downtrend. There was a big gap here. If we zoom right in we can see this. There's a big gap down here towards the end of the week which was great for my shorts in Hong Kong but not so great if you are buying and hoping which I hope none of you are doing.

The Canadian stock market is again similar picture to Australia. Let's just compare these two real quick.

Actually to be honest it's probably more similar to the US market at the moment. There's a big gap down here in Canada towards the end of the week. So again if we break these lows we're sort of expecting a big route to the downside. So not a lot of long side action in Canada either. But if you're a short seller, all good. Happy days. I've added a couple of extra charts to the mix this week. A lot of people like to invest in gold when inflation is high. I suggest that the chart says that this is Not a great idea. Right now the chart of gold is definitely in a bear market as well. Well below the 200 day moving average and trending down, making new lows. So not a great hedge against inflation. Certainly a good way to destroy your wealth right now, holding gold. I've put a chart here of the 20 year bond ETF in the US and obviously interest rates have been rising so we expect this ETF to get smashed and it's making new lows as well. Very, very big down market. So if you short that, well done. If you're long it. I feel sorry for you. I'm sorry. I've got charts of Bitcoin and Ethereum as well. Story hasn't changed. Basically the last half of the week there was pretty low volatility for the last half of the week here in Bitcoin we're just sort of bouncing along the lows waiting to see if we're going to break through to new lows or recovery. Certainly not holding my breath for a big rally here. If we do break through this, this low from back in July. Let's have a look here. Just draw a line in the chart. Yeah, we're sort of bouncing around to that same level. So if we have a meaningful breakdown below 18,000 we could have a long way to fall, which would kind of be exciting to be honest, because I'd love all of the heat to just come out of the crypto market finally like one final capitulation because if that happened then we could finally set up for a new long, a new bull run that, that might make some serious money. The picture on Ethereum is a little stronger than Bitcoin but still very, very weak. Definitely, definitely bear market territory. So all the markets around the world are more or less the same right now. If you're long only it's going to be hurting and if you can trade long short then you'll be doing a lot better. Next, what I want to do is just share an update on some of my trading systems. I'm not going to do all of them because it' long and I got a bit of feedback last week that my video was too long. So I've got a couple here that I wanted to share. So let me just bring one up.

First one is my Australian trend following system and as you could imagine in the last couple of months we've had a bit of a rough time of it that we're in a bit of a drawdown. If you look at the.

I've lost my words. If you look at the logarithmic scale of the equity curve, you can see the, the system is very much intact. It's just in a bit of a drawdown at the moment. You can see the drawdown sitting at about 14.5% right now. And if you look at the monthly returns, you can see why. You know, on the long side, 2022 has not been the most fun ever. A couple of down months here, relatively small. We had one good month in the middle of the year in July, but apart from that it's been, it's been pretty sad since, since the beginning of the year. So alongside trend following, not brilliant, but as I said earlier, some of the mining stocks are sort of holding my portfolio up on that. But.

You really want to make sure that you allocated your portfolio to both long and short in market conditions like this so that you don't just end up eroding value constantly in this bear market. Okay, next one I've got is my weekly long side trend following system on the asx. This one is a little different because this weekly system trades quite volatile stocks and a lot of them are small cap miners and so some of those have done really well recently. You can see here, there's this bit of a rally towards the end of the equity curve on the far right hand side here and you can see the drawdown. We're down just over 20% drawdown but it's now up just under 5% because we had a really strong. Sorry about that. We had a really strong month in August and September. A couple of good trades in there. So that's doing reasonably well all things considered, considering how well the market is, how much the market is falling in my Australian mean reversion system. So there's a bit of focus on Australia this week. I'll dig into other countries in a bit more detail next time. My mean reversion system is largely out of the market, so you can see here it's been pretty much flat for the last little while. It's in a smidge of a drawdown. So just 3% down at the moment. And you can see here last few months there's been more or less no trading, so the raising filter has kept it out of the market, which is great because it's a long side system and I don't want to be buying dips in a bear market because that's just a road to pain.

Here is the, the US short side system which has been doing really, really well because we're in a killer bear market at the moment. So you can see we're at new equity highs here. And if we scroll down and just look at the monthly returns and the annual return, we're up 20% so far this year with the US short side system. And in September, where we just loaded up again, we're up 16% on that system, which is great. So this really illustrates why you want to have long and short exposure or long short systems in your portfolio and make sure that you allocate capital sort of broadly across long and short, rather than just being long only. So that's US short side, got the Hong Kong short system, which is also at all time equity highs. This system's had a really great run over the last couple of years and at equity highs again at the end of this week. And you can see here, the last three months have been doing pretty well, just edging its way up as the market just grinds its way down into oblivion. What else we got here? I've got the crypto short system because as we saw on the Bitcoin and Ethereum charts, well and truly a bear market in crypto. You can see here the crypto short system is quite volatile because obviously the crypto market is pretty volatile. So we're not quite at equity highs here. We had an equity high a couple of months ago and then had a bit of a drawdown with those rallies in the crypto market, but still holding up well, all things considered. And that System is up 136% for the year on the backtest. And the last two months have been really, well, really good. You see, we had a pretty decent sized drawdown in July, but that was following a couple of really good months. So all in all, this system is a really nice addition to the portfolio. It's really great to have some short crypto exposure because the bear markets in crypto are pretty brutal. So nice to do that. So that's the system update. The trading psychology tip for this week is really one of resistance. One of the things that I notice is that a lot of traders resist doing things that they really probably deep down know they should be doing. And I want to ask you, are you resisting anything in your trading? If you're resisting taking your exit signals because you're hoping that the market's going to turn around if you're resisting backtesting that system to expand your portfolio, if you're resisting going on the short side, entering the market on the short side, because you've only ever traded on the long side, if you're resisting trading systematically because You've never coded anything before. You've never run a backtest. If you find yourself resisting anything in your trading that you know is going to improve your results, then that's where you've got to focus your trading psychology work. And I would suggest that if you find these resistances to things that you know are going to help you, then spend some time journaling and understand the root cause of the resistance. Because once you can unlock some of those things, you can gain momentum much more quickly and really improve and build your portfolio and start getting much better trading results. So spend some time this weekend before the market opens on Monday and dig into where are your resistances in your trading and if you need help to unlock those or move forward, let me know. Send me a message, reply to this email and or comment below the video and I'll give you some direction how you can move forward and start eliminating those resistances.

I also want to highlight one of our members this week, members of the Trader Success System. And I wanted to highlight Tracy. I think I've actually highlighted Tracy before, but she's just such a great example of a member of ours who came into trading with no experience, no coding ability, no experience in the markets or very little and is really making awesome, awesome progress. One of the big.

Challenges that a lot of new traders have when they're looking at a program like the Trader Success System is objections like or concerns like, oh, I don't know how to code or I've never backtested before, I haven't traded, maybe I should just start with the basics and so on. A lot of the time those objections or those concerns are really just your own little voice getting in the way of your progress. Because I'm yet to find a single person who can't pick this up if they don't throw themselves into the content in the Trade Success System and ask questions regularly and turn up for the live sessions. So Tracy's doing that fantastically well, making great progress and really, really growing as a trader. So well done. Tracey. Thrilled to have you in the program. So glad that you're with us and growing as a trader. Nice, nice job. Finally, just EST news. To be honest, there's not actually a whole lot going on at EST this week, but I did have a couple of really great sessions with my System Builders Club group that I wanted to share with you because what I'm doing and the System Builders Club is a meeting I have every week with members of the Trader Success System where we review new trading systems that the members are working on. But this week I was in the hot seat because I was developing, I am developing a new trend following system for the Canadian stock market. And the way I'm running this is in the Builders Club. I'm developing the system live with the participants of System Builders Club. And so we've, we're about 2/3 of the way through the process. The system is looking really great. We're sitting at a compound annual return over 20 years of about 20% with the 20 drawdown of less than 20% which is fantastic. And the system is really stable and robust. So I'm really, really hopeful that that system is going to end up, end up a winner and pass all of the tests and find its way into the Trader Success System for our members to trade with. So I'm looking forward to that. That's, that's the big thing that's going on with EST this week. Now I'm traveling for the next two weeks. I've got a week with my family down in Melbourne or in Country Victoria actually. My daughter's going to camp and so my wife and I are going to hang out with our son in Country Victoria. My son's super excited because we're going to go to a shooting range which I've never done before. So watch out for an update on that next week and then the week after that. We're going to spend some time in the theme parks in the Gold coast on roller coasters and water slides and all that sort of thing. That should be super cool. It's school holiday time so hopefully we have a great time. The kids are super excited. And then when we get back after the Gold coast we're picking up a puppy. Can you believe it? Since we are staying in Australia and not traveling for the next five years, my kids have decided that it's time that we finally had a dog. And so we're picking up a new dog. His name is Gizmo and he is the cutest thing you've ever seen in your whole life. Watch out for photos when I get back in a couple of weeks. So that's all for this week's update. If you are not trading on the short side, you need to get into the Trader Success System and learn how because we are in bear, bear, bear market territory. Hope that's helpful. If you got any questions, comment below the video or reply to the email. You got this on and I'll help you out. I'll see you in the next video. Bye for now.