Weekly Market Update: Navigating Global Stocks & Crypto Trends - 15 January 2024

Hey, Adrian Reed here, founder of Enlightened stock trading. It's 15th of January Monday and welcome to my new weekly market update format. I'm doing this on a Monday morning because on Friday afternoon the US markets are still trading Friday afternoon Australian time and I really don't like working on the weekend. So it seems to me that Monday morning is a perfect time to do a market update to catch you up on everything happened last week and also give you my thoughts for what's going on right now. So. So let's jump in and have a bit of a look at the global markets summary. The Nasdaq has really been dominating the US stock markets. No surprise, they're up 3.2% for the week. The S&P 500 is also up 1.8% for the week. But really it's the Nasdaq that's exchange that's given us the most gains recently. The New York Stock Exchange and the Amex Exchange are far more sedate really. It's all dominated by tech right now. Same story for the year the last 52 weeks. If you look at the sectors again, same sort of story really. Technology is driving the bulk of the gains here is a bit of a mixed bag elsewhere. Comms are also up, energy is down and utilities are down. I don't know if there's anything too exciting for me in there. I don't tend to trade sector by sector. Most of my systems are broad market so they trade a broad cross section of stocks from any sector. I don't particularly choose what sector I want to trade. Looking at the 52 week change, this is interesting. Driven by communications, tech and also consumer discretionary really does show that you need some broad diversification across the sectors. It's no good to hold just one sector because if you pick the wrong sector then that's. That's really going to be a problem for your account. Scroll down here a little bit more. Let's look at Australia. The all ordinaries has been very pretty flat this last week. Same with the ASX 50 small caps finally starting to show a little bit more life. Up 2.5% for the week which is nice. It's been good for my trend following system which trades a lot of small caps and over the last 52 weeks though it's still the large stocks that have made the most gains. Small caps have done pretty poorly this year. I'll show you a chart shortly with with all the details of that. Looking at the ASX sectors again just like the US bit of a Mixed bag here. Nothing really stands out. To me that's as being particularly exciting if we look at the global markets, North America we've covered in Europe, Russia interestingly is pushed ahead, seems to be recovering a little bit. But what's really interesting going on right now is, is the Japanese market is just hammering. Japanese market for a long time has been not particularly exciting, but the last 12 months has been really, really strong. Unfortunately I don't have any great trading strategies for the Japanese market, but maybe it's time to, to really devote some energy to that. What else is interesting in crypto? Bitcoin has been flat this week. Obviously there was the announcement or a bunch of announcements about Bitcoin ETFs. I think the market pretty much anticipated those. And so as soon as they came through there's a little bit of, a little bit of a correction. So bitcoin's been a little bit lackluster but some of the other tokens are still strong. And if you look year to date, not year to date, sorry, rather the last 52 weeks the whole crypto market has been really strong. But we don't want to cover any of the rest of this. Have a look at some charts. This is the markets that I trade and I follow. So we've got the S and P here trending nice and strong and smoothly. The all ordinaries has been far less compelling over the last year or so, but just recently performance has been pretty strong. But we've had a bit of, a bit of a strong correction there. Some of your trend following systems may have had a bit of a dip or a bit of a drawdown recently. The Canadian market hasn't been as strong as the Australian market, but is holding up better. There hasn't been that pullback in the Canadian market that we saw in the Aussie. And my favorite market right now is the Hong Kong market. It's still getting smashed, trending down. We've loaded up or I've loaded up on the short side in Hong Kong again and all of my positions, bar one, I think are in profit on the short side in Hong Kong. And I get some sort of perverse pleasure from, from making money on the short side. I really like that. Gold has been pretty flat and bitcoin as I said, has been trending strongly except has had a bit of a pullback since the, the Bitcoin ETF was approved. Looking at the U.S. exchanges we've got here, NASDAQ, New York Stock Exchange and Amex. And as you can see, the, the Nasdaq and the New York Stock Exchange are have been the stronger ones. The Amex has been pretty flat. A lot of utilities and stuff in here. So I don't know if there's anything particularly interesting about this right now but the, the pullback in the Nasdaq is probably something to watch. Are we going to make new highs here or is this going to be some resistance? We'll wait and see over the next week. But again tech is still the place to be in the US as far as all of the charts are looking. Okay, let's have a look at the US large versus small stocks now. So on the top you can see the S&P 500 index and on the bottom we've got the Russell 2000 equally weighted index. So this is much more heavily skewed towards the small end of town. As you can see since October 2022 the S& P has just been been quite strong. Few big pullbacks but overall I'd say very strong moves. But in the same period the small caps have been pretty much smashed. They're in a downtrend. A few really big rallies here which, which have been profitable for some of the trend trading systems but really no compelling long term moves for the small end of town. Right now the US market very much dominated by large stocks. Let's have a look at the ASX market by size as well here. What we've got is the ASX 50 50, ASX 100, the All Ordinaries and the small ordinaries and the trend is still to favor the large stocks here. So you can see the ASX top 50 has moved far more in the last few months than the ASX small ordinaries. Not nearly as pronounced as the US market though. And Australian trend following is doing okay but still not particularly exciting because if you look at the small caps here, there's small ordinaries over the last, what's this, two one and a half years really basically just going sideways. So there's been a few good gains here and there but as a whole broad based trend following on the Australian market has been pretty weak recently. Let's look at crypto on the top here we've got the, the mega caps the largest tokens. On the bottom here we've got the, the crypto market excluding the mega caps. So you can see the trend has been up for far longer in the mega caps. The large coins basically bitcoin, the small caps coins went sideways and down for quite a lot longer but come around October they bottomed out. And started rallying hard. And there's been some really good gains in here in many of our systems in the last couple of months. And over the last 12 months or so we've done fairly well with the positions in bitcoin. That's the, that's the crypto market just now. Okay, what does this all mean? If you're an Australian trader and you're long only, you're probably still feeling a little bit frustrated with the markets, particularly if you trade small caps and trend following. For me, the message really is as always, yes, I'm 100% systematic. So I don't try and judge or forecast or guess what's going to happen. But what it always shows is you need systems in a wide range of markets. If you're not trading US, Australia, Australia, Canada, Hong Kong, and you've got the capital to diversify, then diversifying into those markets gives you access to some quite different moves. You saw the Hong Kong market is hammering down really strongly. The large caps in the US are going up strongly. The Canadian market is moving up fairly smoothly. So it's a little bit different. You get different behavior from each of those different markets. And if you're not in crypto right now, crypto is really a great place to be because the market is trying to trending pretty strongly. Of course, it's much more volatile. I have a much smaller capital allocation to crypto than I do for stocks. But diversification across stocks and crypto has really been helping my portfolio overall. So if you're stuck with one system or if you don't even have a system yet, I would say now is the time to really think hard about that. It's the beginning of the year. Set a goal for the year to get systematic to get a portfolio systems in place and make sure that you can trade a wide range of markets and take advantage of that. For me, the big message for my own portfolio is I got to get something working strongly in Japan. I'm still just frustrated by the fact that I haven't devoted the time and developed systems for that. But I'm sure you've got your own areas that you really need to develop develop systems in. So I'd love to hear what they are. Comment below this video, let me know. Maybe I can point you in the right direction, help you out. What it is do you want, what do you want to achieve for your trading this year? That's the weekly update for 15th of January. See you in the next video. Bye for now.