This article aims to give a general view of the stock market cycle and its sector strength based on the general economic outlook of the business cycle. It is based off the top- most chart in http://www.marketoracle.co.uk/Article3526.html. I summarised a reading from the book “If it’s raining in Brazil, buy starbucks”. It is a great book on fundamental analysis of the stock market. A lengthy description of the stock market sector rotation can be found between pages 174-177.

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I spoke about technical analysis in many of my articles so now I shall focus on its dangers. Proponents of technical analysis will tell you that price is all you need to trade so long as the market is liquid. Indeed, this is true. But the wannabe trader will be left clueless as to how to “begin” in technical analysis. My word of advice here is this: Technical analysis should be used as a tool, not a reason to trade.

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As the study year 2011/2012 is leaning towards the end, current committee are looking for enthusiastic individuals to become MUTIS Committee 2012/2013. The details about available positions and ways to apply can be found in the attached document.

MUTIS Committee Positions 2012/2013

Dear MUTIS members, as many of you may be aware, BarCap Investment Funds 2012 competition is currently taking place. As previously discussed, team prospectuses  have been published and are currently available under Investment Funds section of our website.

The currency markets runs 24 hours a day for 5 days a week. It has high liquidity, a very important factor when applying technical analysis to charts. Since technical analysis could be interpreted as a study of mass psychology, it is imperative to have significant volume for any reliable technical studies to work in your favour. For this reason, many trade the currency markets as currencies tend to trend over long periods of time and produce highly probably trading signals during a trending phase. While experimenting with a brokerage account, I pulled up a chart of Goldman Sachs on the daily time frame and observed what has happened in the past few weeks.

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The goal of the investment funds competition is to provide an opportunity for participating teams to develop and apply the full range of their technical, fundamental and risk management skills in a more realistic setting.

The winning fund will be assessed on its performance, the timely submission of documentation and the adherence to the fund’s policy and strategies. The reward for the commitment and effort of the participating funds will be a £500 first prize, £200 second prize and a couple of small prizes for weekly performance (i.e. investment of the week, etc.).

The funds will be able to invest $1m of starting capital in companies listed on the main American stock exchanges (NYSE, NASDAQ and AMEX), as well as in options and ETFs. Teams need to register on the Investopedia Trading Simulator (a link is provided below) and join the MUTIS game called MUTIS Spring 2012. In order to do that you need to provide us with the email under which your team is registered when you submit the Prospectus and you will receive an invitation from us shortly after.  The game will go live this Monday 20/02 and you can start investing as soon as you submit your prospectus. The game will end on Friday 13/04 11:59pm and winners will be announced during the final meeting.
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Thank you for reading my first post “How I started my initial trading strategy” where I highlighted how I interpret price movements based on charts alone. That provides the building block of my trading strategy. Accepting the fact that price can be interpreted in a repetitive manner with respect to the mean is crucial to proceed with the trading strategy. Do read my first post again to gain clarity of what I mean. This is very important: http://mutis.co.uk/2011/11/10/the-way-i-started-and-my-initial-trading-strategy/. In this post I will illustrate the ‘mean reversion’ from my perspective in a short trade I recently placed.

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When I started trying to tackle the markets 2 years ago, I found myself bewildered by the vast amounts of information. I dwelled into technical analysis and devoured all the information I can. Within 6 months, like many wannabe traders who read up on technical analysis, I knew all sorts of chart patterns on the back of my hand. These patterns, though good to know, did not bring stability. My frustration grew worse, and I became desperate realising that my time spent on education was not paying off despite Google’s AdSense flooding me with loads of Forex advertisements such as ‘Make 1000 pips in 2 hours with this one weird tip!’.

Later, I moved onto webinars, seminars and courses. I attended webinars by many traders but to no avail. I bought a course and went for a weekend class which fooled me into thinking that the systems sold would actually work! They did not work, and it was miserable for another few months. I continued to lose virtual money, and later, real money. After a while, I began to ask myself what I was really missing and my entire perspective of trading changed with this one (weird) tip!
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It came to our attention that people find it difficult to find the precise list of investment banks and financial services firms that offer career related opportunities at various undergraduate levels. MUTIS therefore decided to publish a list of investment banks and trading firms that summarises opportunities (Spring Weeks, Summer Internships and Graduate Opportunities) offered by each company and provides a convenient way get your applications started. If there are any companies that you think are missing, feel free to comment underneath and we will be more than happy to add them to the list.

Dear Members

From its relatively recent inception, MUTIS has quickly established itself as one of the largest and most prestigious societies at the University of Manchester. We are proud to provide our members a hands-on experience to investing by organizing a wide variety of events, ranging from trading competitions, high-profile speaker events, educational seminars and CV workshops, all through the society’s extensive alumni network and our expanding corporate relations. It goes without saying that the support from our sponsors has been integral in this development and I would like to take this opportunity to sincerely thank all of them.

We would also like to thank the previous committees for their tireless and committed work in setting up valuable links and affiliations with the Manchester Business School and the University Careers’ Service. To acknowledge these efforts, MUTIS has been awarded the “UMSU Gold Award 2011”, the most respectable society award on campus.

At MUTIS, our goal is to bring together students with a common interest in and enthusiasm for the financial markets. We provide a platform for the sharing, discussion and analysis of thoughts and ideas relating to the financial markets.  As the global economy is recovering from what has been one of the most severe economic impasses, the current MUTIS committee is determined to seize this opportunity to further invest into the most valuable asset – our members.

From the committee as a whole, we look forward to meeting you during one of our weekly meetings.

Emily Bunting                                                                                     Jan Klincker

President                                                                                           Chairman

To learn more about our sponsors, please click here.