Thursday, 8 January 2009

Active trades! What a start!

To equities first where the fund is seeing it's first bit of action
Today's price action in the March futures:
SPX500: low was 891.80, my bid was 892, not filled due to bid / offer spread!
Dow Jones: low was 8605, my bid was 8644, active trade!
Nasdaq 100: low was 1222, my bid was 1220, so close!
Ftse: low was 4376.5, my bid was 4388, nice trade!

I am gutted about the SPX and Nasdaq after getting so close and debating whether to chase them. But on the other hand I'm loathe to push too aggressively before NFP's tmrw. Anything could happen and maybe I'm best not to be over-extended in stocks. I have 2 positions; both in the money (one only just and the other one already over 2% in the money). So I have cancelled my bids in the SPX and Nasdaq for now. I'd prefer to have the ammo to add from a position of strength if they continue to go my way tomorrow night.
In fact, I'm so much on side on the FTSE trade already (market trading above 4480 as I write) that I will already tighten my stop to entry level. I like that risk/reward! Slowly, slowly, catchee boatee. And with the fund up just over 2% on mark-to-market, we are exceptionally pleased with ourselves and wish not to go horribly offside on this equity trade. With the Dow future trading around 8660 as I write, we tighten up our stop on this to around 8500 limiting our possible hit to around 0.7%.
The reason I feel comfortable tightening up my stops is that the fact that the lows were so incredibly close to my bid levels in all four cases - this increases my confidence in the technical factors I was relying on. Not only that, but also in all four cases we have now provided the nice confirmatory 3rd touch to uptrendlines from last year's lows. In fact, I'm nearly talking myself into chasing the SPX and Nasdaq. I will see how it trades as I write this post.
For the currencies, the MPC did cut 50bps as expected and sterling ends the day roughly unchanged despite trying much higher. I lower my EURGBP offer again towards the 0.9300 level; keeping my stop constant. I am more certain than ever that GBP has made a low - I must be patient about my entry level though - the time will hopefully come.
We are getting closer to our USD entry levels - perhaps tomorrow's NFP will provide the USD dip.
And between the problems my computer has and the problems I have, I still have not mastered these bloody graphs. So forget them.
I noticed another Ponzi scheme discovered in Ireland today. And another chairman has resigned in India which is a worrying omen. The world is not a happy place at the moment.
Finally, as I was typing this blog, I tried to buy the SPX future at 897 and missed. I will leave the bid there for another hour approx but with stop significantly closer; around 880 - only risking about 1% on this trade. Similiarly on the Nasdaq future, I will leave a bid at 1230 with stop at 1200 risking 1% of my portfolio. Both bids will be reffed around closing time in the US. I don't like chasing a trade but then I do like the argument of buying equities especially now that the technical picture has confirmed my fundamental argument. So much so that I've added to my Dow position at 8659 as well. Again with a stop around 8500.
Maybe I've got carried away with NFP tomorrow. Very leveraged stocks with close stops? Sounds to me like stocks will dip and take me out, and then roar just to teach me a basic trading lesson. Oh well...I must go with what I believe in.

Good luck!

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