Fund performance: -1.58%
Closed trades: Sold Dow March future at 8502 (entered at 8652).
Active trades: Long GBPJPY at 135.68 for val June IMM. Stop around 129.00. MtM: -0.8%
Also long Kospi March future at 152.00 with stop tightened up to 146.00. MtM: -0.12%
And long AUDJPY at 60.86 for val March IMM with stop 2 big figs below (see following post).

Happy Monday!
It has not been so happy a Monday for MCFX. As expected, our Dow position did not survive the open and we note that stocks continue to look soggy. MCFX has low conviction on the market at moment, still believing that most of the short-term bad news has been priced in and also that with liquidity returning to the market, we should soon see the re-emergence of some real money into risky assets. Maybe very slowly and over time, but it will still be a positive force. On the other hand, risk continues to look very soggy. Equities remain offered, emerging markets took a whack today, and the JPY crosses steadily sold off. On the latter, there is apparently 34 bio Euros of bond redemptions and coupon payments due between the 12th and 15th of Jan. Normally, this would not be an issue as most of it just gets rolled down the curve. However, in this environment, investors want their cash back, and since much of that cash comes from Japan, there will continue to be EURJPY offering interest for the rest of this week.

Despite that, MCFX is determined to remain positive and is looking to buy into this risk-dip. I am aware of the potential folly of such a plan but this is a leveraged project targetting incredible returns - not my long-term investment portfolio.

We managed to buy the Kospi March future near the lows last night and tighten up our stop based on the trendline shown below to around 146.00 level - so we are now risking less than 1% on this trade.

So, on the note of optimism, we are going to fight this JPY flow and buy some AUDJPY here at market. Rolling forward to the March IMM date we buy at 60.86 with a stop around 2 big figures lower - risking around 2% of our portfolio on this trade. We would consider going the whole hog and selling some USDZAR here at 10.1100 with stop far away looking for one of those ridiculous ZAR moves that happen more often than they should - but our provider is not providing the liquidity so we move on.
I'd be keen to buy equities in the US and UK again if they fall another 4% - 8% from here but we will reassess the price action as we get closer. At the moment, this period of risk-aversion is very orderly which we like but we will run to the sidelines if that changes.
On our EUR bearishness, and AUD (risk) bullishness, we will look to sell some EURAUD around the 1.9950ish level with a stop around 2.0750.
But we need something on the other side, and NOK seems to be the only thing still appreciating in this world. I agree fundamentals are great in Norway on a longer-term basis but with oil prices heavy, the government selling NOK and association with other scandi lightweights, it might be one to sell against are other risk-positive positions if it continues to stay ahead of the game. On that note, we look to buy EURNOK around 9.2100 level with a stop around 9.0800.

We highlight our low conviction in any trade at this point with fundamentals and technicals often contradicting each other.

Good luck!