Posts
Fund performance: +0.052%
Closed trades: Ftse March contract at 4390 - opened at 4388 - those two Ftse points make up the entire contribution to our P/L so far.
Active trades: Just the Dow March contract opened at 8652. Now at 8531 with stop around 8500. MtM, we're down about 1.5% on this trade.
Happy weekend all! So NFP has come and gone. Headline not half as bad as the whisper number which caused risk to rally initially. But as focus narrowed down to the details, the number really wasn't good. More jobs have been lost in the US in the last two months than any other period since September 1945 when the army was largely disbanded after WWII. Unemployment at 7.2% is high, but even higher when you notice the numbers leaving the labour force entirely.
Also hitting stocks was the fact that the home builder Lennar was being accused of off-balance sheet debt and whispers of yet another Ponzi scheme.
Either way, we got stopped out of our Ftse position near the lows - but at least we had no loss on the trade with our stop around our entry level. Not so good is our position in the Dow Jones Index. I'm still optimistic on the arguments to have a major bear-market rally over the next few weeks but the close on Friday is ominous. Technically, we need a good open after the weekend for me to regain any conviction and we do envision our Dow position being stopped out with a loss on Monday.
We have been correct on direction on both the USD and especially the GBP - however still have not got the trade on. We raise up our GBPCHF bid yet again to around the 1.6050 are. We are becoming even more bearish on the EUR than previously as well and are reasonably determined to get some short exposure to it before the ECB meets this week.
Something else on the rader is DKK - Denmark is still ridiculously expensive and uncompetitive while the economy is crashing after having one of the worst housing bubbles in the world. Sounds like Ireland I know, but there is a fundamental difference; Denmark officially has its own currency and control over its own monetary policy - even if both our tied to the Euro. I really think the pressure to de-peg from the Euro will become too much at some point and look for the DKK to devalue by at least 10%, and probably much more. I'm looking to buy some long-dated forward exposure to EURDKK. You also win on this trade if DKK hikes rates aggressively to defend its currency. While I think this is likely to happen at some point, timing is very hard; when its obvious something will happen soon, it will be too expensive to enter the trade. I will wait for a lull and some complacency to get cheaper rates to put this trade on - probably risking a 1% move, looking for a minimum 10% deval.
The long-awaited (and hence very disappointing graphs):
EURGBP has gone too far:
GBP TWI bottoming:
JPY stupid up here:
All-time low in GBPJPY holds:
GBPCHF at all-time lows:
Finally, a legend quote from a great lad:
"Owners of capital will stimulate working class to buy more and
more of expensive goods, houses and technology, pushing them to
take more and more expensive credits, until their debt becomes
unbearable. The unpaid debt will lead to bankruptcy of banks,
which will have to be nationalized, and State will have to take
the road which will eventually lead to communism."
Good luck!
Closed trades: Ftse March contract at 4390 - opened at 4388 - those two Ftse points make up the entire contribution to our P/L so far.
Active trades: Just the Dow March contract opened at 8652. Now at 8531 with stop around 8500. MtM, we're down about 1.5% on this trade.
Happy weekend all! So NFP has come and gone. Headline not half as bad as the whisper number which caused risk to rally initially. But as focus narrowed down to the details, the number really wasn't good. More jobs have been lost in the US in the last two months than any other period since September 1945 when the army was largely disbanded after WWII. Unemployment at 7.2% is high, but even higher when you notice the numbers leaving the labour force entirely.
Also hitting stocks was the fact that the home builder Lennar was being accused of off-balance sheet debt and whispers of yet another Ponzi scheme.
Either way, we got stopped out of our Ftse position near the lows - but at least we had no loss on the trade with our stop around our entry level. Not so good is our position in the Dow Jones Index. I'm still optimistic on the arguments to have a major bear-market rally over the next few weeks but the close on Friday is ominous. Technically, we need a good open after the weekend for me to regain any conviction and we do envision our Dow position being stopped out with a loss on Monday.
We have been correct on direction on both the USD and especially the GBP - however still have not got the trade on. We raise up our GBPCHF bid yet again to around the 1.6050 are. We are becoming even more bearish on the EUR than previously as well and are reasonably determined to get some short exposure to it before the ECB meets this week.
Something else on the rader is DKK - Denmark is still ridiculously expensive and uncompetitive while the economy is crashing after having one of the worst housing bubbles in the world. Sounds like Ireland I know, but there is a fundamental difference; Denmark officially has its own currency and control over its own monetary policy - even if both our tied to the Euro. I really think the pressure to de-peg from the Euro will become too much at some point and look for the DKK to devalue by at least 10%, and probably much more. I'm looking to buy some long-dated forward exposure to EURDKK. You also win on this trade if DKK hikes rates aggressively to defend its currency. While I think this is likely to happen at some point, timing is very hard; when its obvious something will happen soon, it will be too expensive to enter the trade. I will wait for a lull and some complacency to get cheaper rates to put this trade on - probably risking a 1% move, looking for a minimum 10% deval.
The long-awaited (and hence very disappointing graphs):
EURGBP has gone too far:
GBP TWI bottoming:
JPY stupid up here:
All-time low in GBPJPY holds:
GBPCHF at all-time lows:
Finally, a legend quote from a great lad:"Owners of capital will stimulate working class to buy more and
more of expensive goods, houses and technology, pushing them to
take more and more expensive credits, until their debt becomes
unbearable. The unpaid debt will lead to bankruptcy of banks,
which will have to be nationalized, and State will have to take
the road which will eventually lead to communism."
Karl Marx, 1867
Good luck!
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