No graphs today, my patience has gone away...

Fraud of the week: Well, given the day, you would think that Mr. Raju, Chairman of Satyam Computer Services, would be a shoe-in. After-all, he did claim his company's cash balance was 53.6 bio Rupees but failed to confess that 50.4 bio of those Rupees were more imaginary than my boat in the Med - a trifling 1575% exxageration!
However, I have to give the award to the Marbella property scam. After arresting an official who earns €150,000 a year, they then managed to find €2.4 bio in assets to confiscate. Impressive. And astonishing.

And yes I am cynical enough to believe we'll have a worthy challenger nearly every week going forward for quite a while - sorry. I believe it was Warren Buffet who said something along the lines of "when the tide goes out, you see who is swimming naked".

I should point out that I have not gone with the emotional blow here - some of my own money is "invested" in an Indian Tech Fund - I don't dare check what percentage was in Satyam but I suspect quite a decent chunk unfortunately.

So today I still have no "active" trades though we are edging ever closer to my equity bids across the board. Today's blog will be mainly used to give more detail behind yesterday's thinking. And a picture is worth a thousand words so it will be largely graphs.

First, my GBP-bullishness; walking home this evening, I noticed the emptiness of McDonald's at 6pm and then read the evening headlines about our crummy rail system messing around thousands of would-be passengers. And I shook my head and muttered "this country really is screwed". So why the GBP bullishness? Well, we know we are screwed. We practically have been celebrating the fact for months now. But as a result, not only are we being one of the most proactive in fighting the problems, it is also all priced in! The rest of the world (as the above frauds testify to) is just as screwed but the UK and the US lead the world in a free press and capitalist markets - both which hasten but shorten the painful cleansing process.
So I remain bullish GBP and in fact tighten up all my entry levels on my GBP trades while keeping the same stops - so size has been reduced. I'm now offering EURGBP around 0.9350 while bidding for GBPJPY and GBPCHF around 136.00 and 1.6025 respectively. Price action is confirming a GBP bottom unless there is a serious run on the currency - something I don't believe in yet. Should I chase it? Or have people just bought GBP after the shadow MPC voted for no rate change tomorrow? I think they cut...probably 50 bps...sterling sells off, we get filled on our bids and then sterling roars for ever after and in one year's time, we are swimming off a beach on the Costa Del Sol? Or have I missed the boat, both literally and figuratively...

Well I had 5 graphs for you under the headings below but IT problems are driving me insane and preventing me pasting my graphs for today. So hopefully tomorrow.
EURGBP has gone too far:
GBP TWI bottoming:
JPY stupid up here:
All-time low in GBPJPY holds:
GBPCHF at all-time lows:

My GBPCHF target is ultimately above 2.0000 at some point later this year. Targetting a 25% move may seem crazily ambitious but bear in mind we were there in October!

Finally, I am becoming more and more convinced that equities are set for a bear-market roar. Bad data doesn't whack them down any more - everyone is expecting the data to be rubbish first half of this year. What will cause stocks to test the lows again? Either another major wave of deleveraging or the sudden realisation that the we may only be in the early stages of the economic slowdown; not on the way out.
With Obama's inauguration and fiscal stimulus in the weeks ahead, there will be a feel-good vibe. Credit should perform well for another few weeks. The new year's supply will only start hitting next week and the market should be able to soak it up for a week or two. With so many funds overweight cash and with the new year and new money to be allocated, we could easily get another 20% - 25% rally in equities from here.
I'm looking for nervousness ahead of the NFP number on Friday to weigh on the market sufficient for my bids to be filled and I think post the number, equities rally regardless - the whisper number for Friday is already very scary.
I'm looking to add a position in the Kospi (the Korean index) to my portfolio if it dips far enough over next two days; looking to buy the March contract around the 152 level with a stop at 140, targetting a move towards 190.

In summary, I'm looking to enter 10 different trades at the moment (3 GBP, 2 USD and 5 equity trades). Maximum amount risked on any trade is 2% of total capital allowing for slippage - i've actually reduced to around 1.5% for some of them. If all trades get entered and fail, total portfolio loss will be around 17.5%.

Good luck! And this stupid blog is confirming my incredible ignorance when it comes to bloody computers - endless problems for half an hour of writing...