You may have noticed how we have a tendency to talk up our positions so much that we start believing in them even more.
Tonight, we have done the opposite. That GBPJPY chart worried us. And we were looking at what levels we would look to get back in. And then we were thinking that EURGBP still looked heavy so maybe EURJPY is going to pullback. But that's not good for equities. We had a look at EURJPY chart and there was nothing too interesting right at these levels. So then we had another look at our SPX chart. And then we noticed it.
We originally had vague thoughts of pencilling in 875 as our initial target when we put the trade on. But then we were feeling good with our position and the sentiment in the market. So we thought we would leave it run. But then we noticed it.
What we noticed when we looked at that chart is that we are right at the long-term downtrendline from the post-Lehman highs at 1281 (!! - seems so far away now!). As long as we don't drift too much higher tonight, we are making a perfect touch on that trendline. Lets not be greedy - we don't have the ammo overall to risk ruining what's been a good trade unless we have much higher conviction.
We've had a good run over the last few days, and given the technicals, we have taken off our position in equities in entirety. And removed our bid below.
We will reassess tomorrow and hope that we get a chance to rebuy lower down, but if we break cleanly through that trendline in the days ahead, we will feel happy reinstating higher up as well.
So we have closed out our March future position just above 870 locking in a decent profit on the trade; 6.49% since Monday to be precise! So up-to-date fund performance is -5.146%. With our MtM about +1% now.
Good luck!
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