Equity madness

Ok MCFX is getting carried away again. I am buying equities like there is no tomorrow. SPX March future to be precise. Since last night, I've been adding little chips to the core position mentioned yesterday. We are very leveraged... but stops are staggered and some very close. A 1% move in stocks causes a move in excess of 4% in our fund. Madness.

But we plan to keep on adding if it rallies from here. Against that, we'll keep on tightening up our stops. Between all our current positions, including our initial entry at 843.5, we've entered at an average of around 832 in the March future. And we're risking a total of about 7% of our fund at the moment.

We also now have short EURAUD again having sold at 1.9838 for the March IMM date. We picked our entry level nicely on this one with the rally overnight not going much higher.

And finally we have long GBPCHF on again entering at 1.6658 for the June IMM date.

MCFX is using some of his spare time to research more and more the press around previous bubbles / crashes. It's easiest to find articles on the Asia crisis, Russian crisis, LTCM, and the Internet boom so this is where I am focussing. I'm hoping it will give me a greater insight to market psychology around bear-markets - but bizarrely all this doom-and-gloom reading is only making me more bullish. I have become entrenched in my view that a decent rally is on the horizon; whether bear-market rally or genuine start to the new bull-market I am less convinced, though still definitely err towards the former option. Having already expended so much capital on all the previous false dawns, I'm keen to catch it when it happens. This kind of attitude is what kills traders / funds. Being too aggressive too early. Though I do the current market sentiment is ripe for the move. And I will tighten up my stops aggressively as, and if, the market runs.

The fund is currently down 13.7508% ytd. Upsetting. Though given current position size in equities, this will probably change significantly in one direction very soon. We must remember that this fund is targetting 100% returns on the year. Which means that we are looking to make nearly 9% average per month. Average. Including down months. So -13.7508% is in no way denting our plans - only our ego.

Good luck!