Tuesday, 10 February 2009

What happened to MCFX?

This is the frequent question I've been hearing recently...from the multitudes (5 people) who follow this blog.

MCFX has no real excuse. Though since I live in London, I feel I can unashamedly blame the weather and once in a millenium (something like that) snowstorms. Everything else seems to have died in this country once the snow hit the 2cm mark. It's quite worrying how the whole country came to a halt for weather that is relatively common place throughout much of Europe.

On top of that, MCFX has been distracted by the enjoyments of unemployment. Bloomberg connection has been cancelled and we have largely tuned out from the markets. This tuning out was aided by the fact that we got cleaned out on the equity dip at the start of the month. We bought in too aggressively and got punished. We followed up that idiocy by not cancelling our stop-entries on the topside and then getting hurt on some of those as well as the bounce was volatile. Frustration abounded.

Overall we lost over 8% through equity idiocy since our last post - a tremendous chunk of our capital. Fortunately we made good money on our currency positions (apart from AUDJPY which we got stopped out with at the start of last week) - in the last 24 hours, we have stopped out of the rest of our positions with decent profit. EURGBP around 0.8800, GBPCHF around 1.7000 and EURAUD around 1.9500 for our respective dates. We have orders to re-enter these positions for the same dates around 0.9120, 1.6650 and 1.9850 respectively.

We have also charged back into equities today on this afternoon's dip. Way too enthusiastically again. We are chasing it seems. We are risking about 5% of our portolio having entered around 838 level for the March SPX future. Stops vary from 815ish level down to 805ish level.

Will try to get back into the swing of things soon. And update on some developments. And our different perspective on the markets now that we have taken a step back and do not have the daily swathe of bad data.

Good luck!

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