Posts
MCFX as a blog is over. This much may have been guessed by the lack of posts. While the experiment was not successful on returns - finishing down around the 20% mark, we are pleased with the experience. Our currency calls have largely been very good - our foolishness has been nearly entirely focussed on equities where we have lost vast sums through mis-sized, mis-timed, and mis-scaled punts. We not only lost money nearly every time we invested in equities (whether long or short) - we lost way too much each time.
Oh well, lesson learned. Our macro views on currencies that we have reiterated throughout remain the same.
However, more important than the losses, MCFX started a new job a few weeks ago and a very exciting one at that. This will unfortunately consume all his time for the foreseeable future and so blogging (that was not happening anyway) must end. Thanks for the support from those few who read and followed the blog.
Good luck and goodbye!
Sunday, 10 May 2009
Friday, 20 March 2009
Very Frustrating Week
MCFX has failed to blog this week. Not due to lack of time; but due to intense frustration. Mainly with his liquidity provider who used the high volatility on Wednesday evening to completely fail in their service provision and hence cost MCFX a lot of money (I won't go into details now as have spent half the week fighting with them). It's not been THE most expensive week - but it's been an expensive one and we are upset to have given back such a large percentage of last week's gains - particularly so when we feel are market calls have been largely correct.
So yet again we finish the week flat risk. Short EURGBP was clearly wrong. But we sold EURAUD at great levels only for our provider to tenuously claim that we should have been stopped out above the highs in the midst of last Wednesday's mentalness - but they only told me an hour after the event when EURAUD was much lower.
We sold EURUSD around 1.3700 which was clearly great. But don't still have the position. Annoying and poor position management.
We got stopped out of GBPCHF right at lows - before it promptly rallied.
And most frustratingly, we got stopped out of our cable long near enough to lows before it promptly went 7 big figures higher! Ouch.
Hmmm....
Obviously the market has yet to make up its mind about what the Fed's plan to buy Treasuries really means. Apart from being inflationary and USD negative. But will stocks continue to rally next week? Today's price action is not very supportive of that idea. We dipped our baby toe into stocks over last 48 hours but are not convinced and so have taken the position off. We'll try to reassess over weekend.
Underlying all our thinking though is that we remain GBP bulls at these levels. And longer-term EUR bears. How best to trade this view is not always clear as EURGBP, while obvious, does not move in an easily trending / tradeable fashion. And overall we like trading from a risk-recovery point of view. Only ever long equities, short CHF, short JPY, long AUD, long CAD.
Good luck!
So yet again we finish the week flat risk. Short EURGBP was clearly wrong. But we sold EURAUD at great levels only for our provider to tenuously claim that we should have been stopped out above the highs in the midst of last Wednesday's mentalness - but they only told me an hour after the event when EURAUD was much lower.
We sold EURUSD around 1.3700 which was clearly great. But don't still have the position. Annoying and poor position management.
We got stopped out of GBPCHF right at lows - before it promptly rallied.
And most frustratingly, we got stopped out of our cable long near enough to lows before it promptly went 7 big figures higher! Ouch.
Hmmm....
Obviously the market has yet to make up its mind about what the Fed's plan to buy Treasuries really means. Apart from being inflationary and USD negative. But will stocks continue to rally next week? Today's price action is not very supportive of that idea. We dipped our baby toe into stocks over last 48 hours but are not convinced and so have taken the position off. We'll try to reassess over weekend.
Underlying all our thinking though is that we remain GBP bulls at these levels. And longer-term EUR bears. How best to trade this view is not always clear as EURGBP, while obvious, does not move in an easily trending / tradeable fashion. And overall we like trading from a risk-recovery point of view. Only ever long equities, short CHF, short JPY, long AUD, long CAD.
Good luck!
Tuesday, 17 March 2009
Sell EURGBP
This is just a quick post to tell you to sell EURGBP while it's still above 0.9265 (it's bouncing around 0.9270 as I write) - these are the highs. We've repeatedly tried dipping our toes into shorting this pair over the last week - not to too much success but overall not too much lost either. But now is the time. We've upped our size and are piling in. Cable won't go much below 1.39 on this run down whereas EURUSD has the guts of 2% to do.
Get involved and good luck!
Get involved and good luck!
Monday, 16 March 2009
It's all about timing
Well we returned with a bang. We said buy GBP and GBP promptly roared. We made 5 big figures on GBPCHF and 3 on GBPJPY within 48 hours. We were tightening our stops aggressively and so were out of everything by Friday afternoon including EURAUD which we made nearly 2 big figs on as well. Cable is obviously 4 big figs higher than where we bought it but we must admit we stopped out at flat Thursday afternoon. And EURGBP was also a flat exercise.
However it was a great 48 hours and we went in to the weekend out of all positions looking for any retracement to get back in. This was not so good timing. GBP has continued to roar today and we've missed out on several big figs more across the board.
Still it was a very hefty profit which went some way towards repairing MCFX's decimated balance sheet. About 10% of profit. Yep. Much needed.
Ideally now we should wait til the next obvious opportunity. But bear in mind that MCFX is now unemployed and so trading (when in London) is practically his full-time occupation. And while patience is a virtue, we feel we should be trying to maximise the time we have while we have it.
So we will continue to push. But today it did not work. We dipped our toe in to short EURGBP and promptly got stopped out near the highs so we stand aside til tomorrow. It was a loss of less than 1% but it hurts.
Good luck!
However it was a great 48 hours and we went in to the weekend out of all positions looking for any retracement to get back in. This was not so good timing. GBP has continued to roar today and we've missed out on several big figs more across the board.
Still it was a very hefty profit which went some way towards repairing MCFX's decimated balance sheet. About 10% of profit. Yep. Much needed.
Ideally now we should wait til the next obvious opportunity. But bear in mind that MCFX is now unemployed and so trading (when in London) is practically his full-time occupation. And while patience is a virtue, we feel we should be trying to maximise the time we have while we have it.
So we will continue to push. But today it did not work. We dipped our toe in to short EURGBP and promptly got stopped out near the highs so we stand aside til tomorrow. It was a loss of less than 1% but it hurts.
Good luck!
Thursday, 12 March 2009
We return
MCFX is back. Back in London and back in business. It's time to start repairing our horrendous balance sheet. And we're starting the recovery by buying GBP. Over the last 24 hours, we've bought a lot of GBP against CHF, JPY, USD and EUR. We actually think that GBP could become a safe-haven currency farther down the line. I know. Bizarre. But GBP is way ahead of the game in taking the pain and definitely in pricing in the pain. It's had an awful smack again this week amidst the backdrop the details of the Lloyds deal and the distressing terrorist killings in Northern Ireland. The latter has depressed us as we see the situation escalating again as recession dampens the economic incentives for peace.
However, in currency terms, GBP has had a healthy cleanout. It cleaned us out of our last remaining chunky position in GBPCHF - we stopped out of the June IMM date at 1.6480 but have recently bought back at a 1.6050 average and are happy that we'll fill that gap soon enough.
We've also sold EURAUD. The world is too bearish EUR and it's probably set for a very decent rally at some point - sure it's already had one over last few days. But that will probably continue. We are part of that bearish EUR brigade but stand aside as positioning dominates. That said, we've dipped our toes into short EURGBP but that's mainly a GBP view. And we've sold EURAUD - this is partly to ensure that we have some short EUR on just in case but also because we believe that the EURUSD bounce will coincide with an equity and risk bounce and so AUD might well outperform. Longer-term we love short EURAUD.
Our mention of equities brings us back to something we mentioned in our last post. We said we think the cult of equities is dead. That may be true. But we went too far - we said we don't believe equities will necessarily be higher in 5 years time in real terms. That was probably a bit crazy. Equities are now looking cheap. We may go a lot lower but over longer-term, there are buying opportunities at these levels.
Something else we mentioned in our last post was an imminent collapse in gold (as prompted by MCFX's brother), which duly happened. It's down a tasty 7% or so since our last post. And may have more to run. But we have not played it due to lack of faith in the timing.
But basically, load up on GBP - we'll probably manage it reasonably actively. As said above, we've bought a lot. 1.3760 (spot) just seemed too tempting a level to buy cable - especially with the expected EURUSD rally. EURGBP we've dipped our toes in a few times over last couple of weeks but most recently around 0.9265 for the June IMM date. GBPJPY after missing buying way lower due to some charting idiocy (was very very very frustrating), we've bought at around 133.50ish levels for the June IMM - that was probably a bit hasty considering how much lower it subsequently went. But we'll hopefully be above 140.00 within a few trading days. And the EURAUD we sold at 1.9920 also for June IMM date. The cable position is the main one we'll be jobbing as we hold that spot.
Good luck!
However, in currency terms, GBP has had a healthy cleanout. It cleaned us out of our last remaining chunky position in GBPCHF - we stopped out of the June IMM date at 1.6480 but have recently bought back at a 1.6050 average and are happy that we'll fill that gap soon enough.
We've also sold EURAUD. The world is too bearish EUR and it's probably set for a very decent rally at some point - sure it's already had one over last few days. But that will probably continue. We are part of that bearish EUR brigade but stand aside as positioning dominates. That said, we've dipped our toes into short EURGBP but that's mainly a GBP view. And we've sold EURAUD - this is partly to ensure that we have some short EUR on just in case but also because we believe that the EURUSD bounce will coincide with an equity and risk bounce and so AUD might well outperform. Longer-term we love short EURAUD.
Our mention of equities brings us back to something we mentioned in our last post. We said we think the cult of equities is dead. That may be true. But we went too far - we said we don't believe equities will necessarily be higher in 5 years time in real terms. That was probably a bit crazy. Equities are now looking cheap. We may go a lot lower but over longer-term, there are buying opportunities at these levels.
Something else we mentioned in our last post was an imminent collapse in gold (as prompted by MCFX's brother), which duly happened. It's down a tasty 7% or so since our last post. And may have more to run. But we have not played it due to lack of faith in the timing.
But basically, load up on GBP - we'll probably manage it reasonably actively. As said above, we've bought a lot. 1.3760 (spot) just seemed too tempting a level to buy cable - especially with the expected EURUSD rally. EURGBP we've dipped our toes in a few times over last couple of weeks but most recently around 0.9265 for the June IMM date. GBPJPY after missing buying way lower due to some charting idiocy (was very very very frustrating), we've bought at around 133.50ish levels for the June IMM - that was probably a bit hasty considering how much lower it subsequently went. But we'll hopefully be above 140.00 within a few trading days. And the EURAUD we sold at 1.9920 also for June IMM date. The cable position is the main one we'll be jobbing as we hold that spot.
Good luck!
Friday, 27 February 2009
Self-imposed exile
Apologies for the long delay from MCFX. We passed our own 20% down take-a-break marker. The catalyst being obvious from the first line of our last post. Long equities. Okay, so the bear-market rally we were harping on about. Yep. That one that didn't happen. Well exactly. Pretty harsh.
We disappeared to France to take some time abroad to ponder things. We came back more bearish EUR longer-term though wary that Ireland may be bailed out by Europe at any moment which may cause some painful volatility.
We've been jobbing bits and pieces in smalls - none of it successfully. Only trade we still believe in is long GBPCHF which we've jobbed quite successfully and still hold.
Other macro thoughts include that we are giving up on equities. We still believe at some point they could have a massive rally but longer-term we are coming around to the theory that the cult of equity is over. I think the pain this time will be too long. There will remain tradeable opportunities over the coming years but I'm no longer convinced that equities will necessarily be higher in 5 years time than they are now. At least not in real terms. In nominal terms they probably will but surely there is a better way of playing that reflationary trade?
However, relative value we can't help but feel that long German equities against short Spanish equities will be a great trade (thank you MPPI for this idea). Amazingly, they've performed roughly similiarly over the last few years. We can't help but feel that Spanish equities are horribly screwed to put it nicely. They are stuck in a deflationary environment with increasing unemployment. I don't like having outright equity exposure so hedging with German equities makes sense. They are quite highly correlated being in the same investment bracket for most funds but the divergence should grow.
Another idea which MCFX's brother has been talking about is long oil vs short gold. I like long oil over a longer-term period. It will rocket again at some point: the thing about oil is the supply side is much stickier than the demand side. Falling demand has been the story of this collapse in oil prices but supply is also falling, albeit slowly, but eventually just as viciously, and when demand starts picking up that supply won't be able to come online again so quickly. It's also a way of playing the reflation trade. So longer-term we really like long oil.
Gold we also think will do well in the impending world inflationary environment. The problem is that anecdotally every Tom, Dick, Harry and Mary are in this trade. There is not enough gold around to make the gold ingots demanded by the private sector. This worries me. I think gold can take a horrendous whack short-term.
So in conclusion, while we like the thinking behind this trade as a relative way to play the commodity reflation story, we just think that the timing of both parts of the trade is very very difficult.
That's all for now. MCFX is returning to France next week - this time to formally improve his French. I may update from abroad but only if I'm inspired - and these markets are seldomly inspiring me nowadays!
Good luck!
We disappeared to France to take some time abroad to ponder things. We came back more bearish EUR longer-term though wary that Ireland may be bailed out by Europe at any moment which may cause some painful volatility.
We've been jobbing bits and pieces in smalls - none of it successfully. Only trade we still believe in is long GBPCHF which we've jobbed quite successfully and still hold.
Other macro thoughts include that we are giving up on equities. We still believe at some point they could have a massive rally but longer-term we are coming around to the theory that the cult of equity is over. I think the pain this time will be too long. There will remain tradeable opportunities over the coming years but I'm no longer convinced that equities will necessarily be higher in 5 years time than they are now. At least not in real terms. In nominal terms they probably will but surely there is a better way of playing that reflationary trade?
However, relative value we can't help but feel that long German equities against short Spanish equities will be a great trade (thank you MPPI for this idea). Amazingly, they've performed roughly similiarly over the last few years. We can't help but feel that Spanish equities are horribly screwed to put it nicely. They are stuck in a deflationary environment with increasing unemployment. I don't like having outright equity exposure so hedging with German equities makes sense. They are quite highly correlated being in the same investment bracket for most funds but the divergence should grow.
Another idea which MCFX's brother has been talking about is long oil vs short gold. I like long oil over a longer-term period. It will rocket again at some point: the thing about oil is the supply side is much stickier than the demand side. Falling demand has been the story of this collapse in oil prices but supply is also falling, albeit slowly, but eventually just as viciously, and when demand starts picking up that supply won't be able to come online again so quickly. It's also a way of playing the reflation trade. So longer-term we really like long oil.
Gold we also think will do well in the impending world inflationary environment. The problem is that anecdotally every Tom, Dick, Harry and Mary are in this trade. There is not enough gold around to make the gold ingots demanded by the private sector. This worries me. I think gold can take a horrendous whack short-term.
So in conclusion, while we like the thinking behind this trade as a relative way to play the commodity reflation story, we just think that the timing of both parts of the trade is very very difficult.
That's all for now. MCFX is returning to France next week - this time to formally improve his French. I may update from abroad but only if I'm inspired - and these markets are seldomly inspiring me nowadays!
Good luck!
Wednesday, 11 February 2009
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!
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!
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!
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!
Friday, 30 January 2009
Okay - we're boring ourselves here
But in the spirit of keeping this blog constantly updated, we have just put in an order to buy some AUDJPY for the March IMM date at 0.5720 with a stop around 0.5600 area (risking 2% of our portfolio) - we actually went to buy it at 0.5710 but it kept running away from us. Now at 0.5740 so we won't chase. Another risk-postive play for a very bullish MCFX - losing your job must give you this confidence! If it runs away from us, we'll be very happy due to our long equity position.
MCFX is going out to be cultural and watch a string quartet.
Good luck!
MCFX is going out to be cultural and watch a string quartet.
Good luck!
End of jan summary...
...will come on the weekend.
Last update for this Friday. We've got stopped out of part of our SPX long - locking in just under 1% loss on our portfolio. The rest of our stops now are down towards 810 level. We have stop-entries on the topside every 5 points to keep adding to our current longs with stops at various trailing levels. A bit bullish we know...
On the other hand, we have significantly tightened up our stops in GBP - only because they are enough onside that we would be gutted to lose money on them now. For the June IMM date, our stops are now around 0.9100 in EURGBP and 1.6170 in GBPCHF.
Good luck!
Last update for this Friday. We've got stopped out of part of our SPX long - locking in just under 1% loss on our portfolio. The rest of our stops now are down towards 810 level. We have stop-entries on the topside every 5 points to keep adding to our current longs with stops at various trailing levels. A bit bullish we know...
On the other hand, we have significantly tightened up our stops in GBP - only because they are enough onside that we would be gutted to lose money on them now. For the June IMM date, our stops are now around 0.9100 in EURGBP and 1.6170 in GBPCHF.
Good luck!
Risking 7% total on equities...not 8% as said in last post
Luckily our GBP positions are doing very well today which give us more confidence. Equities admittedly now looking very heavy. Hmmm...
If they stabilise and bounce without making new lows for the day, then we will add on the way back up.
Good luck!
If they stabilise and bounce without making new lows for the day, then we will add on the way back up.
Good luck!
Strap it on and strap in
We have just gone very long SPX March futures. We had computer problems earlier and were cursing the world as we failed to get our position on before the GDP numbers. But we raised our bid and have now gone very very long SPX with average around 838 level. Stops at varied levels. Some around 830ish. Others at 810ish. We're risking a total of 8% of our portfolio! Could be madness I know.
But this is a leveraged fund looking for massive outsized returns. Not a pansy long-term investment vehicle. When you believe in something, you need to put it on.
Good luck!
But this is a leveraged fund looking for massive outsized returns. Not a pansy long-term investment vehicle. When you believe in something, you need to put it on.
Good luck!
Quick post
Only a few minutes hear as MCFX is out to be savaged by a dentist very soon.
This is the level to get back into equities. Yep, we're catching a falling knife. We had picked out 835 as our rough rebuy level and it's got all the way back there very quickly. Our only concern is where to put our stop - we've gone for roughly the 810 level though are worried this is not the correct level. If we stabilise around this 835ish level and bounce we will add on the way back up. We're risking 3% this time as we have increasing confidence since market has played out exactly as expected over last 5 days.
And we're still bitter about not getting into GBPNZD when we planned earlier this week. This bitterness is a poor trait. Move on from the past - always must have a clean slate each day otherwise you chase trades.
Good luck!
This is the level to get back into equities. Yep, we're catching a falling knife. We had picked out 835 as our rough rebuy level and it's got all the way back there very quickly. Our only concern is where to put our stop - we've gone for roughly the 810 level though are worried this is not the correct level. If we stabilise around this 835ish level and bounce we will add on the way back up. We're risking 3% this time as we have increasing confidence since market has played out exactly as expected over last 5 days.
And we're still bitter about not getting into GBPNZD when we planned earlier this week. This bitterness is a poor trait. Move on from the past - always must have a clean slate each day otherwise you chase trades.
Good luck!
Thursday, 29 January 2009
Thank god for flexibility
Fund performance: -5.146%
Open positions still the same: Short EURAUD, short EURGBP and long GBPCHF. MtM +1.5%
They say flexibility in your opinion is important in a trader. Well this time it certainly served us well. With SPX 2.5% lower than where we cut out last night (and still looking heavy), we saved ourselves over 3% by quickly changing our mind.
We will look to re-instate longs in the equity market in the near future but there is no rush. We are out tonight and will reassess in the morning. All our currency positions still working and it will soon be time to both add to our GBP positions while tightening up the original stops.
Good luck!
Open positions still the same: Short EURAUD, short EURGBP and long GBPCHF. MtM +1.5%
They say flexibility in your opinion is important in a trader. Well this time it certainly served us well. With SPX 2.5% lower than where we cut out last night (and still looking heavy), we saved ourselves over 3% by quickly changing our mind.
We will look to re-instate longs in the equity market in the near future but there is no rush. We are out tonight and will reassess in the morning. All our currency positions still working and it will soon be time to both add to our GBP positions while tightening up the original stops.
Good luck!
Wednesday, 28 January 2009
Quick about turn
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!
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!
Gut feel worked...
Fund performance: -11.636% (still).
Open positions are still short EURAUD, short EURGBP, long GBPCHF and long SPX March futures. MtM of these positions is about +7.5%.
We are happy but gutted. Happy that gut feel led us to increase our SPX long on Monday night. Gutted that we missed out adding again last night by 0.5 of an SPX point! If we'd been filled, our MtM would be up a further 2%+! D'oh. Oh well. We are in a position of strength and the markets have treated MCFX kindly this week (even if our late-employer did not). Our GBP trades are also gaining strength and we are in fact on side on every single one of our open positions.
We are looking to push these trends. We like adding from a position of strength. And the general suspicion towards this equity rally encourages us. We will look to add to our SPX position on a pullback to around the 865 level with stop around 850ish. We increase our stops on our present positions to around a similiar level to ensure we lock in a profit overall.
We are also looking to add to our long GBP positions at some point in the future. Looking at a GBPJPY chart we notice a very nice uptrendline from the recent lows - something that we would trade if we were a day trader. However being that close to that good a short-term trendline scares us - we would prefer to wait til it breaks and buy on the ensuing dip. Either that or until we move cleanly away from the trendline. Either way, we've been made wary of tightening up the stops on our GBP positions or adding to them... at least for the moment.
But we are frustrated that our recent job distractions meant we missed instigating a long GBPNZD position on the dip on Monday as we had said we would.
We have temporarily removed our USD bids, against both CHF and EUR but think the next few days will provide a good opportunity to institute both these positions.
Open positions are still short EURAUD, short EURGBP, long GBPCHF and long SPX March futures. MtM of these positions is about +7.5%.
We are happy but gutted. Happy that gut feel led us to increase our SPX long on Monday night. Gutted that we missed out adding again last night by 0.5 of an SPX point! If we'd been filled, our MtM would be up a further 2%+! D'oh. Oh well. We are in a position of strength and the markets have treated MCFX kindly this week (even if our late-employer did not). Our GBP trades are also gaining strength and we are in fact on side on every single one of our open positions.
We are looking to push these trends. We like adding from a position of strength. And the general suspicion towards this equity rally encourages us. We will look to add to our SPX position on a pullback to around the 865 level with stop around 850ish. We increase our stops on our present positions to around a similiar level to ensure we lock in a profit overall.
We are also looking to add to our long GBP positions at some point in the future. Looking at a GBPJPY chart we notice a very nice uptrendline from the recent lows - something that we would trade if we were a day trader. However being that close to that good a short-term trendline scares us - we would prefer to wait til it breaks and buy on the ensuing dip. Either that or until we move cleanly away from the trendline. Either way, we've been made wary of tightening up the stops on our GBP positions or adding to them... at least for the moment.
But we are frustrated that our recent job distractions meant we missed instigating a long GBPNZD position on the dip on Monday as we had said we would.
We have temporarily removed our USD bids, against both CHF and EUR but think the next few days will provide a good opportunity to institute both these positions.
Tuesday, 27 January 2009
MCFX
It's late, and I'm tired. I had no real excuse for not blogging properly today. Except...
You see...MCFX lost his job today. It was coming. It was the "personal issues" we referred to on the weekend - nothing more traumatic than that. We'll move on - something to possibly delve into in a future blog.
Anyways, we'll get back into our discipline tomorrow. We've no closed trades since our last proper update so the fund is still down 11.636%. But at least our open positions are all looking okay and MtM we're up about 3% from them.
The big one is the SPX futures we piled into yesterday evening. We're going to ride this trend (if it comes - now that we've bagged a winner, lets try maximising it). We've tightened up our stop to around the 830 level (so above entry) but we're looking to add again risking 2% in our additional position which we're looking to add at the 848.50 level with stop also around the 830 level.
Good luck!
You see...MCFX lost his job today. It was coming. It was the "personal issues" we referred to on the weekend - nothing more traumatic than that. We'll move on - something to possibly delve into in a future blog.
Anyways, we'll get back into our discipline tomorrow. We've no closed trades since our last proper update so the fund is still down 11.636%. But at least our open positions are all looking okay and MtM we're up about 3% from them.
The big one is the SPX futures we piled into yesterday evening. We're going to ride this trend (if it comes - now that we've bagged a winner, lets try maximising it). We've tightened up our stop to around the 830 level (so above entry) but we're looking to add again risking 2% in our additional position which we're looking to add at the 848.50 level with stop also around the 830 level.
Good luck!
Monday, 26 January 2009
Gut feel that this is the one...
Foolish perhaps. But we just risked another 1% of our portfolio to buy another chunk of the SPX future at 827 this time. Stop around the same level at roughly 810ish.
Good luck!
Good luck!
Quick!
Just a quick note that we have dipped into the equity market again. We have bought a decent-sized position in SPX March futures at 829 level with stop around 810 (risking 2% again). Yet another try at the bear-market rally though our ammo is reduced from recent failed attempts. Not to despair though. We will make it back fairly quickly once the rally comes due to disciplined risk-reward.
Good luck!
Good luck!
Sunday, 25 January 2009
Blogging down due to personal issues
Fund performance: -11.636%
Active trades: Still short EURAUD, short EURGBP and long GBPCHF.
Personal issues and the market volatility have taken their toll on MCFX. It's been nearly a week since our last update and we fear the week ahead will also provide only limited time for blogging. The fund is doing fairly poorly so far. We have tried to play several overall themes:
1. Looking for a bear-market rally; a significant one. We still believe in this theme and in fact, in our full-time capacity, were vocally calling for the turn on Friday afternoon. We await for Monday's price-action to confirm this bounce as all previous attempts have fizzled out very quickly. But we are enthusiastic about jumping on this trend when it comes. However, so far, this idea has been the source of most of our pain. Wall Street is littered with the bodies of those who have been too early in their thinking. We have tried to be too clever.
2. GBP has sold off too much. We have got this on through short EURGBP and long GBPCHF and still like these trades. We got stopped out of our long GBPJPY trade twice! Frustrating. Our mistake here was pre-empting the end to the JPY strengthening trend as opposed to any problems with our GBP view.
3. As mentioned above, we think JPY strengthening is coming to an end. We are aware that deleveraging periods will continue to support it but between Japan's enduring economic struggles and the risk of MoF intervention, we think it will not go significantly further from here.
4. USD should strengthen. This view was correct but we never got it on. We now fear that if the USD backs up enough to put on the trade, then something may have changed - but for now, we still believe that the USD will strengthen significantly this year.
4. EUR will collapse at some point this year. We have this on through short EURAUD (possibly a hasty trade) and short EURGBP.
Sorry for the lack of originality / humour / anecdotes in the last few posts - due to external issues, we have been emotionally drained. The enthusiasm shall soon return!
Good luck!
Active trades: Still short EURAUD, short EURGBP and long GBPCHF.
Personal issues and the market volatility have taken their toll on MCFX. It's been nearly a week since our last update and we fear the week ahead will also provide only limited time for blogging. The fund is doing fairly poorly so far. We have tried to play several overall themes:
1. Looking for a bear-market rally; a significant one. We still believe in this theme and in fact, in our full-time capacity, were vocally calling for the turn on Friday afternoon. We await for Monday's price-action to confirm this bounce as all previous attempts have fizzled out very quickly. But we are enthusiastic about jumping on this trend when it comes. However, so far, this idea has been the source of most of our pain. Wall Street is littered with the bodies of those who have been too early in their thinking. We have tried to be too clever.
2. GBP has sold off too much. We have got this on through short EURGBP and long GBPCHF and still like these trades. We got stopped out of our long GBPJPY trade twice! Frustrating. Our mistake here was pre-empting the end to the JPY strengthening trend as opposed to any problems with our GBP view.
3. As mentioned above, we think JPY strengthening is coming to an end. We are aware that deleveraging periods will continue to support it but between Japan's enduring economic struggles and the risk of MoF intervention, we think it will not go significantly further from here.
4. USD should strengthen. This view was correct but we never got it on. We now fear that if the USD backs up enough to put on the trade, then something may have changed - but for now, we still believe that the USD will strengthen significantly this year.
4. EUR will collapse at some point this year. We have this on through short EURAUD (possibly a hasty trade) and short EURGBP.
Sorry for the lack of originality / humour / anecdotes in the last few posts - due to external issues, we have been emotionally drained. The enthusiasm shall soon return!
Good luck!
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