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" We are what we think. All that we are arises with our thoughts. With
our thoughts we make our world" The Buddha
18th March 2009
Open Positions
no open positions at this time
Sold Short Sterling Dollar 1.4050 07:08am LIVE trading room - closed 1.3965 + 85 points
Sold short Dax June future at 4055 - closed at 4003 - LIVE trading room + 52 point profit
Bought $Chf at 1.1748 - closed at 1.1711 - Live Trading room - minus 38 point
Dow futures trading 5pm onwards - 28 points....
Profit loss from the 17th: see trade sheet
Trade Sheet
UPDATE 08:17am
To read IT message from WhichWayToday live trading room, please go to "Archives" and click on "17th March 09".
It was a mixed bag yesterday, with the LIVE trading room making some 30 points trading Forex, and then making some 20 points in the Dow, only to lose all the Dow gains due to a black-out in the site. Arh, the IT side of a website can be a tedious thing. Especially when you recommend to sell SHORT Sterling Swiss at 10:45am yesterday morning, only to see the message not making it to the room (an alert was given 10 min before), and the currency falling 120 points. I hope some manage to catch it.
This morning is interesting in the indices because the close last night was above 775 in the SP500. Technically and cyclically this means that we should be on our way up towards 900 in the index. I am playing this trade with options so far. In between there will be a lot of buy and sell set-ups. My option play however is an attempt to capture the whole move.
The Swiss National Bank is lurking in the background on this potential trade set-up. The chart below is my attempt to pursuade my own mind that this pair is on its way up to 1.2080. I have tried all morning to get a decent entry signal. My prefered entry is 1.1750. But I am not getting any luck picking up a position so far. Currenty we are trading at 1.1806.
I have just completed a trade in the live trading room, selling short Sterling Dollar at 1.4050, getting out at 1.3965. I want to keep the analysis from yesterday here because it is still in play:
Sterling Dollar is making an re-test of the channel. I believe that a sizeable move is underway in Sterling Dollar. The cycles are close to confirming that a low was made at $1.3675. Yesterday Cable broke out of the channel it has been in for the last month. This morning it is testing the top of the channel (see chart below).
On the 240-min chart you can clearly see how the index is hugging the blue trend-indicator line, indicating a trend change. The blue line is beginning to point up. The only caveat (and there always is one in trading) is that if this is simply a 3-wave corrective move, then this little bounce from 1.37 to 1.41 is all we will get.
I will keep the analysis from yesterday here today as well because this trade is still in play, and we are slowly and gradually inching our way towards parity:
The next chart is the inverse Euro Sterling (ie sterling Euro), currently trading at 1.08. I have a fairly vested interest in this pair, as I converted a large part of my petty savings into this currency from Sterling, when the pair was trading at 1.40 and again at 1.28. It is an un leveraged trade, meaning I have simply bought Euros with my sterling cash. It was my personal trade of the year, BUT so you know, I am still in this trade, and I am still betting that we will see 1:1 with the Euro.
A little insight into my private life: I have a mother who lives in Spain, and as the good son I am, I go and visit as often as I can. Yes, I know it is a drag to have to go to a hot country with nice food and wine to visit one's mother, but I was brought up well. Last week I went there and took a taxi ride from the airport to the house. I's say this is a 15 min ride. The trip came to €30, which is about £26. The same ride in London would cost me no more than £12. As I read the papers on the coast, I hear about ex-pats from the UK, who are moving BACK to the UK, because they simply can't afford to live anymore. So to the person who emailed me yesterday about the fundamental reason for being "long" rather than "short", I say to you: Yes, you are probably very right. The fundamentals probably DO point to the Euro weakening against Sterling. But as you glance the chart below, do you see any technical reasons (yet!!) for being long on this chart? Imagine you didn't know what this chart represented. Maybe it is a stock, or an index, or maybe a currency. Either way the chart is pointing down, and it could go much lower, but it could also reverse. I don't know, and neither do you. All we can do is to play the trend to the best of our ability. There are no "special" circumstances" for any asset. A chart is a chart, no matter what it depicts. I once read a book about commodity trading. It went through various set-ups, and then came to Orange Juice. It concluded that in Orange Juice this particular set-up did not work, due to the nature of the product. I asked myself at the time: are Orange Juice traders different from other traders? Are they different human beings who don't fall prey to emotional idiosyncrasies? As the answer was "of course they do", I threw the book in the bin.
ANALYSIS
