I lost on that trade, 11 points to be exact. It may still come to fruition but I am not on it. These trades are supposed to work immediately. The DAX is weak and dragging everthing down with it, even the FTSE.
The trade below was inpired by the chart below. We hit a perfect 1:1 in the DAX, and I pretty much managed to get the low tick. It wasnt planned, but it just happened. I wanted to maximise my leverage by shorting the FTSE, but that turned out to be my error. It was the FTSE bet that lost me all what I made on the DAX and then some..
You will see on the chart 6779 printed. I think that we need to see the DAX get above 6779 to be bullish again. The reason why I am not shorting is because we are so close to the low from yesterday. I would rather buy a succesful retest where the DAX dips below and closes above on a 15-mn chart. I think I have to wait to closer to the US session for that to happen.
I havent included a chart of the FTSE 100, but It looks rangebound to me. ....
I have just sent out my newsletter. I hope you got it.
All the best for today
Tom
9th April 2008 EXTRA 19:57pm
The markets are selling off. I think there is an opportunity here. It is a cross arbitrage trade. Currently the DAX is being indicated to open 50 points lower tomorrow, while the FTSE is being called down 20 points. On top of that the FTSE only declined 6 points today, while the DAX declined 50 points. This divergence tend not to last long. It is not without risk. Oil is trading at $110, and the FTSE 100 is oil rich. My trade is to buy the DAX and sell short the FTSE and I have already done so. I am speculating that the DAX and the FTSE will converge tomorrow.
Good luck - your trade:your responsibility
Tom
9th April 2008 - 06:30am
Good morning,
The SP500 fututures have been trading in the range for the better part of 135 trading hours. The last decline lasted 135 hours. I think now is a time to be very vigilant for a reversal, and follow it. Right now 1360 is support. We have had good buying support in this area every time we traded down there. The price spike overnight looks like a retracement in a downtrend, so be aware for the potential for more downside today. The path of least resistance seems to be down.
The SP500 futures have made a high of 1339, which corresponds to 1337 in the cash market. We slipped below support yesterday and are now testing it, trying to break through. Much will depend on Europe. Dow is already erasing much of yesterday's losses. City is calling the up 80 points. I am still long the FTSE and the DAX, but I may not stay long for long if the SP500 per-market begins to slip. The DAX futures will open in 15 minutes. Much will depend on the strength here. It is a Fibonacci Time Count reversal day today.
it is a quiet morning in the indices. Asia did little overnight. I will update at 9am with some charts and thoughts.
10:24am update
The markets are breaking to the upside. The SP500 hourly cash chart below is showing the SP500 pulling back to support at 1335/7, and holding. I am long betting on a move up to 1387.
25th March 2008 - 10:15am
Good morning,
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The 60-min chart for the FTSE 100 cash chart is potentially bullish. The problem for the bullish case is that 5690 is the old lows from early February. Secondly the first leg and the second leg up since the 13th Feb are now 100% equal. I will be a buyer of a retracement down to the 5620 area. Otherwise I will wait till later in the day and potentially buy a dip. I doubt very much the Dow will do much today. It has gained some 500 points in two sessions.
I have some time material in the newsletter, which I will send out later today.
lots of opportunities this morning at 07:05. For example, do you believe that the FTSE and the DAX will open with a 70 point differential. I dont. Buying Dax at 6270m and selling short FTSE at 5530.
more coming as I see them.
07:40am
I think a low will be made over the coming days. Anyway, where that is, and at what price, we can only guess, or put some retracement levels on etc.
I wanted to show you a chart from the Rich Man's Panic in 1907. I have circled the area where we are now in my opinion, as compared to 1907. It is a thrilling read in the Jesse Livermoore biography. Anyway, if history is a guide, then we will see these markets rebound shortly for a month or more, before more is coming. Of course it does not have to repeat, but 100 years ago, it was called the Rich Mans Panic because they all ran out of cash. Back then it was the JP Morgan himself who had to lend his name and reputation to support the maket to recovery. History eh? :)
Tom
Dow Jones Index during the Rich Man's Crash of 1907.
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ANALYSIS
TraderTom Newsletter 31st March 2008 
