Wednesday, June 27, 2012

Starting to build Long Crude Oil position after 30% fall.

Crude Oil fell 30% in the last 2 months and it gives me a reasonable Risk/Return perspective to start a tentative Long position around the $80 level via the CL August '12 contract.

A clear stop would be situated below 77.5.

Thursday, June 21, 2012

FX Majors are flirting with their 50% retracement levels.

 FOMC tonight announced that it will continue its Operation Twist.
Details can be found in all major news-wires, Bloomberg for example:

All currencies have had a good run down as the USD strengthened all throughout May 2012. Once a strong trend like this is reversed traders start to think where its correction will end as it is a natural inclination of the markets as representation of the mass human psyche to pursue a goal or follow an established trend while it lasts. And momentum and inertia are most powerful and enduring forces, so I'd like to be short ahead of the 50% retracements of the latest trends as markets tend to mean reverting so a 50% correction should be quite sufficient before markets resume its due course. Otherwise it's all a matter of Risk/Money Management.

 EUR/USD did touch close to the 50% around 1.2787 and is hovering post NY session around 1.27. Slow Stochastics are not overextended and it's way below its 200-Day SMA which naturally reflects its beaten up status among the Debt crisis mess with all the Southern European countries with rising Bond Yields.

 GBP/USD has bounced off its Triple Bottom around 1.5262 and quite sufficiently touched the 50% level at 1.5783 and quickly fell back below the 200-Day SMA. Key Levels are the 20011-2012 range 38.2% level at 1.5832 and the 1.5660 (38.2% level of the latest correction) on the downside once (IF) the reversal to the prevailing down-trend starts.

 AUD/USD already did 6 big Figures up and stopped right before its 50% correction around 1.0218 and the 200-Day SMA and also just below the 50% level of the whole 2011-2012 range. Slow Stochastics here are mostly over-extended and poised to flash a major Sell signal.

USD/CAD has built a major short positioning among the retail accounts and that is just one facet of the Long view here. Slow Stochastics are turning Up while the pair is still far from the 50% and the 200-Day SMA, however it's sitting right on the 38.2% of the 2011-2012 range. The signal here is somewhat weaker but those uncertain trades often turn the best winners.
These levels are on the table now so I'm positioned to buy the USD agains the majors for a resumption of the latest trend we witnessed in May. Certainly we might hit the 61.8% or even reverse the whole trend and venture into major USD weakness but it's all possible in the markets and in the world as a whole so that's why Money/Risk Management is key to our survival as traders and humans as well. Good luck & good trading!

Tuesday, June 5, 2012

Shorting Long Term Bonds - Sold TLT at 129.59 on June 05, 2012.

Long term Yields are reaching all time lows. I'd like to buy them for a change.

Sold the Long Bonds through the TLT (iShares Barclays 20+ Years Treasury Bond ETF) yesterday at 129.59.