What to short next...

[notoc]

• Tweet

This week could see the last gasps of the dollar 'recovery' and by Friday I expect to have moved out of shorting the Pound against the Dollar and reverted to shorting the Dollar against the Euro.

It's always impossible to call the top of any upturn but one way or another the next big US 'stimulus' is going to cause some serious overtime at the printing presses.

One ear needs to be listening to the noises coming from the Bank of England and the European Central Bank with regards to yet another cut in interest rates but all things considered, while the Pound and the Euro may not have reached the very bottom of their respective troughs, the Dollar can't be very far off its ceiling.

All the above could turn out to be famous last words, but at least it's my own money I'm risking.. now if only I could arrange my very own government bail-out to underwrite my investment-bank-like profiteering, speculation standard business practices.

[lucy]

Some analysts warn of a serious deflation of the dollar...frankly, the printing presses at the Fed are a scary operation....

[notoc]

[notoc]

OK Here's my working capital positions as of close of play Friday:

I'm 40% long of paper gold, have been since the begining of last month when I increased my holding from 25%.

25% short of the DOW, have been since the 1st of the month - may think about closing this position 20 mins before end of US trading today, depending on the volumes that move the whole Average one way or another. The PPT may just be tempted to play games in order to flush out the intraday short traders.

25% long of EURO, may increase this before midnight GMT with any profits I manage to take from closing out my DOW shorts.

10% is unfilled, I'm looking at buying a couple of crude contracts but since i got my fingers burned with my last crude trades, I'm hesitant. I may just put the 10% into a short USD spread bet against the Yen - on the other hand I might just go looking for a short financial position on the back of any positive press release from the head of any bank telling his customers not to worry because everything is just fine.

[notoc]

Had a bit of luck this evening, Gold spiked to $845/oz from a steady $835/oz and as I'd set my 50% stop and limit at 814/844 half of my paper gold position was closed at $844/oz - a pretty good return on my $720/oz purchase price.



I almost immediately increased my short DOW position by a further 50% selling making my total DOW exposure to 32.5% of my total working capital (The original short position was sold at 8820, today's additional short was sold at 8560). I closed my total DOW position half an hour before the close at an average price of 8480 only to see it drop to 8466 - but my disapointment was short lived as the next 10 minutes saw it go to 8600.

So at the minute I'm still 20% long of paper gold and 25% long of EUR against the USD...

20 minutes to go before the US markets close... do I sit tight or take a punt that the DOW's upturn will reverse itself in the last half hour of trading - if it hits above 8600 anytime before the close I think I'll bet against it and buy a small short position and auto sell it at the closing bell...

[notoc]

OK, the dow just moved through the 8600 mark and I managed to buy a small(ish) short position at an average of 8620... now I just have to sit tight and see which way my luck is going to go.... I have an auto stop at 8650 but no auto limit, which I may regret.

[notoc]

DOW closed at 8564.53... happy days.

I've taken my paper gold holding back up to 40% of my working capital at a price of $833/oz, buying back the part position that I sold earlier this evening.

I have increased my EUR/USD to position to 35% (giving me a buying average of 1.31 EURO to the dollar)

Couldn't find a bank chief talking-up his stock before the bell so I have 25% of my trading capital sitting in a holding account waiting to buy a short USD/JEN spread position towards midnight tonight on anticipation that the FED cut the US overnight lending rate by at least a quarter of one percent tomorrow.

I should perhaps have just put the lot into a long DOW position just before the close today, but I'm just not confident enough that a FED rate cut tommorow will move the US markets without a firm commitment to nationalising the US auto industry.

[Michael]

Your financial acumen is a bit beyond me.  I'm impressed.

Hope it works well for you.

[notoc]

Your financial acumen is a bit beyond me.  I'm impressed.

I'm almost always impressed when I see anyone at their work place, what they themselves may consider to be workaday events are in fact the things that go together to earn them a title of 'skilled labour'. Although many companies are structured in such a way that their so-called management often loses sight of that fact.

Hope it works well for you.

Thanks. I'll be reporting my profits and my losses, so anyone with a hidden hope that things don't works well for me might also find the time to read my posts.   

[Michael]

I'm almost always impressed when I see anyone at their work place, what they themselves may consider to be workaday events are in fact the things that go together to earn them a title of 'skilled labour'. Although many companies are structured in such a way that their so-called management often loses sight of that fact.

I am VERY familiar with that.

Thanks. I'll be reporting my profits and my losses, so anyone with a hidden hope that things don't works well for me might also find the time to read my posts.   

I read your posts.  I find them quite interesting.

I know that I tend to regard 1/2 of western europeans as not being worth crap in a handbag....but you are certainly not one of them. 

[notoc]

So here's my book, as it stands at 13:00 GMT

30% is exposed to paper gold futures at an average cost of $776/oz (half was bought at $720/oz and half at $833/oz). Current price is $836/oz

35% is exposed to long EUR/USD positions at an average buying price of 1.31 Euro to the Dollar.
Current price is 1.37 Euro to the Dollar.

25% has been exposed to a short USD/YEN position since 23.30 GMT last night at a selling price of 91.04.
Current price is 89.85 Yen to the Dollar.

Month-to-date profits taken up until noon today equal 7% of my total book and with this I purchased long daily DOW futures as the grey market opened in London this morning at 8571.
Current DOW price is 8670.

My trailing stops have been set to close out of my DOW positions at an average maximum loss of 2%... so if the DOW had touched below 8400 at any time, I was dust. As it stands the DOW has been as high as 8689 so my 2% stops have been automatically following my positions and will now auto-close me out at anything below 8470. Showing me an actual loss net of around 100 points or 1.2%. The DOW will need to touch 8745 before I am guaranteed a profit on my total position.

But, since my DOW position is my pet project today I will be following the movement constantly and buying and selling in 10 or 20 % lots throughout the day according to the peaks and troughs (selling the peaks and buying the troughs)  hoping to 'lock-in' at least a break-even as soon as possible - a dangerous game, but that's where all the 'fun' is in this 'job'.

[notoc]

I know that I tend to regard 1/2 of western europeans as not being worth crap in a handbag....

Hey, I'm a member of that club. 

[Pepsi]

hey notoc, mind if I ask what do you use as a trading platform?    not that I'm getting started, lord knows I have no business playing the market, just curious.

[notoc]

I sold my complete DOW position just before the opening bell in NY at an average of 8685...

I'm now hoping for a dip while the first 10 mins of 'real' trading settles.

[notoc]

hey notoc, mind if I ask what do you use as a trading platform?    not that I'm getting started, lord knows I have no business playing the market, just curious.

I have direct access to the FOREX currency markets via an in-house trading platform offered my a company on the Isle of Man (off-shore as far as UK tax).

Most of my single stock trades are placed via online accounts with CFD brokers such as Price Waterhouse.

My 'Whole Market' punts are usually placed as a series of spreads 'bets' with a number of UK brokers (UK tax law zero rates everything deemed to a gambling profit - it also zero rates everthing deemed to be a gambling loss, so I don't get to offset my spread losses against my capital gains tax bill).

Update - I just bought back my original DOW positions at an average of 8620 - happy days, for now.