FT has been trading full time from home for four years, with nothing but four kids and a beach to distract him .
He fills his spare time with weight training and rugby, though more coaching than playing these days.
FT mostly trades the forex markets and although he plays FTSE on occasions his bread and butter market is £$.
He likes to think that his technique is evolving but still hasn’t the temperament or money to back the big calls. He prefers to trade between 1 and 3 times a day, aiming to take regular small gains, but feels part of the evolution is in not dealing if the conditions don’t feel right.
Equities Rally Into The Close
Hi folks,
Well, the best that can be said of equities is that they’ve held up well in the face of further appalling data. I’ve not been too involved in markets that have seemed pretty directionless until late afternoon, and what I have traded has cost me.
Tomorrow’s Thanksgiving Holiday meant that lunchtime was chocker with US data, and there was a common theme. The durable goods numbers have a well-deserved reputation for being erratic, but even so today’s headline of -6.2% was a bit of a shocker. The weekly jobless data were no worse than expected but both the Chicago PMI and the University of Michigan confidence surveys were weaker than their lowly expectations. And for dessert the new home sales fell by 5.3% on the month, again worse than forecast.
A week ago those sorts of numbers would have had traders rushing for their ’sell’ buttons, but I suspect today is more about not getting caught short of equities. So why aren’t equities pushing ahead?
This could be down to several reasons, including some that I mentioned yesterday (Watch Out For More Equities Into Bonds):
1) Some of the switching could have been done late last week at the lower levels,
2) Some funds, with more flexibility over timings and weightings, might have decided to hold off after seeing how last month’s rebalancing hurt fund performance over the month,
3) Those that have to re-balance might also have to do this at set valuation points, so Friday rather than today.
4) Goodhart’s Law. Now we’re all ready for it, it just doesn’t happen, at least not in such a marked way.
There’s been little point in trading fundamentals just at the moment so I’ve been trading FTSE mechanically, using technical indicators. And I have to admit that I’m showing a small loss today. The profitable trades generally got stopped out too early, even though I used a patient 30-point trailing stop loss, and the one that went wrong stopped out £3 at -30 points. This was enough to wipe out the small gains, but there was no major damage done.
One reason for using the mechanical system today was that I’ve been beavering away, writing a couple of articles on the oil price ahead of Saturday’s OPEC consultation meeting. The first article is out now and looks at the supply/ demand problem (Where Next For The Oil Price?); the second article tomorrow will look more at short-term influences and how I might look to trade it.
The curse of being a slow typist is the ever-changing market place. Equities have now made a decent push with both the Dow and S&P 500 bouncing off their 14-day moving averages and FTSE pushing above its 14-day average.
I’d planned to write about this afternoon’s Euro weakness, with the EURGBP breaking below £0.84. But the rate stopped just shy of its 21-day moving average at £0.8363 and rallied back to the comfort zone of mid £0.84s.
I’m not looking for any trading opportunities over the next couple of hours so a trip to the gym might be in order.
Happy Trading
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November 26th, 2008 at 6:00 pm
Yeah, it’s been a kind of nothing week for equities unless you were lucky enough to catch Monday’s move (which seems like another sure sign that we’re still in a bear market — that’s when all the big up days occur). And now it’s pretty much all over until Monday.
Interesting wedge on the FTSE chart, formed by your downtrend above and a horizontal connecting the Oct/Nov lows. A breakout looks near, but which way? Ultimately, I think we’re going down to the 2003 lows around 3200 but my gut still says we’re due a break up first (how scientific!).
I reckon we’re due a test of the 50 (yes, fifty) DMA, where FTSE hasn’t been since May. It won’t happen overnight (now that would be volatility) and the 50 is falling, so we could see a connect at around 5000 by the year end. This would also just about coincide with the downtrend connecting the May and end-Aug peaks.
But I’ve not had the balls to go long this week. I’ve restricted myself to the Dec options, last Friday for the puts down at 3200 and Monday for the calls at 4675. Juicy premiums on offer — but there’s a reason for that and I’ve already bought back half the 3200s pocketing 65 points.