2011-04-29th (Fri)

At the end of the previous trading session I had the following positions;
Long 30 contracts Copper July 2011 with ACB of 426.15

Buy 10 contracts Copper July 2011 at 420.00 (2011-04-29, 09:52 am EST)

Currently I have the following position;
Long 40 contracts Copper July 2011 with ACB of 424.61

Copper July 2011 closed today at 418.53

I continue to hold my Thesis of a weakening USD and have decided to play it in the following way;
pending GTC Buy-To-Open 200000 USDCAD at 0.9350
pending GTC Buy-To-Open 200000 USDCAD at 0.9200
pending GTC Buy-To-Open 200000 USDJPY at 81.000
pending GTC Buy-To-Open 200000 USDJPY at 80.000

USDCAD closed today at 0.9450
USDJPY closed today at 81.2180

I had written in my 2011-04-19th (Tues) report my thoughts of trading AUDUSD at 1.05863 (2011-04-20, 02:10 am EST) but I missed that trade because I was occupied by other trades and AUDUSD closed today at 1.09692.

Stay Tuned for the Royal Wedding tonight!!!

Jeff
(2011-04-29, 18:34 pm EST)

2011-04-28th (Thurs)

At the end of the previous trading session I had the following positions;
Long 30 contracts Copper May 2011 with ACB of 428.70
Short 30 contracts Wheat May 2011 with ACB of 802.55

Buy-To-Close 30 contracts Wheat May 2011 at 751.50 (2011-04-28, 12:28 pm EST) for a nice profit.

Copper May 2011 rolled-forward to July 2011 contract;
Roll-out-of 30 contracts Copper May 2011 at 424.50 resulting in a deemed disposition loss.
Roll-into 30 contracts Copper July 2011 at 426.15 as my new adjusted cost basis.

Currently I have the following position;
Long 30 contracts Copper July 2011 with ACB of 426.15

Copper July 2011 is currently 424.03 (2011-04-28, 22:23 pm EST)

Tomorrow is Friday and I hesitate to open new positions, let me take a rest tomorrow as a reward to myself and wind down and use the weekend to research my Thesis on USD more.

Stay Tuned,

Jeff
(2011-04-28, 22:24 pm EST)

2011-04-27th (Wed)

At the end of the previous trading session I had the following positions;
Long 30 contracts Copper May 2011 with ACB of 428.70
Short 30 contracts Wheat May 2011 with ACB of 802.55

Copper May 2011 is currently 427.05 (2011-04-28, 02:19 am EST) expiring 28th.
Copper July 2011 is currently 428.48
Wheat May 2011 is currently 778.75 (2011-04-28, 02:19 am EST) expiring 28th.
Wheat July 2011 is currently 812.15

I TIVO'ed Bernanke's press conference for review, and when he spoke of his preference for a Strong Dollar the USD Index Futures was near its peak for the day where it had rallied ahead in anticipation.

The highest impact arsenal in the tool-box for Bernanke and Geithner is Fiscal and Monetary Policy so I am not sure what specific action not yet anticipated by market participants can be done.

My Thesis stands for the USD to weaken long-term although it is almost time for a technical rebound so yesterday I placed the following trade pending;
GTC Buy-To-Open 200000 USDCAD at 0.9350
USDCAD is currently at 0.9486 (2011-04-28, 02:48 am EST)

Stay Tuned,

Jeff
(2011-04-28, 02:49 am EST)

2011-04-26th (Tues)

At the end of the previous trading session I had the following positions;
Long 30 contracts Copper May 2011 with ACB of 428.70
Short 30 contracts Wheat May 2011 with ACB of 802.55
Short 1 contract Silver May 2011 with ACB of 48.515

Buy-To-Close 1 contract Silver May 2011 at 45.74 (2011-04-26, 01:37 am EST) for a profit.

Currently I have the following positions;
Long 30 contracts Copper May 2011 with ACB of 428.70
Short 30 contracts Wheat May 2011 with ACB of 802.55

Copper May 2011 is currently 430.93 (2011-04-27, 00:34 am EST) expiring 28th.
Copper July 2011 is currently 432.98
Wheat May 2011 is currently 803.88 (2011-04-27, 00:34 am EST) expiring 28th.
Wheat July 2011 is currently 839.65

I am concerned about the market's reaction to the FOMC meeting minutes at 12:00 noon EST and Bernanke's news conference at 1:00 pm EST on Wed 27th.

I am confident in Bernanke's wisdom, but experience had taught me that crowds are stupid.

My expectation is for USD to weaken tomorrow, and I am thinking which currency pair will give me the greatest volatility.

With both equity markets trading at its peak simultaneously during the two time periods I pick USDCAD currently at 0.94870 (2011-04-27, 01:11 am EST)

GTC Buy-To-Open 200000 USDCAD at 0.9350

Stay Tuned,

Jeff
(2011-04-27, 01:12 am EST)

2011-04-25th (Mon)

At the end of the previous trading session I had the following positions;
Long 20 contracts Copper May 2011 with ACB of 428.06
Short 30 contracts Wheat May 2011 with ACB of 802.55

Silver gapped-up and 1-Min Candles show an intra-day high to 49.775 and intra-day low to 45.632.
This may to the beginning of the end, and only time will tell.
Sell-To-Open 1 contract Silver May 2011 at 48.515 (2011-04-25, 01:50 am EST).

Copper is in a long-term up-trend so I continue to buy the dips.
Buy 10 contracts Copper May 2011 at 430 (2011-04-25, 10:06 am EST)

Currently I have the following positions;
Long 30 contracts Copper May 2011 with ACB of 428.70
Short 30 contracts Wheat May 2011 with ACB of 802.55
Short 1 contract Silver May 2011 with ACB of 48.515

Copper May 2011 is currently 429.85 (2011-04-25, 14:34 pm EST) expiring 28th.
Copper July 2011 is currently 431.35.
Wheat May 2011 is currently 826.88 (2011-04-25, 14:34 pm EST) expiring 28th.
Wheat July 2011 is currently 860.88.
Silver May 2011 is currently 47.305

Stay Tuned,

Jeff
(2011-04-25, 14:37 pm EST)

2011-04-24th (Sun)

At the end of the previous trading session I had the following positions;
Long 20 contracts Copper May 2011 with ACB of 428.06
Short 20 contracts Wheat May 2011 with ACB of 793.82

I researched into my Thesis and believe based on what I currently know that Wheat May 2011 is on a down-trend and thus should Short the spike even when facing negative-roll-yield in contango.

Sell 10 contracts Wheat May 2011 at 820.00 (2011-04-24, 20:48 pm EST)

Currently I have the following positions;
Long 20 contracts Copper May 2011 with ACB of 428.06
Short 30 contracts Wheat May 2011 with ACB of 802.55

Copper May 2011 is currently 437.25 (2011-04-24, 21:29 pm EST) expiring 28th.
Copper July 2011 is currently 438.23.

Wheat May 2011 is currently 818.25 (2011-04-24, 21:29 pm EST) expiring 28th.
Wheat July 2011 is currently 851.75.

Stay Tuned,

Jeff
(2011-04-24, 21:41 pm EST)

2011-04-21st (Thurs)

In the previous trading session I had the following positions;
Long 10 contracts Copper May 2011 with ACB of 422.23
Short 10 contracts Wheat May 2011 with ACB of 800.00

Sell 10 contracts Wheat May 2011 at 787.63 (2011-04-21, 01:43 am EST)
Buy 10 contracts Copper May 2011 at 433.88 (2011-04-21, 01:48 am EST)

Currently I have the following positions;
Long 20 contracts Copper May 2011 with ACB of 428.06
Short 20 contracts Wheat May 2011 with ACB of 793.82

Copper May 2011 closed at 438.13 (2011-04-21, 23:33 pm EST) and expires 04/28th (Thurs).
Copper July 2011 closed at 439.43.
If this insignificant positive-roll-yield persists I will let it automatically roll-forward on 04/29th to avoid slippage.

Wheat May 2011 closed at 793.50 (2011-04-21, 23:34 pm EST) and expires 04/28th (Thurs).
Wheat July 2011 closed at 832.40.
I am considering manual offsetting or even closing my Short at a Loss to avoid negative-roll-yield.

I wonder if I should Long Wheat just to get positive-roll-yield if the wide contango persists?
Theory has it that the two prices should converge which means Spot will go up and my Short will loose money.

Tomorrow is Good Friday April 22nd and most of the global markets will be closed.
European markets are also closed on Monday April 25th.

In the next three days I will need to make a decison on my Short Wheat position, for it will be stupid to loose money on such a textbook maneuver.

Stay Tuned,

Jeff
(2011-04-21, 23:55 pm EST)

2011-04-20th (Wed)

In the previous trading session I had the following positions;
Long 10 contracts Copper May 2011 with ACB of 422.23
Long 5 contracts Gold April 2011 with ACB of 1501.75

Sell-To-Open 10 contracts Wheat May 2011 at 800.00 (2011-04-20, 07:23 am EST)
Sell-To-Close 5 contracts Gold April 2011 at 1503.55 (2011-04-20, 12:03 pm EST) for a tiny profit.

Currently I have the following positions;
Long 10 contracts Copper May 2011 with ACB of 422.23
Short 10 contracts Wheat May 2011 with ACB of 800.00

Copper is currently trading at 431.88 (2011-04-21, 00:04 am EST)
Wheat is currently trading at 788.63 (2011-04-21, 00:05 am EST)

Stay Tuned,

Jeff
(2011-04-21, 00:55 am EST)

2011-04-19th (Tues)

I believe the metals and commodities I am tracking rose today because the USD weakened today.

I am long-term bearish on the USD but in F/X there are always minor spikes so I am selecting my time-frame to trade, and most importantly against which other currency.

I am trying to decide between the two currency pairs;
AUDUSD currently at 1.05863 (2011-04-20, 02:10 am EST)
USDCAD currently at 0.95405  (2011-04-20, 02:10 am EST)

This is to capture the most sensitive political and economic topics of this month, Oil and the US economy, for the volatility and violent swings make it possible for me to make money and get out of losing positions if required.

I have not concluded on the direction of the Channel thus cannot decide to Long-The-Dips or Short-The-Spikes as primary strategy yet.

Currently I have the following positions;
Long 10 contracts Copper May 2011 with ACB of 422.23
Copper is currently trading at 427.38 (2011-04-20, 02:14 am EST)

Gold broke 1500 and has sustained for more than one-hour.
Buy-To-Open 5 contracts Gold April 2011 at 1501.75 (2011-04-20, 02:27 am EST)

Currently I have the following positions;
Long 10 contracts Copper May 2011 with ACB of 422.23
Long 5 contracts Gold April 2011 with ACB of 1501.75

Copper is currently trading at 428.28 (2011-04-20, 02:28 am EST)
Gold is currently trading at 1500.98 (2011-04-20, 02:28 am EST)

Stay Tuned,

Jeff
(2011-04-20, 02:30 am EST)

2011-04-18th (Mon)

I am excited, because there is volatility in the markets.

This morning S&P cut its outlook on US debt rating from stable to negative.  This is not new news but in fact has been circulating for months now.  Since the US must raise its $14.3T debt ceiling by May 16th there is growing concern because of the grid lock in Congress thus the markets are reacting to S&P today.  Moody's has said nothing... yet?

Studying US economic history the country has never reneged on its debt obligations.  Greece has defaulted at least five times and so one should worry more about their situation, some may argue the markets have already digested the information.

Time will tell if I am right or wrong in my analysis, and I stress that I only need to be right short-term.  As stated in past reports I believe the graph is from lower-left to upper-right long-term, but it is by the shortest time-frame price oscillations that I make my living.

I salute Bill at pacific investment management for getting out of his positions in March, his research people have a better finger on the numbers for they have a department with serious education degrees tracking each issue.  Bill may even have a better count on M3 than shadow statistics.

So what does all that mean for our portfolios?  That is the question.  It is a waste of my time to write any detailed analysis for there will be many people doing that online and on TV.

Buy-To-Open 10 contracts Copper May 2011 at 422.23 (2011-04-18, 18:08 pm EST) as a begining position with the intention to accumulate.

The charts have not yet shown a point-of-inflection, I am stepping on the gas well before the track-out point and going into the turn without even trail braking to the apex.  I am doing this trade because people shoot first and then ask questions, and because I have closed out all my positions last night and have full available margin to pile on and pile on and pile on.

Currently I have the following positions;
Long 10 contracts Copper May 2011 with ACB of 422.23

Copper is currently trading at 421.75 (2011-04-18, 19:03 pm EST)

Stay Tuned,

Jeff
(2011-04-18, 19:03 pm EST)

2011-04-17th (Sun)

Last week I wrote I would be using Saturday and Sunday to research my Thesis to support or dispute myself.

It has been a frustrating 48-hours of research for I have found equal stories to play the Long or Short.  This does not delight me as I never want to place my plays without an edge, and to arrive at the conclusive that the market is now fair game with no edge I can leverage is not right for me.

So I am out of the market, as simple as that.  As soon as the competitive advantage disappears my money is off the table immediately.

I ended the last trading session with the following positions;
Short 150000 USDJPY with ACB of 83.227
Short 1700 contracts Nikkei 225 with ACB of 9553.34

Buy-To-Close 1700 contracts Nikkei 225 at 9551.30 (2011-04-17, 21:23 pm EST) for an insignificant gain.
Buy-To Close 150000 USDJPY at 82.945 (2011-04-17, 21:24 pm EST) for an insignificant gain.

I am now 100% in Cash and waiting for the next opportunity.

Stay Tuned,

Jeff
(2011-04-17, 23:19 pm EST)

2011-04-14th (Thurs)

Currently I have the following positions;
Short 150000 USDJPY with ACB of 83.227
Short 1700 contracts Nikkei 225 with ACB of 9553.34

USDJPY is currently at 83.321 (2011-04-14, 23:38 pm EST)
Nikkei 225 is currently at 9586.70 (2011-04-14, 23:38 pm EST)

The Nikkei 225 is on its last afternoon session of the week and so far no signs of intervention.  This means a busy Saturday and Sunday for me as I continue to research and update my Thesis to find facts to support or dispute myself.

USDJPY is continuing on a downtrend.  I see reasons for USD to rebound and again will use the weekend to research into it.  I may reverse my position to Long on Monday.

Tomorrow Friday's regular trading session will allow me to see if any party shows their hand.  I have much available margin and will be ready to ride along.

Stay Tuned.

Jeff
(2011-04-15, 00:20 am EST)

2011-04-13th (Wed)

Currently I have the following positions;
Short 150000 USDJPY with ACB of 83.227
Short 1700 contracts Nikkei 225 with ACB of 9553.34

USDJPY is currently at 83.526 (2011-04-14, 01:54 am EST)
Nikkei 225 is currently at 9647.40 (2011-04-14, 01:54 am EST)

I have not heard any updates on the nuclear situation in Japan, and scanning the individual index component stocks I judge today was only mild bargain hunting.

For Nikkei 225 for some strange reason I have stuck in my mind that a major gap-up will occur today or Friday, I do not know why I have this emotion.  Intellectually, I have not reduced my exposure, but has in fact added to my Short yesterday.  Clearly I am battling myself.

That was yesterday and today Nikkei 225 rose slightly.  As of this moment I am equal in confidence of its direction for the next 24-hours for my charts are not giving me a consensus.  In English this means I will not be surprised if it moves up or down tomorrow.

I document my own contradiction between my emotions and intellect, or lack of, so this will serve as a lesson for the future.

For USDJPY I continue to see USD weakening more and may continue for tomorrow and Friday.  I am very comfortable with my Short position.

Having closed out my Copper trade on 04/10th the metal has now appeared back on my radar screen.  Copper May 2011 is currently at 430.53 (2011-04-14, 02:18 am EST) yet I hesitate to open a new Long position with only Thursday and Friday left in the trading week.

For Wheat May 2011 currently at 752.75 (2011-04-14, 02:34 am EST) it is at a level where I would neither Long or Short.

When Wheat May 2011 was at 804.88 (2011-04-11, 01:42 am EST) I placed the following trades;
GTC Sell 10 contracts Wheat May 2011 at 820.00
GTC Sell 10 contracts Wheat May 2011 at 830.00
GTC Sell 10 contracts Wheat May 2011 at 840.00

Personally I would like Wheat to fall more so I can go Long, for it is more dangerous to Short Wheat.

I have no interest to Long or Short Gold and Silver and Crude at these levels.

Stay tuned.

Jeff
(2011-04-14, 02:43 am EST)

2011-04-12th (Tues)

Sell 200 Contracts Nikkei 225 at 9502.2 (2011-04-12, 19:48 pm EST) and Japan begins trading in 12 minutes.

Sell 200 Contracts Nikkei 225 at 9578.20 (2011-04-12, 20:10 pm EST)

This brings my positions to;
Short 150000 USDJPY with ACB of 83.227
Short 1700 contracts Nikkei 225 with ACB of 9553.34

USDJPY is currently at 83.909 (2011-04-12, 22:29 pm EST)
Nikkei 225 is currently at 9549.30 (2011-04-12, 22:29 pm EST) between sessions.

Goldman Sachs closing its Long CCCP Basket of Crude Cotton Copper Platinum, and 40% is WTI contracts.  I took no action and has no view on Crude, Copper, Gold, Silver.

USDJPY is currently at 84.003 (2011-04-13, 00:23 am EST)
Nikkei 225 is currently at 9588.00 (2011-04-13, 00:23 am EST)

So far this trading session is too quiet and to me is like the calm before the storm.

I am considering closing my USDJPY and Nikkei 225 trades even though I added to my position this evening, but so far multiple time frames of Candles are still in agreement on the downtrend, and this I know can change at a moments notice when the visible hand of intervention arrives to move the Nikkei 225 in one fell swoop.

If there is to be intervention I hope that will come on this Thursday or Friday so as to scare the Shorts away, that includes me and I hope to have exited by tomorrow.

Stay tuned,

Jeff
(2011-04-13, 00:30 am EST)

2011-04-11th (Mon)

CNBC reported Japanese Economics Minister said the quake impact could be bigger than initial expectations, also the Fukushima Dai-ichi nuclear power complex nuclear crisis level is being considered to be raised from a 5 to 7, and Chernobyl in 1986 was a 7 also.

About twenty hours ago I changed my positions based on new research done over the weekend and currently have the following positions;
Short 150000 USDJPY with ACB of 83.227
Short 1300 contracts Nikkei 225 with ACB of 9557.38

USDJPY is currently at 84.285 (2011-04-11, 21:53 pm EST)
Nikkei 225 is currently at 9567.60 (2011-04-11, 21:53 pm EST)

I am debating closing out both positions but so far multiple time frames of Candles are still in agreement on the downtrend, and this I know can change at a moments notice when the visible hand of intervention arrives to move the Nikkei 225 in one fell swoop.

If there is to be intervention I hope that will come on this Thursday or Friday so as to scare the Shorts away and let them think very clearly over the coming weekend if that is the correct strategy.

CNBC just reported on 2011-04-11, 10:02 pm EST that the nuclear crisis level has been raised to 7 on par with Chernobyl.  Estimate amount of radioactive material 10% of Chernobyl

I think markets may need time to react, or have market participants already anticipated and digested this information?
USDJPY is currently at 84.284 (2011-04-11, 22:03 pm EST)
Nikkei 225 is currently at 9559.30 (2011-04-11, 22:03 pm EST) between sessions.

Today is the day that I have seen the most analysts come on CNBC to downgrade their GDP expectations of Japan, and the main reason is the impact on industry-to-industry and business-to-business negative impact on the supply chain is and will not be clearly know until the formal fiscal quater ends, and in the subsequent quarters to come.

One thing seems to be clear from all the talk is two negative quarters of GDP are expected and that will put Japan into a text book definition of a recession.  Not that it was not already in a 10+ year recession before the tsunami event

Finally I see some reaction in the markets, after 13 minutes;
USDJPY is currently at 84.190 (2011-04-11, 22:16 pm EST)
Nikkei 225 is currently at 9538.20 (2011-04-11, 22:16 pm EST) between sessions.

Live press conference from Japan just started.

Stay Tuned.

Jeff
(2011-04-11, 22:31 pm EST)

2011-04-11th (Mon)

I ended last week with the following positions;

Long 50 contracts Copper May 2011 with ACB of 437.88
Short 100000 USDJPY with ACB of 82.458
Short 1300 contracts Nikkei 225 with ACB of 9557.38

Over the weekend I researched into opportunities and decided to shift my positions around;
Sell-To-Close 50 contracts Copper May 2011 at 450.73 for a profit (2011-04-10, 20:49 pm EST).
Short 50000 USDJPY at 84.766 (2011-04-10, 22:28 pm EST).

This leaves me with my current exposures;
Short 150000 USDJPY with ACB of 83.227
Short 1300 contracts Nikkei 225 with ACB of 9557.38

USDJPY is currently at 84.798 (2011-04-11, 01:33 am EST)
Nikkei 225 is currently at 9729.10 (2011-04-11, 01:23 am EST)

I am not seeing as much obvious intervention in Nikkei 225 through the 1-Min Candles and the index is slowly drifting down on what I assume is liquidation of investment accounts by some retail investors to hoard or redeem cash for spending.

If last Friday's low of 9393 is to be retested and hold then 9400 will be the short-term support that the Government has decided for now to draw the line in the sand.

I am seeking to exit both my Nikkei 225 and USDJPY trades as soon as breakeven or acceptable loss is reached for the volatility has decreased to the point that both instruments are not interesting enough to have meaningful intra-session trades.  I would instead like to focus my available margin on Wheat, WTI, Silver, Gold instead for all four are building up for big gaps.

Wheat May 2011 is currently at 804.88 (2011-04-11, 01:42 am EST) and I placed the following trades;
GTC Sell 10 contracts Wheat May 2011 at 820.00
GTC Sell 10 contracts Wheat May 2011 at 830.00
GTC Sell 10 contracts Wheat May 2011 at 840.00

My read is Resistance for Wheat May 2011 at 850 although I expect it to reverse to a down-trend at 830.  My margin will be stretched beyond 850.

Nikkei 225 is currently at 9718.2 (2011-04-11, 01:54 am EST) and 6 more minutes before closing.  I have appointments in the morning and so will get some rest and not wait to see market close.

USDJPY is currently at 84.767 (2011-04-11, 01:55 am EST) and some may argue I am taking on extra risk by increase my Short, and should have Longed instead even at this level.  I believe USD will weaken against the Yen at a faster rate.

Time will tell, and if there are no Traders on the other side of my trades then I will not be able to make a living, vice-versa.

Stay Tuned.

Jeff
(2011-04-11, 01:57 am EST)

2011-04-07th (Thurs)

The descent of Nikkei 225 from 9830 (2011-04-01) to 9393 (2011-04-07) was almost completely retraced today in one fell swoop in the last trading day of the week (2011-04-08).

Nikkei 225 is currently 9773.1 (2011-04-08, 01:54 am EST) and will end their week of trading in 6 mintues.

This morning Japan was hit by its largest aftershock of 7.1.  Fortunately the Fukushima Dai-ichi nuclear power complex where workers have been frantically trying to cool overheated reactors since they lost cooling systems on March 11th, 2011 reported no new abnormalities.

If you can... and I am not saying I could.. how could anyone possibly do so... put aside the emotional impact and focus purely on the data it is a fascinating intellectual exercise.  I have no doubt financial practitioners will be studying these March and April months to fine tune existing crisis management policies and procedures.

Examining the 1-Min Candles you can clearly see intervention represented by short bursts of Buying followed immediately by a gradual descent and this was repeated 4 times.  Imagine yanking the strings of a kite to make it rise quickly, and then it falls some; and then you yank the string again to make it rise quickly again, and then it falls some again.

What an elegant piece of empirical evidence of intervention with surgical precision.  My hats off to the central bankers for their decision to participate and protect their market.  We have seen this kind of determination before in the days immediately after March 11th.  In the next week we will have to keep a watchful eye to see which firms are executing such trades, although we have a good idea where the money is coming from, it will be note worthy to see when the ammunition will run out and how fast the Nikkei 225 will retrace back as the volatility subsides again.

All this will weaken the Yen against the USD, and hence the Thesis to Long USDJPY which I am on the opposite side of the trade.

Contra The Herd
I believe the USD printing presses are running faster, and continue to be hurt by my Short USDJPY position.  $300 Billion Yen is a drop in the bucket compared to $1.4 Trillion USD and some may argue with the accuracy of my numbers.  Although this is a weak Thesis, if I only believe in the weakening USD then I should Short USD against some other currency.  There is more but I prefer not to disclose.

As of this moment the fourth White House emergency budget meeting is over with no deal made, and President Obama postpones his trip to Indiana.  European Central Bankers are debating the Portugal situation.  I expect defaults as this is the only way for the debt to go away.  Kicking it down the road by refinancing will only extend the pain to the next generation and hurt them more.

Currently I have the following positions;
Long 50 contracts Copper May 2011 with ACB of 437.88
Short 100000 USDJPY with ACB of 82.458
Short 1300 contracts Nikkei 225 with ACB of 9557.38

Copper May 2011 is currently at 446.55 (2011-04-08, 02:23 am EST)
USDJPY is currently at 85.14 (2011-04-08, 02:23 am EST)
Nikkei 225 closed at 9762.80 (2011-04-08, 02:23 am EST)

Could have should have would have.

I stood my ground when Nikkei 225 was In The Money, and got kicked back into the red by today's spike.  Next time just ride the trend if you are really a day-trader dummy!  Now I am itching to increase my Short but I tell myself not to and instead to use tomorrow, Sat, Sun to research more.

I am standing my ground on Copper May 2011 currently 446.93 (2011-04-02, 02:35 am EST) and not taking gains off the table although recent price-action hints tomorrow Friday as possibly a large reversal day that can bring me back into the red.

I am considering turning around my USDJPY trade from Short to Long, but am standing my ground for reasons already mentioned earlier in the Contra The Herd paragraph of this report.

Stay Tuned.

Jeff
(2011-04-08, 02:40 am EST)

2011-04-06th (Wed)

During today's 2011-04-06th (Wed) regular trading session I searched for volatility but could not find any vehicle that showed indication that it would break out of its implied range.  Thus I opened no new positions.

I met with a wholesaler in the precious metals space and he was extremely bullish on the commodities not because he is in the business of representing those instruments, but because he had a legitimate long-term bullish macro-economic outlook.

I agree with him that the graph is long-term trending from bottom-left low to top-right high, but it is the finer resolution time-frame movements that I try to capture and profit from.  Some say it is skill, while the consistently correct will claim it is strong efficient market hypothesis at work.

I am a student of both disciplines and some will comment that is an oxymoron, I reply that when I am wrong I feel like the prefix is removed from the aforementioned figure of speech.

Currently I am in such a state of being for having the following positions;
Long 50 contracts Copper May 2011 with ACB of 437.88
Short 100000 USDJPY with ACB of 82.458
Short 1300 contracts Nikkei 225 with ACB of 9557.38

Copper May 2011 is currently at 435.30 (2011-04-07, 01:42 am EST)
USDJPY is currently at 85.172 (2011-04-07, 01:42 am EST)
Nikkei 225 is currently at 9600.80 (2011-04-07, 01:42 am EST)

All three prices have come closer to my range, yet all three are still out of the money.

Of special concern to me is Copper May 2011 currently 435.18 (2011-04-07, 01:44 am EST) as I examined the Daily Candles  there is recently price-action history to hint that the fast approaching Friday or next Monday may be a big reversal to the down side to bring me further out of the money.

To turn or not turn the trade around?  That is the question.  In typical risk-averse behaviour I am itching to Sell-To-Close right at my ACB 437.88 and surrender.  At this moment I feel frozen in time and need the counsel of my Trading Mentor who might simply say "we'll see".

Let me continue to munch on my toasted cinnamon raisin bagel and orange juice and listen to this analyst talk about USDJPY on CNBC.

Stay tuned.

Jeff
(2011-04-07, 01:53 am EST)

2011-04-05 (Tues)

Yesterday 2011-04-04 (Mon) I wrote nothing on my Blog yet has continued to research and reflect on my Thesis, and this morning 2011-04-06 (Wed) I continue to do so to find reasons to support and rebuke my own theories.

I hear more and more analysts coming on CNBC to talk postive the USDJPY trade not to mention former minister Mr. Yen from Japan predicted a bold move to 90.  USDJPY is currently at 85.312 (2011-04-06, 01:46 am EST) up from yesterday the pair has been on an up-trend since March 17th, 2011.

I recall last week 03/31st I asked LB regarding his view on USDJPY and he also agreed on the move up to 85/86 range.  Understanding LB's view may have changed during the days since I will not know if he has a position or his subsequent trades unless I see his blotter but I have a feeling he will continue riding the trend until it shows signs of reversal.

As for me I have been going back to charts as far as year 1986 and understand the March 2011 low is repeated only in year 1995 and was an abrupt V-shaped recovery and rally until year 1998 for the USDJPY to reach 147.  This is really scarely for me and yet I still remain in my position as the margin is holding, the loss is an irritation slightly distracting and a trickling drain of my mental capital.

My two other positions Copper May 2011, and Nikkei 225 has both moved in my favour and this has left me with a comfortable margin to consider opening a 4th position or adding to my existing three positions all of which are still out of the money.

Some may comment I should not throw good money after bad, that I should cut my losses and start fresh.  Well I have considered that over the weekend and in fact on last Friday I had almost sold everything to cash, and to start new positions on Monday.  However I decided not to be emotional but instead spend the weekend researching instead.

Thus to this moment I still have all three positions running unchanged, and my account equity has risen 10% from Friday to this moment on Wed morning simply because the volatility has subsided and prices have come back to moderate levels.

Currently I have the following positions;
Long 50 contracts Copper May 2011 with ACB of 437.88
Short 100000 USDJPY with ACB of 82.458
Short 1300 contracts Nikkei 225 with ACB of 9557.38

Copper May 2011 is currently at 431.03 (2011-04-06, 02:10 am EST)
USDJPY is currently at 85.269 (2011-04-06, 02:10 am EST)
Nikkei 225 closed Wed trading at 9603.40 (2011-04-06, 02:11 am EST)

I went back and forth Silver May 2011 currently at 39.306 (2011-04-06, 02:13 am EST) and just could not bring myself to Long, yet I would not Short as I understand the crowd is always right and dare not run against the tide as I have already done so on USDJPY.

The Gold Silver ratio is far away from its historical ratio of 50, and my Candles have been running up almost daily like a rocket ship yet still linear at 45 degress.  Until the chart turns parabolic I should not fear an over-bought state, but this is just one indicator.  My other indicators already show short-term over-bought thus this is not a comfortable place to enter a trade.

If I were a fund manager what would I do?  Can I report again to my unit holders that our fund is not holding silver and gold?  How would my unit holders react, and will they pull money out of our fund if they learn I have zero exposure in gold and silver?  Ultimately history will be the judge and by history I only refer to the next 90-days which will be the end of the 2nd quarter ending June 30th.  Rule-Number-One is not to loose client's money, and so for now I will not force myself to enter any Gold or Silver positions because I am really not comfortable with both trades at least this morning.

Crude May 2011 is currently at 108.145 (2011-04-06, 02:29 am EST) and I kick myself now for closing out my positions at 104.95 on March 22nd, 2011.

Yet to be fair to myself I reviewed my trade blotter and stand by my collective reasons for doing so at the time as there were other issues to consider.  Like any expired relationships I court Futures and when the trade is over it should no longer leave a taste in my mouth only the lessons learnt and a better trader going forward.

Wheat May 2011 is currently at 787.75 (2011-04-06, 2:37 am EST) and it has courted 796.63 on 2011-04-05, 05:20 am EST.  I am still itching to Short, and have decided not to open any positions until I have rid myself of the mentor anchor that I should only Short and not Long this commodity.  Best so to leave it alone for now for I have no need to prove anything to myself.

This entry is getting too long and distracting and so I shall return full-time to my screens, after I enjoy a bowl of tasty Tomato soup with chunks of chicken meat and onions.  Yes I have modified the recipe by adding chicken and onions which I cut under water to avoid the tears.

Stay tuned.

Jeff
(2011-04-06, 02:41 am EST)

2011-04-03rd (Sun)

Just came back from a real estate investment club meeting.

Currently I have the following positions;
Long 50 contracts Copper May 2011 with ACB of 437.88
Short 100000 USDJPY with ACB of 82.458
Short 1300 contracts Nikkei 225 with ACB of 9557.38

Copper May 2011 is currently at 426.05 (2011-04-03, 18:23 pm EST)
USDJPY is currently at 84.33 (2011-04-03, 18:24 pm EST)
Nikkei 225 closed the week at 9807.06 (2011-04-03, 18:24 pm EST)

For USDJPY last Friday 04/01st, the 200-Day MA was crossed at 83.60 and I did not Stop Loss my position because Daily MACD, RSI, Stochastic were all near the peaks.  I know all three indicators can continue to peak and even a turn does not mean USDJPY will fall but instead can continue climbing as other desks pile on the Long Trade.  This is really not the time to be Short USDJPY and I am fighting my own feelings to cut the trade loose at a loss.  P/L Statements do not lie and I am a complete fool on this Trade.

Japan needs to borrow $300Billion for their reconstruction and the Ministry of Finance and the BOJ have absolutely no choice but to continue with aggressively easier monetary policies to stimulate the Japanese economy by selling bonds into the market with BOJ as buyer of last resort.  When I entered my Long USDJPY trade there was talk of massive repatriation of the Yen which theoretically should strenghten it, but instead we have seen the Yen weaken.  Apparently the amount of repatriated Yen is not enough to strengthen the currency.  So the case is strong that the Yen will continue to weaken indefinitely, and as the USD temporarily strenghten, the combined effect is for USDJPY to rise and hence I will continue to loose money on my Short USDJPY trade.

So why have a still not cut my losses?  Stupidity, and relying entirely on technicals which in a room full of CMTs almost all would be Long this pair at this point because of the 200-Day MA break.  Currently USDJPY is falling intra-day back to 84.20 (2011-04-03, 18:56 pm EST) and I need to see if it bounces off 83.60 or crosses down below.  My saving grace will be the weakening of the USD but there is weak evidence of that happening in the near future.

So why have I still not cut my losses?  The best answer I can give is because I still have the margin the ride it out, technicals, and USD to weaken.  Very weak Thesis given today's knowledge and evidence.

China's Minmetals revealed a $6.5 Billion bid for Canadian copper miner Equinox

Stay Tuned.

Jeff
(2011-04-03, 19:03 pm EST)

2011-03-31

I was at LB's seminar tonight and it was entertaining and educational as usual.  He had an earlier session for existing clients on the 2nd floor followed by the general public session on the ground floor.  The room was filled with two types of people; older folks whom I think must be his existing clients, and a younger and more ethnically diverse crowd and I would be one of those.  LB started off with his personal story, threw in some interesting personal experience stories, some interesting business and career experience stories, and it was all very personal and approachable.  I have always enjoyed watching his TV show as well as seen him speak in public a few times and I still admire and have a lot of respect for his knowledge and experience he brings to the industry through his self-study, hard work, and value-added to his clients.  One member of the audience did ask LB for his portfolio results in 2008, 2009, 2010, and LB gave a decent answer although unless LB was being extremely humble, he left me with the impression our firm did far better than him in 2008, 2009.  For 2010 I am not sure, for you cannot tell until you look at the actual numbers, so I could be wrong in speculation what and how his clients made out.

I agree with LB's point that most bank and fund company managers may not have the highest incentive to outperform or strive for alpha, although there are some who do.  Depending on their compensation plan it may be the case some who run money prefer not to err and be fired, than to stick their necks out and take the riskier plays that can achieve a superior return.  Simply slightly out-perform whatever set benchmark to their fund by a small 50 bps and that will ensure their annual performance bonus.

Currently I have the following positions;
Long 50 contracts Copper May 2011 with ACB of 437.88
Short 100000 USDJPY with ACB of 82.458
Short 1300 contracts Nikkei 225 with ACB of 9557.38

Copper May 2011 is currently at 425.50 (2011-04-01, 04:37 am EST)
USDJPY is currently at 83.701 (2011-04-01, 04:37 am EST)
Nikkei 225 closed the week at 9712.8 (2011-04-01, 04:38 am EST)

No action required I stand firm on all three Thesis.  Although I did ask LB earlier about USDJPY he is of the opinion one should be Long and not Short because USD is poised for a temporary strengthening aginst the Yen and so far the markets are proving LB to be right, hats off to LB.  However, I am not taking my trade off.

I am entirely wrong on Wheat for the stock-pile numbers were released this afternoon and were extremely low, Wheat opened Limit-Up to 771.75.  Currently Wheat May 2011 is 760.25 (2011-04-01, 04:47 am EST).  Itching to Short, but no available margin.

Tomorrow Fri 04/01st I am at an all day conference with no access to my trading platform, this is not a good practice especially with three losing positions running.  I thought of not going to the conference but I have promised people I would be there to help out and it is important I honour my word to myself and to them.

Stay Tuned for Sunday night's commentary then.  Get some rest guys.

Jeff
(2011-04-01, 04:54 am EST)