Daily Briefing 100508

1.  Review.

I said “I would expect risk on remaining low for the next week. If Greece aid package will be as expected we will see a EURUSD rally to resistance 1.340/1.345 area, where there could be selling pressure again. Low support is 1.320/1.325 area. AUD cash rate I expected rising 0.25 bps and this will cause a “sell the fact”. Important unemployment claims will give support to the recovery and the USD, that now is view as growth currency”. What can I say now? I was expecting a normal market and I tried to get advantage of JPY strength buying the dips on USDJPY and AUDJPY, until they crashed.
Trades
Lot of trades in panic mode, some of them with no much sense. I hedged almost everything.

2.  Analysis.

"Fundamental analysis"
Fundamental analysis data from US are not so bad, pointing to a support for the recovery. Some issues as China restricting credit, EZ sovereign debt increasing,) would lead to a pause in the recovery. Maybe easy money with low interest rate has been made and risky assets are going to worsen. EZ summit will have a big impact on risk sentiment: BCE said he will everything to sustain the euro.

"Technical analysis"
Last Thursday move broke every kind of support and left market nervous sing on TA view . EUR COT short are again at the historical lows (-103k), USD long are decreasing (+25k), JPY short are increasing (-65k), despite yen gains and but still at historical lows. USDJPY hit 88 level. US futures were heavily sold off. AUD long sharply decreased

"Market dynamics".
I would expect risk off remaining low for the next weeks. I think EZ moves will be not convincing the markets and after a small rally EUR will break 1.25 low. I think there is more downside for risk assets even if fundamentals for US, CAD and AUD are good (some indicator will point to a pause anyway).

I will expect a short risk asset rally where I close some risk asset exposure-

Median grid
EURUSD GRID 1.2700 - 1.3100, short bias
USDJPY GRID 88.00-92.00, neutral bias
AUDJPY GRID 78.00-86.00, short bias, maybe a grid adjustment
Basically still a risk-off bias

Prices
US up at 1107, (Q3)
GOLD at 1207 (Q4+)
Crude 75.37
EURUSD 1.2745 (M)
USDJPY 91.25 (Q1)

3.  Plan
Add new trades: I will try to work out loss positions; I will expect to close them with a loss (JPY short) in a rally before changing bias to JPY long and risk off.

EURUSD
I will enter short on the yob level (1.28) for a quick B&B and I will hedge on a couple of level up (-100 pips). I will wait then for a dip to enter a short B&B again at 1.348.
Comment:< >

USDJPY
I will work put to minimize loss for current long
Comment:< >

AUDJPY
I will work put to minimize loss for current long
Comment:< >

EURNOK
I will work put to minimize loss for current long
Comment:< >

4.  Trades
4.1 open trades, their type & their value:

3 Open 06-mag-10 EURUSD S 1.2617 Q1- 1:1 B&B 1.2754 -137.0000 -108.583657
2 Open 13-apr-10 USDJPY L 93.2400 Q3 1:1 B&B 94.0000 76.0000 70.8624
6 Open 05-mag-10 USDJPY L 93.2400 Q2 1:1 B&B 91.5700 -167.0000 -155.7108
7 Open 05-mag-10 USDJPY L 94.5900 Q2 1:1 B&B 91.5700 -302.0000 -285.6618
11 Open 06-mag-10 USDJPY L 93.8600 Q3 1:1 Panic 90.0700 -379.0000 -355.7294
13 Open 07-mag-10 USDJPY L 90.5200 Q2 1:1 B&B 91.5700 105.0000 95.046
14 Open 07-mag-10 USDJPY S 91.3600 Q1- 1:1 Hedge 91.5700 -21.0000 -19.1856
15 Open 07-mag-10 USDJPY S 91.0700 Q1- 1:1 Hedge 91.5700 -50.0000 -45.535
6 Open 04-mag-10 AUDJPY L 86.0500 Q4 1:1 B&B 81.3300 -472.0000 -406.156
7 Open 06-mag-10 AUDJPY L 85.1300 Q4 1:1 B&B 81.3300 -380.0000 -323.494
9 Open 07-mag-10 AUDJPY L 80.1300 Q2 1:1 Panic 81.3300 120.0000 96.156
11 Open 07-mag-10 AUDJPY S 80.6500 Q2 1:1 Panic 80.1700 48.0000 38.712
12 Open 07-mag-10 AUDJPY S 80.2100 Q1- 1:1 Panic 80.1700 4.0000 3.2084

4.2 Leverage

Aggregate position size expressed as a gearing ratio (Ex = 4:1)

Total positions per currency:
USDJPY +5,-2
EURUSD -1
AUDJPY +2,-2
Position
USDJPY 70, -155,-285,-355 (-19,-45)
EURUSD 0 (-108)
AUDJPY -478, -380, 120 (48,4)

4.3  Effect of planned trades

Account summary:
ActivTrades live account
Starting date: 1/4/2010
Starting capital: 1366
Line in the sand level:  750

1.  Account balance (Settled trades) and growth as a percentage.  (1426= 4%)
2.  Account equity (Including open positions) .  (1286= -5.8%)
3.  Account equity if planned trades go wrong
4.  Pip distance to line in the sand level.  5300, with gear 385