Update for March 5 (written Tuesday evening).
Today was liquidation day - in a very large way, yet we are not too surprised given the parabolic nature of the markets in which we participated from the long side. Volatility has set in and we wish to reside on the sidelines after watching soybean oil limit up, and may cotton limit up days in a row. In summary:
Liquidations:
- Sold the long 3 units April mini-Gold at 965.60
- Sold the long 3 July sugar at 14.71
- Sold the long 2 May Cotton (2 units, 7929 and 81.90) at 8736, this position was "unlisted" here
- Sold the long March Euro Bund -another "unpublished" position
Remaining Positions:
1. Long December Eurodollar (GEZ9) – 3 units (9665, 9670, 9715.5). Currently at 9702.5
Signals:
There is a potential buy signal in the June Emini S&P and in the March Dow futures. These are good setups. The sell signal in Dec 2008 Eurodollar is against the trend and we will skip it.
Comments:
The markets reflect a lot of profit-taking or rushing to the exits yesterday and today in particular. We managed to make clean (early) exits from the quite profitable positions. The realized profits of yesterday and today compare favorably with the profits of January and February combined. We attribute this to the unusual nature of the markets, to the application of money management and trading strategies as per MTPredictor algorithms, and, of course, to common sense. After unexpected large profits, we feel that a humble and conservative wait-and-see approach to the markets is warranted without going to battle again with full gear. The mantra again is to remove profits from the account to put to good use in domestic projects and charitable causes.
We will nevertheless take heed of the potential buy signal in US equities tomorrow and have therefore covered our short position in the March Mini Hang Seng Index futures at 22800 just minutes before the morning close (lunch break) in HK.
The Short March Emini S&P strangle (1400 call, 1300 put) continues to erode to the current 20.85 points. Once the combined value reaches 1/4 of the collected premium, we intend to close out the position. This may happen yet this week...
This vacation is busier than I would have anticipated.
PRH
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