I was away the past two weeks and came back to trade Monday, and haven't managed to put on a single lot in the Euribor as of now. Volume has become so low that I wonder how the exchange will survive..ok taking a bit far there. But the only real rescue for us day traders is a pick up in inflation. The super easy central bank policy has taken all the volatility out of this market, leaving the only real play in Short Sterling.
The BoE meeting on Thursday will be interesting as it will provide insight into the thinking from the BoE at this stage. Manufacturing production unexpectedly came in weaker which gave cable a knock down from its highs in the high 1.71s. Any bullish activity could spur on Short sterling quite a bit, giving some much needed opportunities.
On the Equity front, we are finally seeing a bit of red here, as there has been 2 days of selling which is a very rare event in recent times. The question is how quickly will the dip buyers rush in and push this all the way back up. That has been the pattern of late, as the massive cash piles are being put to work on every down tick. Hopefully there is a bit more to come here which can then give some opportunities to go long. Shorting this market is tough but I have sold the ES futures by buying calls against it, and I will keep rolling those calls over until we get some kind of decent pullback. Risk is defined, so it will prevent me from being stopped out in the conventional way. A sell of although overdue, will happen when you least expect it, and will happen fast, so being in the position is the best way to capture it. Playing the VIX is another good way to give you some exposure to a sell off, with the very low levels, the downside is limited, making it a good risk/reward trade. I may be wrong, but playing these set ups with the risk/reward at the moment, makes it a good play.
The BoE meeting on Thursday will be interesting as it will provide insight into the thinking from the BoE at this stage. Manufacturing production unexpectedly came in weaker which gave cable a knock down from its highs in the high 1.71s. Any bullish activity could spur on Short sterling quite a bit, giving some much needed opportunities.
On the Equity front, we are finally seeing a bit of red here, as there has been 2 days of selling which is a very rare event in recent times. The question is how quickly will the dip buyers rush in and push this all the way back up. That has been the pattern of late, as the massive cash piles are being put to work on every down tick. Hopefully there is a bit more to come here which can then give some opportunities to go long. Shorting this market is tough but I have sold the ES futures by buying calls against it, and I will keep rolling those calls over until we get some kind of decent pullback. Risk is defined, so it will prevent me from being stopped out in the conventional way. A sell of although overdue, will happen when you least expect it, and will happen fast, so being in the position is the best way to capture it. Playing the VIX is another good way to give you some exposure to a sell off, with the very low levels, the downside is limited, making it a good risk/reward trade. I may be wrong, but playing these set ups with the risk/reward at the moment, makes it a good play.
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