Weekly review 7/3/2010

Greetings everyone,

As we do every week, we are going to review our trades over the last week and we will start our review with Forex trading.

FOREX

Trades this past week:

Results by technique:

EU	US
45	44
50	75
-42
-32
50
50
57
178	119

It was a good week with only 2 negative trades and a total gain of +297 Pips. Unfortunately, we could not execute our USA Morning Technique every day due to US macroeconomic data announcements, such as unemployment data, which presented a great risk for us with stops as small as 30 or 50 Pips. 

We also closed the month and the second quarter and here are our numbers

As you know, our biggest problem for the quarter has been our Drawdown for the European Morning Technique with the Gbp/Usd. This DD represents a loss of 323 Pips and, without this loss, we would have a gain to date of approximately 500 Pips. Fortunately, and as we have been commenting in the past weeks, our analysis indicates signs of a recovery.  Keep in mind that our techniques can have one DD per year and, in the case of the European Morning Technique, it has already passed and we are recovering.  We continue to have a profitable 2010, not as profitable as past years but we hope to improve our results in this second half of the year. If you look at our success rate for the first quarter of 2010, you’ll see we had 82 positive trades and 63 negative ones, closing up +540 Pips. Although the success rate is not high, we were still able to make gains without sustaining losses.

Unfortunately, this year is going slower than normal.  Short term manipulation and uncertainty in the markets as well as in the "real" economy aren’t helping.  Never-the-less, as soon as our ratio improves even slightly (this last week was a good example), our results will again be spectacular, a monthly average of around 1.000 Pips.  Of course, we always prioritize protecting capital and without assuming risks greater than the current ones.

Resumen FX 2010

EUR		US
GBP/USD	EUR/JPY	GBP/USD	EUR/JPY	CAD/JPY	OTHERS	DISCRETIONAL
-32	496	-207	460	151	60	50

FUTURES & STOCKS

Now we will review futures and stocks.

Remember what we mentioned in the last several reviews.  Let’s see what has happened after the last expirations of “US options”.  Remember we are referring to options and not futures, which are quarterly. 

What we see is that trends have been monthly as opposed to quarterly and that each month the forces that move the market are taking advantage of market movements through the expiration of monthly options.

We see more or less the following monthly activity:

• December-January : 45 points
• January -February : 90 points
• February-March : 90 points
• March-April : 55 points
• April -May : 140 points
• May -June : 0 points.

And this is the positioning for the expiration for July, 2010, for the Sp which happens to be the same as the one for June, exactly one month ago, with the same levels with no variation at all. Yesterday, the Sp Futures closed at 1014 so we can see they are clearly short for this expiration.  

JULY 2010 SP POSITION

RANGE	CONTRACTS
1070-1086	650 K
1086-1100	740 K
1100-1115	700 K

For the second quarter of 2010 for the MiniSP, we finished with a gain $925 per contract with 25 positive trades and 12 negative ones.  Unfortunately, the Evening Technique registered a loss for the quarter of -9.75 points which subtracted $487.5 from our gains.

As you can see, this quarter we were very cautious.  For the Emini, we normally execute about 100 operations and we have only executed 37 operations so far this quarter.  We are still making profits but we are trading with composure, which is important.

Now let’s review the Last Wave trade.  As of now, we have registered a 41.24% profit this year and, during the last few weeks, we have begun to see fluidity with our signals.

As you can see, from 2006 until 2008, the technique gave us extraordinary results, buoyed by the volume and powerful tendency in the market at that time.  Last year, we executed the technique a bit and this year we are making gains, little by little, but many stocks can only be traded for one day and others have difficulty following a trend which is exactly the opposite of what happened in prior years when the majority of stocks in the same session would make the target.