Weekly review 6/27/2010

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:

This week, we operated a bit less than we normally do, mostly due the lack of tendency for forex which started about two days before the FED announce new interest rates on Wednesday, June 23^rd.  In addition, this past week something happened with a trade which was similar to an occurrence of the previous week.  We traded short for Eur/Jpy for the European Morning on Friday, the 25th and, after being up 25 Pips, the pair bounced up 64 Pips, just to our STOP.  We hit the stop by 3-4 Pips – which is ridiculous as that is the amount of the spread – only to later fall almost to our target or stop profit. Therefore, instead of making a gain of 50 or 10 Pips at the stop profit, we ended up losing 40 for the European Morning technique.

 In the end, we finished the week with a gain, which is what is really important after all.  Never-the-less, if the market improves a bit and we have a little more luck, we are sure we will achieve much better returns.  Remember that we have one trade open from Friday afternoon, long for EUR/JPY at 110.42. Target 111.22. Stop 109.77. This weekend, the G20 meets; therefore we may have a GAP when the market opens on Sunday.

FX 2010 Summary

EUR		US
GBP/USD	EUR/JPY	GBP/USD	EUR/JPY	CAD/JPY	OTHERS	DISCRETIONAL
-60	346	-207	341	151	60	50

FUTURES & STOCKS

Now we will review futures and stocks.  This past week we traded infrequently for the Sp, gaining 4 points ($200 per contract).  We would have traded more but, from our experience, the weeks before a Fed announcement are normally complicated as the market “normally” stop before a Fed intervention and, once the announcement has been made, we normally see odd activity like the following.

As of now, for the current quarter, for the MiniSP we have a gain of $925 per contract with 25 positive trades versus 12 negative ones.  Our Achilles’ heal has been the Evening Technique which has registered a loss of -9.75 points thus far this quarter, subtracting $487.50 from our other gains.

 As you can see, this quarter we are being 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.  The problem with this technique is that, right now, the stocks that are trending one day then stop completely over the following days and their original trend does not continue.  And stocks that have big falls one day recover the next day while those with tremendous gains one day, fall the next as we can see for the majority of stocks during the last several weeks.  This makes it impossible for us to string together series of interesting trades as we did in past years.

We developed the technique in 2005 for our Spanish-speaking service although our results are only summed up on our web page since 2006 as we applied this technique with a variation in 2005 and we have not computed strictly Last Wave results from that year in our statistics.

 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.

Have a great weekend.