Thursday, 24 February 2011

Selling half SWHC

Sold half at 3.97, to lock in some profit.

Stock Buy: BIDU

I initiated a long position in Baidu today going long at 117.55. It was not a great entry but looking for the longer term bounce as this does seem very bullish and the 5 day decline I believe has presented a good opportunity. Support is in the 110 area so if this breaks then I will be looking to bail.

Entry: 117.55
Target: 140
Stop: 108

Portfolio

Wednesday, 23 February 2011

Euribor spreads up and down

Yesterday was a very difficult day trading the Euribors, with all kinds of action happening along the curve. After being long the mar12-jun12 contracts and seeing that drift lower on monday I was looking for any decent exit yesterday which I managed to get at 17, the front end remained bid throughout the day and traded as high as 18 although it was hard to get. Seeing weakness in the back end I went long dec12-mar13, at 10.5s, that then went to 10s then 9.5s, luckily I managed to take a small loss by getting out 10s as it is now trading 9s. So it was a case of spreads up in the front and down at the back, difficult to trade, as usually you don't have such diversion along the curve.
A lot of this is due to continued ECB comments, warning on inflation, and if we hear“Strong vigilance”, “Heightened alertness”.
Either of these phrases at Thursday’s ECB press conference (which
starts at 1.30pm London time next thrusday) then brace yourself for an early interest rate rise. The reality is you won’t — the earliest this language might appear is July, reckons
Nick Matthews, senior European economist at Royal Bank of Scotland.But given the rise in eurozone inflation and the hawkish noises from President
Jean-Claude Trichet, ECB language is back in focus.

Tuesday, 22 February 2011

Portfolio update

Finally we have a pullback in these equities, with the DOW down triple digits as I write. With the on going middle east tensions I would expect further market weakness over the coming weeks, so hopefully this will present some good opportunities to get into some stocks.
The current portfolio seems to be going ok, with the drop in AGCO being hedged with the short in NTCT. SWHC remains resolute, and is nearing the 4 buck level. I would be tempted to take profits if it reaches there. Right now I remain on the sidelines.

Wednesday, 16 February 2011

BoE King says decision on rates hasn't been decided yet

Today we had the quarterly inflation report from the Bank of England, and stated that there has been no decision on interest rates yet, this lead to a spike up in Gilts and short sterling, and leaved to a 100pip sell off in cable. Short sterling spreads stayed relatively flat, with a small fall in spreads in the front end. Its one of those all up days for stocks and bonds, as Bonds making highs as well as stocks, with the long end getting most of the action as far as the yield curve goes.

Below is an extract from bloomberg on the inflation report;
Bank of England Governor Mervyn King said policy makers haven’t preannounced an interest-rate increase and may need to keep borrowing costs at a record low to aid a recovery that is “unlikely to be smooth.”

“Some people are running ahead of themselves in saying that we are preannouncing, or we’re laying the ground, for a rate rise,” King told reporters in London today. “That decision has not been taken and it won’t be taken until we get to the next meeting, or the following meeting” and “it may be many quarters before we do anything.”

The bank today forecast inflation will quicken from a two- year high and peak at about 4.4 percent before easing to its 2 percent target by the middle of 2012, while the growth outlook has worsened. Britain is about to endure a budget squeeze that will eliminate 330,000 jobs at a time when unemployment is already rising in the aftermath of the recession, a situation that has divided the bank’s policy makers.

Tuesday, 15 February 2011

Stock Sell: NTCT

I initiated a short position in NTCT today. I feel that this may be due for a pull-back, and after the run up of the 23 trend line, I think we could head back down there again. I will be playing this fairly tight if it doesn't pan out that way, with a stop above 26. Also analysts are very bullish on this stock with 8 strong buys.

Entry: 25.23
Target:22
Stop 26.50

PORTFOLIO

Close position: QLGC

I decided to close my position in QLGC today since it hasn't really done what I was hoping it would do so closed out pretty much break even.
Summary of trade:
Entry: 18.14
Exit: 18.15

Net profit 0.60c

Friday, 11 February 2011

Mubarak steps down equities continue there march higher

As equities march higher again, it seems that any pullback seems to be met by persistent buying, and yet I find it hard to pull the trigger on any other stock positions, as I'm just convinced that there will be better opportunities by waiting a bit. I'm looking at PSUN right now, looks like a lovely reversal pattern, after coming off heavily in the last 2 months. I would have pulled the trigger but the lofty level of the market is holding me back, and I might regret it but have decided against it.
Next week we have big news out of the UK with, inflation readings and the quarterly inflation report. These two will be huge in determining whether we will be raising rates in the UK sooner rather then later. I will be trading short sterling over this week looking to go long spreads if inflation continues to rise. But if the CPI reading falls a bit, I think we will have quite a drop in spread prices.
Have a nice weekend.

Tuesday, 8 February 2011

Stock sell: Closing BIG

Well the news that Big Lots wants to put its self up for sale lead to a surge in the stock price.
It went over 40s, but I decided to get out at 39, this morning. It could go higher if anything materialises, but its gone past my target so on to something else.

Closed position on BIG,
Entry:33.90
Exit: 39.00
Profit $151

Monday, 7 February 2011

Stock buy: BIG

Well the theme of the day seems to be very bullish, with strong showing by all indicies. For that reason I initiated a buy in BIG Lots (BIG). This was in a down trend and has reversed its trend in 2011. We have crossed above 200 day moving average and broken out of the bollinger bands.
I'm looking for this to hit around 37, but ofcourse if we have a pullback in the market overall, it may struggle.

Entry: 33.90
Target:37.00
Stop: 30.00

PORTFOLIO

Stock Portfolio run down

Since I started my live portfolio on this blog, my picks have seen some wild swings. Not the best entry points on some of the picks, they are holding steady as of now. I feel like we are at very lofty levels with these stocks, but reluctant to really do any short positions as I have been burned on my last couple. At the same time I find it hard to really commit to any long holdings as risk to reward isn't great right now. We have many stocks at lofty 52 week highs, like TJX which was on my radar but risk/reward isn't there.
So in the mean time, will stay pat unless any good opps come forward. Despite the equity rally I believe we will have a substantial correction, but while there is no evidence of it yet, I remain long.

Friday, 4 February 2011

Non farm payroll a mixed bag

Today's number was a bit of a joke, we had headline non farm payrolls come out 110k worse then expected yet we have a improvement in the unemployment rate from 9.5% to 9%. Clearly there has been a shrinkage in the workforce, but I have to wonder whether there is some government manipulation in these figures, as to not upset the mood of the stock markets.
More interesting is from a little observed data metric: that showing the number of people who are not in the labor force, but who want a job now. The number just hit 6,643K, a jump of 431K from December, and the highest number in history. These are people that would send the unemployment rate to about 12% if they were in the labor force. Nothing else needs to be said.
In terms of trading action, many other traders would agree as we had some horrendous reversals in bonds on the number, as we initially popped up higher then reversed hard as traders digested the unemployment number and pushed the market the other way. I was trading the bobl.
I went long on the Bobl, managed to eke out a small gain before the reversal happened.
Short sterling spreads were racing higher on the number, where as euribor spreads were a bit more in line, with the back end coming off.
I think its becoming a lot harder for clear money making opportunities on non farm, as there seems to be too many components that have an effect on the price action.
Looking to next week we have a lighter week in terms of data, it looks like we still have more downside to go in bonds as rate hikes becoming more priced in.

Tuesday, 1 February 2011

Stock buy: SWHC

I initiated a long position in SWHC today, the shares have been hit of late and Im playing the bounce. Since its share price is low playing it smaller then normal. Hopefully if we have a bit of a pullback this wont be hit as hard as others which are due for some profit taking.

Entry:3.55
target:4.20
Stop: 3.00

Date long/short ticker shares entry
18/01/2011 l qlgc 60 18.14
21/01/2011 l agco 20 51.24
01/02/2010 l swhc 200 3.56

Bonds sell off on strong ISM data

Bonds have fallen off a cliff, Egypt's decline is totally gone.
The NASDAQ is up 1.8%. The Dow is up triple digits reclaiming 12000 again
And the euro is above 1.38 having been under 1.30 a few weeks back.
Nothing you can really do but to go with the trend. Despite what people think, you have to trade what you see, until otherwise.
A strong ISM manufacturing reading above 60 really pushed the market, as well as a above 60 reading for the UK manufacturing sector. We had a nice 50 pip mover in cable on that number, and a widening of spreads in short sterling as would be expected.
We have ADP to look forward to tomorrow, but I don't know how credible this number will be given the wide discrepancies with the actual, non farm number, which will be released on Friday. We shall see!

Short Sterling spreads nudge higher on hawkish Fed; Walmart blowout

As most must know trading Short Sterling is a bit of a bore, and has been for a while. Having managed to get out of my 2 month hold before,...