“Throughout all my years of investing, I’ve found that the big money was never made in the buying or the selling. The big money was made in the waiting.” Jesse Livermore.

I like this quote because it sums up my current trading philosophy. I unwound my -2 FTSE Sell on April futures with no loss (or profit). Since then I have added to my bullish stance and now have 8 Euro worth of sell positions on the FTSE. The positions are down considerably but I took out FTSE September futures so I have plenty of time to wait. Above 6000 I will sell again to complete my strategy of 10 Sell on the FTSE. As the FTSE has failed to break 6015 I can’t see a prolonged run happening but a run to 6140 or so is a strong possibility. I will be waiting for a retracement to 5700.

The title of the post is from a song that was in the film “The Money Pit” and it sums up my trading strategy. It seems I’m not alone in shorting the market. After reading a sleuth of articles this morning I feel more reassured that I’m not the only trader with delusional tendencies. How can the FTSE rise by 8% in a few days without there being a large level of suspicion? I mean the concerted effort to prevent a housing collapse is admirable but this is part of a bubble burst and you need to let it work its way through.

With over 8,000 smaller regional US banks reporting in the next few weeks I don’t think the action is over. Far from it in fact I believe this is only the kick off. Firstly even if banks stay solvent with rising unemployment, rising interest rates and less potential for income how are their collective balance sheets going to look when year end earnings come in? And if the earnings are bad why buy them why not opt for another industry that will out perform like tech. However if rising unemployment + interest rates + equity loss + confidence loss + dollar loss affect the consumer how will tech stocks fair. Will you be more reluctant to upgrade your iPod or is the one you have fine. My assertion is that next year results will be abysmal.

In my own life as soaring food prices coupled with increased charges in every amenity possible make me tighten my spending. The excesses we live with need to ease and the norm needs to be re-established. These things take time and whilst there may be no deep recession a gradual purging of the system could be harder to withstand like a slow lingering infection.

I have two shorts at the moment one for April futures which I am a little concerned with as it lapses April 18th and looking at current market strength that may be too soon. I’m also looking to short again at 6000 although the 6100 seems to be the next resistance point. If concerted action by governments and banks fails there could be a sell off and if it succeeds there could be a lot of profit taking in celebration. Either way I’m looking at the rally to fizzle out at around 6100 to 6200 where I will be increasing my sell positions.

Tags: RegionalUS banks, FTSE, iPod

What the hell was that? My FTSE short was ticking up nicely when I headed off to work after bad news from UBS, Deutsche Bank and American bank Willit Fullya. UBS announced that is was writing down $19 billion, the chairman would also step down and it needed to raise $15 billion which caused an initial drop of 2%. By the time I got to work the FTSE was in rally mode and now stands at 5760. Is there something I should know?

Basically from what I can figure out the general view seems to be that traders are happy that (1) The bank managed to raise the $15 billion capital so quickly from three other banks and (2) That the banks were coming clean with write downs so happy days are here again.

To me this really smacks of a bear trap and I won’t be offloading my shorts and should the FTSE get near the 5800 mark I will be shorting again all the way up. The only good news was German spending dropping back which caused the Euro to drop in value. Gold is also back around the $900 mark and Oil is tempting the $100 a barrel.

However taking another view today is April the first so maybe this is all some big joke and the FTSE is actually trading at 5500. Who knows!