I had mentioned before that my exit point was 5500 on my FTSE shorts. Today the moment arrived and whilst the overwhelming desire to leave the positions open fuelled by greed was tempting and I did hesitate, I decided to try and stick to my plan this time.

The positions have been open for two months now and have netted me the tidy sum of 2700 Euro. I could have left part of the position open but my strong belief in a short term rally left me uneasy about the positions. My intermediate outlook is for a return above 5670 followed by a decline to 5300. At these levels I’m a bit sceptical about jumping back in but a FTSE JAN option for 3 Euro may be a gentle ease in.

So with an increase of 48% including any losses I’m mighty chuffed with my trades. If I can keep up the logical unemotional approach I could end my first year of trading quite happy.

My dip into AIB seems slightly premature at 11.00 Euro as the share is now trading at 9.70 Euro. I did state I expected it to fall as low as 8.00 Euro where I would continue to trade into my full allocation. That said I hadn’t expected it to trade down to that the week after I bought them. Sodds law.

On the plus side my FTSE trades are now yielding a 40% return on my total takings for the year which it’s too shoddy at all. After having the trade open for two months and being down by an equal amount I am happy I traded with the full force of my conviction. My exit for the trade is 5500 or as close to that as possible. From there I will place very cautions buy positions up to 5600 on FTSE year end futures.

On the economic front the mire seems to be widening and people seem to be facing the harsh reality of what lies ahead. In Ireland the slow realisation of the impending storm is getting a little more press coverage http://www.rte.ie/business/2008/0624/esri.html. If the ECB do proceed with the proposed rate hike which has a lot of merit from a EU stance Ireland will be in serious difficulty. The French consumer spending index increased today which gives Trichet more ammunition to use in his inflation arsenal. We are living in interesting times and the future is a by no means as clear cut as black and white. There are going to be some serious bumps ahead. Thank god for spread betting and short selling.

I have been a bit quite of late mainly due to the lack of movement in my account but everything kicked off this week. Equities have all moved lower and my four short positions on the FTSE which I scaled into are now running nicely into profit. I have moved all stop losses to break even and hopefully these have sufficient space to breath.

Over the past few weeks I have been reading various extreme views on where the FTSE will go from here. On the lower end of the scale one article stated the FTSE would pass the March 17th lows and trend down to 4000. Other views see a flat year ending but I personally think a 6000 finish is about right.

At the moment the downward momentum is gaining pace with stocks unable to hold gains and I’m waiting very patiently for the next big drop. That seems to be the major lesson I have slowly learned this year, its all about the waiting. I think an imminent retracement to 5350 is inevitable after trying the highs. Once these lows come I will be switching to buying small amounts and follow the trend back to 5700. Obviously I’m not too sure when this will happen but inflation, oil and commodities are all helping my case. Once the ECB hikes its interest rates I think a sell off will occur and US stocks will panic thinking the Fed strategy may be flawed. The perfect storm.

On banks I have eased my way into AIB at 11.00 for a small amount. Again the strategy is to increment the shares throughout the year till I have completed my total allocation. This is a three year minimum term proposal with five being my optimum get out. However should the share hit 14.00 I would sell and wait for the retracement? I expect AIB to hit 8.00 as a low and 14.00 as a high.

I have been following the banks and in particular Irish banks for some time now like most market observers. Recently however I have become more than interested in AIB who are trading today at a seven month low of 12.25. I have been interested in the stock for over a year and during the most turbulent times said I would enter at 12. It never reached those lows but looks like it could be heading that way now. As this is a long term three year trade I would look at shares not a spread bet. However even a long spread bet at this price could yield profits on a short term bounce back to 13.

Back to spread betting and my FTSE shorts are a lot healthier now. My procrastination has cost me a lot but this is my fist year of trading and I’m still in baby step mode. My goal still stands at a 10% profit for the year. I have no intention of increasing my shorts now as I lost my chance at 6300. My interim expectations are for the market to move between 5900 and 6000 before heading to the March lows in July/August.