Trade DiaryAt the moment I feel like I’m one of a handful of people with the wrong glasses on. Equities rebound and put in recent highs while green shoots (I hate that metaphor) are sprouting up everywhere. Summer must definitely be on the way. However my personal feeling is that with excessive rain little green shoots die and there are considerable showers building. I think the current rally was to be somewhat expected but the strength of it is impressive considering we have still to resolve the underlying problems and lets not mention the piggy wiggies.
Next weeks results from the Bank Stress tests may be an important turning point. While I’m not expecting new lows and believe like most that we have put in the lows I do think we will march back down below the 4000 mark on the FTSE 100 (4800 is my guesstimate). At the moment all bad news is being bought into but with the banking results so close I wonder just how much room this rally has to go.
Position: Still short.
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Hey Chris – how many shorts you got open then 4 at 5euro a piece?
Looks to me like the market is having a big short squeeze, been long
Barclays for the ride, bears are getting flamed.
As usual, market movement has nothing to do with fundamentals. Am expecting a bit more positivity into next month and then the old phrase
“Sell in May and stay away” springs to mind
good luck
Jez
Yeah loads of shorts but they are September contracts so I’m not panicking yet. I am expecting a return below 4000 but 4400 could be possible too. Wait and see.
You still got 20 euro short on the FTSE? Surely not!
It’s looking to me like all this market rally reflects a concerted effort by the US and UK governments to convince foreign well captialised countries like China to keep hold of their treasuries and buy more.
I may be a little paranoid, but I have noticed the way the UK media (i.e., BBC)
seems to have changed its tune over recent weeks, coinciding with the governments rather poor recent result trying to selling sterling treasury notes (in fact yields fell after the initial announcement of QA – buying treasuries) and have since been rising back to where they were.
Meaning – the only buyer in this market is the government – BAD news for the UK government attempts to finance the huge debt obligation. So it wouldn’t surprise me if some one (good old Mandie himself?) has said essentially STOP TALKING DOWN our economy as it’s scaring away foreign investors….
The same story is essentially true in the US – meaning, forget listening to the media who are likely under huge political pressure. That doesn’t stop the masses who are listening though…. and so a huge short squeeze happens.
You still got a stop loss at 4500? Will that wipe you out?
Hey Jez, Yeah a big mess from my point of view but I’m not expecting a rally over 4,640 and have September contracts so for the moment I’m biding my time and still firmly of the view this is a bear market rally. I completly agree with your views and think the wider market is discovering this too.
Interesting and informative post, thanks for share!