Tuesday, July 14, 2009

Trade 27: MQG sold out market open

Yesterday WSJ published an article on how much better the earnings of Goldman Sachs was likely to be, thus leading to analyst upgrade as well as speculative rise in the US markets - the volumes were light however I did feel that my MQG position was at risk for a large risk, so I decided to close out this morning at 36.47 (sold at 35.9, loss $50.81).

I had an inkling that I should get some long for an intraday trade, but I didn't trade my conviction as I have only been trading range bound sessions all week and promptly saw the markets rise another 100 points, for like the largest gain in 6 weeks.

I now am starting to realise the importance of understanding how important it is to identify each session as range bound, or trending up or down. It really helps you decide what kind've of strategy to use depending on each condition.

Today ideally, you would work off the breakout levels overnight of 37.96 and try to accumulate at the 20DMA - whilst setting up an intial long trade straight off the bat. The hardest psychological barrier to going long at open is perhaps the 60 point opening gap from last session's close and seeing an obvious downtrending tick at the open. The pace of the uptrend was unforgiven for the timid - and today I played the role of a mouse to perfection.

Market Update

Overall a strong day that saw rising prices on the speculation of a spectacular earnings figure from goldman, however, I'm wondering how tonight's US session will turnout, given how all the action came from low volume and a significant amount of short covering.
I am suspicious that the market can see lower levels as the bounce we had seen, is just technical speculation at the whiff of good news.

On a global front, the Nikkei looks quite weak, as it hasn't followed the uptrend like the ASX and the UK, and the ASX really looks like it has overshot in giddiness - I will enjoy the downswing if tonight's US data on inflation and retail figures come in worse than expected.