Thursday, February 25, 2010

Trade 230 + 231 : divergence of sp500 and euro



Short 10 sp500 contracts @ 1101.9 and Long 10000 EURO/USD @ 1.3493 - slight overweight to the euro (accident - stupid mental maths sux; I actually wanted a slightly more short sp500 pair)

the EURO and the sp500 are usually closely correlated, but the daily charts are showing a massive divergence - due to the GREECE situation, but I believe the EURO is overcooked; and the current sp500 market rally makes for this a value trade.

I have yet to trade currencies, but this looks like a good spot to add more risk to my portfolio.

I think I might add some extra exposure overnight if the sp500 doesn't tank too hard.