Wednesday, January 19, 2011

Trade 536 - adding to long AUD position

learning to add more longs on the breakout.

last night I had a pair trade,long aud and sp500 - short was stopped out. sp500 short was based on the citi results which were lower than expected and the jobs medical leave which was hitting aapl shares. However, the overall market seems to have shrugged off these issues in the majors, and the market seems v. bullish.

in australia, the aud has made a super quick turnaround in sentiment and I have capitalised - with 30,000 longs initially at .9945 then adding to the breakout with 30,000 of the 1 market - although I got in a tad late 1.002.
The intermarket themes are supporting the risk trade - gold is rebounding, yen is strengthening, oil is continually rising, euro also coming in strong. A test of the 1.02 high is v. likely - just a matter of whether I can hold onto the whole position.
Looks like the traders are looking at the flooding in Qld as stimulatory - and the price turnaround is supporting this for now. China data is still very strong given the current measures to slow down its inflation.

I have a stop at 1.00 and plan to ride at least half the position to 1.02.