Monday, August 8, 2011

sp500 gets downgraded, Markets Puking

Last week was possibly the beginning of a crazy bear move. I started the week thinking this would be a buy the dip opportunity, but I was starting to get stopped out in my long equity positions very quickly.

I closed off my positions in ANZ, BHP, WPL all which were positioning for a good earnings season and continued strength in the markets.

However, the current macro climate has offered some re-thinking of the long bias as markets are now taking a strong bear impulse smashing all index support lines on the sp500.

Last week I shorted 3 contracts of AUD/USD the minute RBA kept rates on hold at 1.095, however my biggest mistake last week was not holding onto these shorts and closed them near 1.08 as both a portfolio hedge, as the markets tanked 5% on Thursday night. The AUD/USD is now a sessions later at 1.04.

If I had held onto the AUD/USD shorts, my overall losses would've been about 75% less.

The buying opportunity gets even more attractive today, there is a g7 meeting tonight and historically g7 meetings have been catalysts for market inflection points. We will have to wait and see.