I’m just back from holidays and in the week I came back moved house. In my mind this was a simple process but turned into something larger. As a result of the move I have no TV or Internet access and these things always take time to sort out. So instead of participating I’m hanging back and only occasionally glancing at the markets.

After my holiday I did open a sell trade at 4014 on the FTSE 100 but closed out for a nice 550 Euro profit. Since then I haven’t had the opportunity to trade and looks like it could be another two weeks.

Happy trading.

It’s been a hard few weeks and I haven’t been posting as frequently. At the moment I’m busy trying to move, go on holidays and dabble in a bit of trading. In short I have been spreading myself a bit thin. On the market front it has been a whirlwind ride downwards for most equities and indices. In fact nothing has been moving upwards and the calm downward momentum was starting to have me concerned.

A few weeks ago I opened a silly long on the FTSE 100 for +2.50. This then went the wrong way and I had ample opportunities to close out the position but didn’t. The loss grew and grew with the expiry date nearing but finally I have closed it for a loss. I took some calculated risks and have been playing the upside oversold card for a few days now. Yesterday I cashed out and took my profits and closed my loss. I am now neutral.

Have Equities Bottomed Out?
My suspicion is this is a good time to sell the rally but I’m holding back my itchy fingers for a while. I don’t like open positions on holiday so I think I personally will be staying neutral. I think a few days of subtle moves higher will be wiped out with new lows before the end of the month. April will start off bad and a return to range bound markets for a period is to be expected. As predicted before I think we could test 3200 on the FTSE and so I may start scaling into a short after this rally fizzles out.

On equities I am starting to look at certain sectors and have bought two stocks recently. These are Microsoft (MSFT) and Coca Cola (KO) which were each at their 52 week lows and are part of my five year view. I have been following a list of about 40 stocks for 12 months now and these entered a price I consider reasonable. These are large cap stocks with good performance and I am confidant in their sustainability. They maybe seen as safe stocks but a rounded portfolio is more attractive to me with consistent growth rather than a riskier quick bet. While I accept they may fall further I am happy with the price and hope to continue to pick up stocks over the next six to eight months.

I hope everyone is doing well and not suffering too many war wounds. Happy trading!

The continuing saga of the Irish banking system took another twist on Friday as tracker funds were mandated to sell the Irish banks as they fell off the Morgan Stanley Composite Index. Allied Irish Bank shares were down 20% at 0.38 cents and Bank Of Ireland were down 30% at 0.19 cents.

Allied Irish Banks report their results tomorrow and it will be interesting to see where the share price ends up. At this stage I wonder what Eugene Sheehy could possibly do or say to pull these shares back from the brink.

At present I’m re-evaluating my trading position. We have had heavy selling and I think a bounce is imminent. This does not in any way change my long term bearish view and I expect new lows but not yet.

I’m now looking to buy FTSE 100 on a short term at the November lows. I think this will provide good support. This will be quick in and out. On gold I’m thinking of going short at $1030 should we reach that. I think the recent jump in gold is valid but once equities get a shot in the arm gold will lose its lustre.

Entry: 3600 – 3800 FTSE (June Contracts)
Exit: 4000
Stop (Mental): 3500
Point Size: 10 Euro ( 2.5 x 4)
Estimated Return: 2000

Nearly 120,000 people marched yesterday in Dublin. Many people were protesting at the levy while others voiced their dissatisfaction with the government. Whatever the personal reason for protesting what inspires me is that Irish people have once again regained their voice.

For many years during the economic boom apathy, singularity and disinterest in others was as popular as new cars and second houses. Now with less and more job losses the middle class have bonded in unity to display its outrage at a government that is out of touch and out of favour with its citizens.

I’m encouraged that maybe after we get out of this recession we may have the fragments of what was once an amazing and welcoming country. Whilst most of the tradition has been replaced with apartments and chique pubs the underlying foundations are still there.

When all is said and done I’m optimistic that we will emerge stronger, bigger and hopefully more honest and less focused on the riches that are now our ruin. Nouveau riche no matter where or whom is always vulgar as the driving emotion is exhibitionism.

Now that we have gone through that phase maybe we can focus on becoming an understanding, compassionate and caring nation like the decades of welcoming Irish that preceded us. Saturday’s march is hopefully the early sign of a developing nation that now wants to regain control after years of corruption and mismanagement.

I for one am very optimistic.

With volume low today on the Dow the push lower was more a case of no buyers rather that lots of sellers. The panic selling that was expected never occurred and the Dow was simply pushed lower on weak volume.

The FTSE held well at 4000 and briefly scouted below before coming back to settle at 4025. Tomorrow Obama outlines his housing solution and we will see how markets react. I’m confident of a return to 4200 on the FTSE as I think this current drop lacks the real conviction to drive us lower. It’s going to be a testing week but unless someone releases dire news I see us heading back into the trading range.

Last night was another example of take profits when you can. I am certain that the FTSE 100 will break the 4000 barrier and have been building up a substantial short on this expectation. Last night I went from +500 Euro to a loss of -1000 in minutes. My reasoning for not taking profits was because I have a nasty habit of ill timed exits. Waiting till my exit point has come was one of my new years resolutions and so I’m happy I’m doing it. On the other hand I would be happier with 500 quid in my pocket.

The reason for the rapid market move was the government’s announcement to subsidise troubled homeowners mortgages. This caused the S&P to do a nasty U turn and jump 3% from heavy losses. The DOW came back from -200 to break even. Today’s session will tell if the bulls have legs but as we are maintaining the trading range it will be hard to see us break this unless we get further announcements.

I will be incrementally adding to my existing short and this rally could reach 4400 before it’s finished. I’m happy with my current position and because I have this though through I believe its a good trade. My stop is at 4700 and is very wide. As I increase my position I will be taking small profits on those shorts opened at lower levels, this should mean I can get better entry point but maintain the position size.

I hope no one was caught out in the squeeze. Risk management and well placed stops

So what did you make of the “The Bernanke & Geithner Show”. From my point of view it was a little under whelming and they portrayed themselves badly. Tim Geithner did come across a little better towards the end but still the confidence wasn’t there. As for big Ben Bernanke he seemed, stressed (which I understand), unprepared, nervous and jittery. His answers weren’t confident and he lacked conviction.

For these and many more obvious reasons like the lack of detail the markets roundly sold off. The DOW ended -380 down just off the lows of the session while the NASDAQ ended down -66 points. Generally I think there is agreement that this show gets the thumbs down. It will be interesting to see do the markets perk back up or continue down tomorrow.

Monday sees the launch of one of the biggest bailout/stimulus efforts in history. Secretary Timothy Geithner is due to reveal how the Treasury will use the second half of a $700 billion bank bailout package as well as unveiling new programs to aid the ailing financial markets. The size and quality of the stimulus is obviously unprecedented but will this be enough or will we be back here in another year?

From a trading point of view I’m nervous on both fronts. If this is an amazing package (I have my reservations) then there could be a violent whip snap back to 8500 on the DOW bringing the FTSE 100 up to 4500. In this scenario most traders would be anticipating a recovery and buying stocks while I on the other hand would be selling short. I don’t believe the US can fix this alone and China along with Europe could undo all the good work any stimulus will do. That’s why I would sell any rally.

I do have shorts open at present and my concern is that the markets rally. If on the other hand market participants judge the efforts wanting then a large sell off will push us past the lows and with no backup plan look out below for equities. Great for me but the ramifications are huge and the outlook bleak. I have no strong opinions on what will happen but I will be watching with baited breath.

Just out: U.S. nonfarm payrolls plunge 598,000 in worst month since 1974 increasing the jobless rate to 7.6%

Taoiseach Brian Cowen has told the Dáil he would “like to see” pay for top bankers cut by at least 25%. The key phrase here is “like to see”, meanwhile over in the US we have the rather more forthright Obama leadership demanding a limit of $500,000 as an executive compensation cap. These guys are still getting away with one of the most obscene jokes in history and should be shackled with the keys thrown away.

In other cheery news ADP numbers out in the US put unemployment at 522,000 but revised up December figures. Over this side of the pond our live register figures have hit a record high of almost 328,000. All in all these are bleak numbers and don’t bode well for the future, let alone Friday. However markets being markets this figure coming in as expected could rally the markets further. Who’s to know?

I’m still dipping in and out but waiting for a rise above 4250 before shorting again. I am currently running three short positions.