I am getting back into the daily news and trying to get my focus back on the markets. It’s another earnings season and with that we can expect some good beats and some scary misses. The interesting thing will be if we can push the markets higher or sink back lower when all is said and done. Personally I think we will escape flat to slightly higher once the earnings are over and this will leave us time for a nice Christmas rally. Yeah I’m already thinking of the Christmas rally. Every year it has taken me for a ride but maybe this year I should sit it out and save some cash.

The rally so far has taken on many new subscribers with me included. Many of the perma-bears have shed their coat and are now wearing a nice new
bull skin. I had thought that the fundamentals would have put the breaks on the markets but then lots of little things kept improving. This morning is a case in point as UK house prices rise for the first time in 16 months. All this little signs have fed the most amazing and unprecedented rally in recent history. Hindsight has clearly shown us that the March lows were very oversold but the current pricing in of growth is in my humble opinion overly exuberant. Somewhere in between these two extremes lies the perfect market price. However that’s not my concern, in the past this would have swayed my view but now I’m just watching the trend and not questioning the greed.

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I seem to have developed the market jinx a rare but powerful affliction that gives me the power to incorrectly predict market movements. As readers will have seen I was caught badly wrong on FTSE positions which have cost me dearly. Yesterday as markets rallied I took a positing out on the DOW as it had rallied 600 as I thought it would fall a hundred at the close. I left the monitor on with CNBC in the background and went off to cook a horrendous meal, my version of the India Nargisi Kofta. When I left I was 80 Euro up and quite relaxed with only 30 minutes to go to the close. When I came back I was down badly and had destroyed good food. My only saving grace was I bought DOW March futures which will allow the rally to peak and drop getting me out with hopefully little impact.

Not a good few days for me but it has shown I lack the experience to deal in volatile markets but with 10% moves how do you trade with a tight stop? I have relatively maintained my capital and over the next few days that’s my key goal. The temptation to make quick gains like last night has proven costly at best.

Hope you are all fairing better than I am and happy and safe trading.