Whether it be a Fed bounce or Xmas rally, the mood changed last night. I stayed up late and read several articles to form an opinion regarding what would happen after Yellen spoke. Staying up later than usual was easier than expected because my 17 yo daughter had two friends for a sleep over ... they generated quite a lot of noise. My conclusion was that it was worth a punt to the upside, but what instruments to trade. Eventually, and shortly after midnight WA time, I opened a small long with SPXL and a modest long with SVXY. For anybody not familiar with these ETFs, SPXL is based on the S&P500, but with a 3x acceleration factor, and SVXY is an inverse volatility ETF.
This morning SPXL is up 4.5% from my open point, ans SVXY is up 9.4% from my open point. A nice surprise this morning, and welcome due to the fact that my two oil ETNs, USO and UWTI, are still stubbornly in the red.
Regarding oil, at least both STO is finally green, and WPL continues to perform well. Now all I need is further gains with my BHP and FMG trades for them to pull them out of the red and I will have nothing to complain about.
I am hoping that last nights turn around is the start of a xmas rally that lasts 2 to 3 weeks. However, just in case this scenario does not eventuate, I will be adjusting my profit protector stops daily on those trades that are at present green to ensure that my profit does not disappear overnight. The tricky bit is to not set the stops too tight to avoid being stopped out and missing larger gains. This is what happened with my recent UVXY trade, banked a reasonable profit via the profit protector stop, but missed out on subsequent larger gains.
Anybody else of the same opinion, or a different opinion, regarding the xmas rally?
Thor, your recent FX calls were excellent, particularly wrt the Rouble. However, I did not participate in the action as although I have done a little FX trading years ago, my success rate was poor. Maybe I will dabble in FX again in the future, but for now I am busy with the other stuff.
