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- Exited my long position in Silver
- Added to my short position in the Schatz
- Entered a long position in the KOSPI
- Partially stopped out of my long position in the KOSPI
- Entered a long position in the NIFTY
This week was one of those weeks where the market reminds everyone that anything is possible. It is these periods where your risk management, position sizing, etc really get put to the test. For the most part I was happy how my systems held up through the volatility but there was one area where I fell short that gives me more to think about.
What I had failed to realise was how big a position my Nikkei trade had become on my overall portfolio and that even though a decline down to its trailing stop would still result in a great individual trade I was unaware how big an impact it could have on the overall profitability of the portfolio. I need to develop a method for recognising the point when a position starts to dominate the portfolio and then scale it down where possible to minimise its impact in times of market stress like we witnessed this week.
Below are comments on my open positions.
M6E – Euro
Trade: Long 3 contracts of March Micro Euro
Entry Price: 1.1375
Stop: 1.1375
Weekly Comment: The Euro was lower this week trading back down to re-test the September highs which are holding for now.
MCD – Canadian Dollar
Trade: Long 3 contracts of March Micro Canadian Dollar
Entry Price: $0.7612
Stop: $0.7612
Weekly Comment: The Loonie was lower this week but finished well off the lows on Friday. I’m happy to continue to hold this position while above the 200 SMA.
NK225M – Mini Nikkei
Trade: Long 2 contracts of March Mini Nikkei
Entry Price: 19,184
Stop: 19,184
Weekly Comment: The Nikkei got smashed this week with the sell-off across global equity markets. Prices remain above the 200 SMA so my trailing stop has not yet been triggered and I will continue to hold until this happens. The US markets finished strongly on Friday and we’ll see next week whether this sell-off is merely a correction or the start of something bigger.
ZN – US 10 Year Note
Trade: Short 1 contract of March 10 Year Note
Entry Price: 124 30/32
Stop: 125 10/32
Weekly Comment: The Notes swung around wildly this week with the chaos in the equity markets but finished the week only slightly higher and well off the weeks highs suggesting the downtrend in the Notes is still strong.
SIL – Silver (1,000)
Trade: Long 1 contract of March Silver (1,000)
Entry Price: 17.35
Exit Price: 17.78
Result: -1.11R
Weekly Comment: Silver was higher to start the week and I used this strength to exit at a better price. Silver re-tested the underside of the 200 SMA on Tuesday before reversing strongly and making new lows for the move.
MJY – Yen
Trade: Long 2 contracts of March Micro Yen
Entry Price: 0.009152
Stop: 0.00895
Weekly Comment: The Yen was also volatile this week with prices swinging up and down but continued to follow the 20 SMA up and finished the week higher but off the highs of the week.
FGBS – German Schatz
Trade: Short 2 contracts of March Schatz Average Entry Price: 11.875
Stop: 112.025
Weekly Comment: The Schatz were sharply higher early in the week with the chaos in the equity markets. One of my orders above the market were triggered during the move with the last order just missed. Prices finished the week higher but well off the highs of the week.
Mini KOSPI 200
Trade: Long 2 contracts of the March Mini KOSPI 200
Entry Price: 315.30
Stop: 309.80
Exit Price: 302.62
Result: -2.31R
Reasons for entering the trade:
Technical: Prices traded down to a rising 200 SMA.
Reasons for Stop Placement: More than 1% below the 200 SMA.
Weekly Comment: A number of the equity markets were sharply lower on Tuesday trading down to their 200 SMA’s before bouncing strongly and finishing the day well off the lows. With this price action I was keen to add to my exposure in the equity markets in case there was a quick recovery. With many of the markets already well off the lows Korea looked appealing as it wasn’t too far off its 200 SMA at the close on Tuesday. I had an order back at the 200 SMA on Wednesday which was filled on the move lower late in the session. The trade was immediately under water but held just above my stop on both Wednesday and Thursday. I was expecting a big gap down on the open on Friday so I amended my stop to only exit half the position. I will look to exit the other half of the position on any further strength in an attempt to bring the loss back closer to 1R. I was too quick to enter this trade and the fact that this market didn’t bounce strongly off its 200 SMA on Tuesday should have been the warning sign not to enter this trade.
IN – NIFTY 50 (SGX)
Trade: Long 1 contract of the February NIFTY 50
Entry Price: 10,350
Stop: 10,105
Reasons for entering the trade:
Technical: Prices traded down to a rising 200 SMA.
Reasons for Stop Placement: More than 1% below the 200 SMA.
Weekly Comment: India tested the 200 SMA on Tuesday but finished well off the lows. I missed this setup on Tuesday but I entered an order back at the 200 SMA on Wednesday which was filled during the fall on Friday. I was reluctant to keep this order open on Thursday and Friday after the Korea trade but India is a market I am very bullish on so I decided to stick with it. The Nifty finished off the lows again on Friday and we’ll see next week whether this is just a correction or the start of something bigger.
Below are comments on the opportunities I am watching.
U – Uranium Participation Corp (TSX)
Uranium continued to hang around the 200 SMA this week but any attempts to move higher were sold.
CC – Cocoa
Cocoa dipped lower this week trading back down towards the 200 SMA. There was plenty of opportunity to enter a trade this week but my focus was on the equity markets.
KE – Kansas Wheat
Kansas wheat closed above the 200 SMA on Wednesday but not by enough to trigger an entry. Prices quickly fell back below this level and closed below it on Friday.
European Equity Market Indices
The majority of the European equity markets plunged below there 200 SMA’s early in the week and looked to be the weakest around the world with the majority of the US and Asia holding above there 200 SMA’s. The only exception I could find in Europe was Italy which held above its 200 SMA so that is now my main focus in Europe.
DAX
CAC 40
FTSE
MIB
Asian Equity Market Indices
I covered Asia a lot already but some other markets of note.
CN - China A50 (SGX)
China was sharply lower on Friday but held above the 200 SMA. This could end up being a great buying opportunity but I’m not willing to add anymore exposure to Asia at this stage.
TW – Taiwan Index
Taiwan tested the 200 SMA again this week and is holding for now. I had an order to enter at the 200 SMA on Wednesday but cancelled it after the order in Korea was triggered.
HSI – Hang Seng
Hong Kong is one of the only equity markets still well above its 200 SMA despite also suffering large falls this week. It may offer a good opportunity should markets still have a bit further to fall before finding a bottom.
ES – S&P 500
The ES bounced strongly from the 200 SMA on both Tuesday and Friday which is constructive and this good be a good area to buy.
Trade: Long 3 contracts of March Micro Euro
Entry Price: 1.1375
Stop: 1.1375
Weekly Comment: The Euro bounced back strongly this week re-testing last months highs but couldn’t finish the week at new highs.
MCD – Canadian Dollar
Trade: Long 3 contracts of March Micro Canadian Dollar
Entry Price: $0.7612
Stop: $0.7612
Weekly Comment: The Loonie was higher this week but couldn’t hold above the 0.80 level.
NK225M – Mini Nikkei
Trade: Long 2 contracts of March Mini Nikkei
Entry Price: 19,184
Stop: 19,184
Weekly Comment: The Nikkei was lower to start the week and tested the 200 SMA but bounced strongly from this level to finish the week higher.
ZN – US 10 Year Note
Trade: Short 1 contract of March 10 Year Note
Entry Price: 124 30/32
Stop: 125 10/32
Weekly Comment: The Notes broke lower again this week making new lows for the move but finished the week off the lows.
MJY – Micro Yen
Trade: Long 2 contracts of March Micro Yen
Entry Price: 0.009152
Stop: 0.00895
Weekly Comment: The Yen rose strongly this week breaking out of the top of the recent range.
FGBS – German Schatz
Trade: Short 2 contracts of March Schatz Average Entry Price: 11.875
Stop: 112.025
Weekly Comment: The Schatz was higher early in the week but fell back to finish the week practically unchanged.
Mini KOSPI 200
Trade: Long 2 contracts of the March Mini KOSPI 200
Entry Price: 315.30
Stop: 309.80
Weekly Comment: The KOSPI was higher at the start of the week trading back up towards the 200 SMA before trading ceased for the lunar new year on Wednesday. The market should open strongly on Monday and I plan to move my stop up to break even.
IN – NIFTY 50 (SGX)
Trade: Long 1 contract of the February NIFTY 50
Entry Price: 10,350
Stop: 10,105
Weekly Comment: The NIFTY traded in a tight range this week and didn’t rebound as strongly as other markets but remains above the 200 SMA. The Indian exchanges announced that they would cease licencing the NIFTY to foreign exchanges last weekend so I need to monitor the volume in the Singapore contract before it is cut off in August.
Below are comments on the opportunities I am watching.
CC – Cocoa
Cocoa tested the 200 SMA early in the week and I was contemplating a position but I was too slow and missed the opportunity with prices rising sharply on Wednesday and following through higher on Thursday.
KE – Kansas Wheat
Kansas wheat reclaimed the ground above the 200 SMA this week but still hasn’t broken through by enough to trigger an entry.
CAC 40
The French stock market regained the ground above the 200 SMA on Friday and may have triggered a buy signal.
MIB
The Italian stock market tested the 200 SMA again during the week and held. Any retrace back down towards the 22,000 level might offer a good buying opportunity.
- Rolled my long position in the NIFTY from February to March
- Added to my short position in the Schatz
Below are comments on my open positions.
M6E – Euro
Trade: Long 3 contracts of March Micro Euro
Entry Price: 1.1375
Stop: 1.1375
Weekly Comment: The Euro continued lower this week but held above the recent lows.
MCD – Canadian Dollar
Trade: Long 3 contracts of March Micro Canadian Dollar
Entry Price: $0.7612
Stop: $0.7612
Weekly Comment: The Loonie was lower this week trading down to test the 200 SMA which held this week. If this level fails I will move on from this trade.
NK225M – Mini Nikkei
Trade: Long 2 contracts of March Mini Nikkei
Entry Price: 19,184
Stop: 19,184
Weekly Comment: The Nikkei started the week higher before falling back on Thursday but recovered on Friday to finish the week slightly higher.
ZN – US 10 Year Note
Trade: Short 1 contract of March 10 Year Note
Entry Price: 124 30/32
Stop: 124 30/32
Weekly Comment: The Notes didn’t quite make new lows early in the week before rising late in the week to finish the week slightly higher.
MJY – Yen
Trade: Long 2 contracts of March Micro Yen
Entry Price: 0.009152
Stop: 0.00895
Weekly Comment: The Yen was lower early in the week falling back down into the range before moving higher late in the week to finish back near the top of the range.
FGBS – German Schatz
Trade: Short 3 contracts of March Schatz Average Entry Price: 111.90
Stop: 112.025
Weekly Comment: The Schatz were higher this week trading back up to the 200 SMA on Friday and triggering the order for the last tranche of my position.
Mini KOSPI 200
Trade: Long 1 contracts of the March Mini KOSPI 200
Entry Price: 315.30
Stop: 309.80
Weekly Comment: The KOSPI traded back above the 200 SMA at the start of the week but quickly fell back below this level before rallying strongly on Friday to close back at this level.
IN – NIFTY 50 (SGX)
Trade: Long 1 contract of the February NIFTY 50
Entry Price: 10,370
Stop: 10,125
Weekly Comment: The NIFTY was lower early in the week but continued to hold above the 200 SMA before rallying strongly on Friday to finish the week slightly higher.
Below are comments on the opportunities I am watching.
CC – Cocoa
Cocoa moved strongly higher this week confirming the break above the 200 SMA. The London contract is now around the 200 SMA and I’ll be looking to trade this market through that contract.
KE – Kansas Wheat
Kansas wheat dropped back below the 200 SMA this week but was supported by the 20 SMA.
CAC 40
The French stock market consolidated above the 200 SMA this week but hasn’t yet broken this level decisively.
MIB
The Italian stock market was weak this week but did not trade low enough to intersect with the 200 SMA again. I won’t be looking to enter a trade in this market till after the election.
TSE 60
The Canadian stock market was higher this week reclaiming the ground above the 200 SMA on Friday and may offer a good buying opportunity here.
FOAT - OAT
The French OAT was sharply higher on Friday trading back up towards the 200 SMA. The 50 SMA is just about to trade down through the 200 SMA and I may look to enter a short position near this intersection.
- Rolled my position in the 10 Year Note from March to June
- Entered a long position in Mini Wheat
- Exited my long position in the Canadian Dollar
- Exited my long position in the KOSPI
- Stopped out of my short position in the Schatz
- Exited my long position in the NIFTY
Below are comments on my open positions.
M6E – Euro
Trade: Long 3 contracts of March Micro Euro
Entry Price: $1.1375
Stop: $1.1375
Weekly Comment: The Euro dipped lower early in the week briefly trading below the 50 SMA and the recent lows before recovering to finish the week slightly higher.
MCD – Canadian Dollar
Trade: Long 3 contracts of March Micro Canadian Dollar
Entry Price: $0.7612
Exit Price: $0.7800
Result: 1.1R
Weekly Comment: The Loonie broke below the 200 SMA on Tuesday and confirmed the break on Wednesday where I exited the position near the close. Prices continued lower from there but are holding above the December lows for now. I think this is the first trade that I have actually held the whole way through the trend and whilst it didn’t end up being a huge winner this time I’m happy to see a trade the whole way through.
NK225M – Mini Nikkei
Trade: Long 2 contracts of March Mini Nikkei
Entry Price: 19,184
Stop: 19,184
Weekly Comment: The Nikkei was higher to start the week trading up to the 100 SMA. I though about reducing my position in half around this level but decided to hold until next week when I needed to roll the position anyway. This proved to be a mistake as the Nikkei traded sharply lower to finish the week back at the 200 SMA after trading below this level on Friday. I will either exit half or all of the position early next week.
ZN – US 10 Year Note
Trade: Short 1 contract of March 10 Year Note
Entry Price: 124 12/32
Stop: 124 12/32
Weekly Comment: The Notes moved higher during the week closing above the 20 SMA for the first time since mid December but fell back on Friday to finish the week practically unchanged.
MJY – Yen
Trade: Long 2 contracts of March Micro Yen
Entry Price: 0.009152
Stop: 0.009152
Weekly Comment: The Yen dipped lower at the start of the week but held the 93 level before moving higher and closing at a new weekly closing high for the move.
FGBS – German Schatz
Trade: Short 3 contracts of March Schatz Average Entry Price: 111.90
Exit Price: 112.025
Result: -1R
Weekly Comment: The Schatz traded back above the 200 SMA on Thursday and continued higher on Friday triggering my stop but finished off the highs and held below the 100 SMA.
Mini KOSPI 200
Trade: Long 1 contracts of the March Mini KOSPI 200
Entry Price: 315.30
Exit Price: 306.94
Result: -1.52R
Weekly Comment: The KOSPI was higher at the start of the week before turning lower on Wednesday. I missed an opportunity to exit at the close on Wednesday and hadn’t seen that the market was closed on Thursday. I was planning on exiting at the open on Friday but caught up at work and didn’t get a chance to exit until the afternoon once even more damage had been done.
IN – NIFTY 50 (SGX)
Trade: Long 1 contract of the February NIFTY 50
Entry Price: 10,370
Exit Price: 10,283
Result: -0.36R
Weekly Comment: The NIFTY was lower this week trading back down to the 200 SMA. Prices were trading below the 200 SMA leading into the US session on Friday and I decided to exit the position for a small loss rather than risking any further downside to finish the week. Prices recovered on Friday to close slightly higher but remain below the 200 SMA.
XW – Mini Wheat
Trade: Long 3 contracts of May Mini Wheat
Entry Price: $4.90
Stop: $4.7450
Reasons for entering the trade:
Technical: Prices surpassed the 200 SMA after a long downtrend.
Fundamental: A poor winter crop has been supporting wheat prices.
Weekly Comment: Wheat broke above the 200 SMA on Wednesday. I was able to enter on the small dip during the overnight session on Thursday before prices recovered and continued higher but that move was mostly reversed on Friday with a bearish end to the week.
Below are comments on the opportunities I am watching.
CC – Cocoa
London Cocoa broke above the 200 SMA on Tuesday. I had an order to enter below the market on Wednesday which was missed by 3 ticks before prices reversed and finished the day higher and then continued higher for the rest of the week. The US contract also closed above the top of the range on Friday providing a further bullish signal. I’ll continue to monitor this market and look to enter on any weakness.
KE – Kansas Wheat
Kansas wheat closed back above the 200 SMA on Monday and continued higher from there. I would have preferred to trade this market as it is the leader but I wanted to reduce the position size by trading the mini contract and the Kansas mini contract has no volume so I went with the Chicago contract instead.
NG – Natural Gas
Natural Gas was higher this week following the 50 SMA up with a series of lower lows. If we see an impulsive move back above the 200 SMA I may look at taking a long position.
OAT
The French OAT continued higher this week finishing the week right at the 200 SMA with the 50 and 200 SMA’s just about to cross over.
European Stock Markets
The European stock markets tuned lower again at the end of this week with most of the major markets now below their 200 SMA’s and a number of them even have a 200 SMA which is starting to turn over. I am now neutral on stock markets in Europe and leaning more towards opportunities on the short side. If prices do start to move higher again I will be waiting to see new highs before entering any long positions.
- Exited half my long position in the Nikkei and rolled the other half from March to June
Below are comments on my open positions.
M6E – Euro
Trade: Long 3 contracts of March Micro Euro
Entry Price: $1.1375
Stop: $1.1375
Weekly Comment: The Euro was higher early in the week before falling sharply on Thursday to finish the week slightly lower but still holding above the rising 50 SMA.
NK225M – Mini Nikkei
Trade: Long 1 contract of the June Mini Nikkei
Entry Price: 18,984
Stop: 18,984
Exit Price: 21,250
Result: +8.02R
Weekly Comment: The Nikkei tested the 200 SMA again this week and held. I rolled my position on Tuesday and exited half the position in the process. The reduced position size should make it easier to keep holding the position through the increased volatility seen recently.
ZN – US 10 Year Note
Trade: Short 1 contract of March 10 Year Note
Entry Price: 124 12/32
Stop: 124 12/32
Weekly Comment: The Notes were mostly sideways this week and continue to find resistance at the December 2016 lows.
MJY – Yen
Trade: Long 2 contracts of March Micro Yen
Entry Price: 0.009152
Stop: 0.009152
Weekly Comment: The Yen was lower this week breaking the 94 level but held the rising 20 SMA.
XW – Mini Wheat
Trade: Long 3 contracts of May Mini Wheat
Entry Price: $4.90
Stop: $4.7450
Weekly Comment: Wheat was lower this week but remains above the 200 SMA.
Below are comments on the opportunities I am watching.
6C – Canadian Dollar
The Loonie continued down through December lows at the start of the week before rallying late in the week to close back above this level but still well below the 200 SMA.
FGBS – German Schatz
The Schatz remained above the 100 and 200 SMA’s this week despite a brief dip below these levels on Thursday.
Mini KOSPI 200
The KOSPI was higher this week closing back near the 200 SMA.
IN – NIFTY 50 (SGX)
The NIFTY continued lower this week finishing the week well below the 200 SMA.
CC – Cocoa
Cocoa ripped higher this week and this trade is well and truly gone now unfortunately.
NG – Natural Gas
Natural Gas was unable to break above the 200 SMA this week but remains above the rising 50 SMA.
NQ – NASDAQ
The NASDAQ was the first of the major stock market indices to break out to new highs on Friday and this makes it my main focus in the sector. The futures contract isn’t an option due to the overnight margin requirements so I’m considering a position in QQQ.
