Dow Makes New Post-November Low

Kickin’ ‘n screamin’, the FTSE was dragged lower as the Dow headed for November’s low of 7450. On the currency merry-go-round the Dollar was king pin on renewed risk aversion trades.

Today was like one of those Man. United performances where they’re rubbish but still grind out a 1-0 win; boy, it was a frustrating day. First off, my planned trip to the gym was cancelled in favour of nursing my youngest back to health in time for Sunday’s rugby. And secondly, today’s front-line trading suggested that I might as well have been in the gym. Scrappy wins in both directions on GBPUSD and a couple of short trades in EURGBP just about covered a losing long trade in EURGBP this morning. A distraction with some Calpol ruled out the early short in Sterling and by the time I joined in I was less relaxed about running the trade and took my profits far too soon.

After the past couple of days, it seemed reasonable to back the EURGBP for a push up through £0.91. So when the price retreated from £0.9071 I paid £0.9049 for a cautious £1 opener. I reckoned I was possibly paying too much as the moving average support was some way below, so the aim was to increase the bet when I had a stronger conviction. I set my stop at £0.8990, thinking that there would be good support at the big figure.

Any profits on this trade were fleeting before a deadly drift lower, eventually taking out support at the 21-period moving average and £0.90. I stuck with my bet until it was killed off for a £59 loss, but didn’t feel inclined to add to the position. I wanted to see a rally to tempt me in, but there just wasn’t one.

And on the long-term stuff, I don’t want to appear ungrateful but making money out of my short equity position was like milking a bull! In early trade I closed out £2 of my £7 Lloyds short bet because it’s dull and tying up capital. I might only have made enough for a pint tonight, but the move was justified as the shares are up on the day against a falling index.

When I say ‘falling index’ it’s through gritted teeth. At the moment the Dow’s off another 130 points, and exploring fresh territory this side of November. The Dax is 110 points lower, and the FTSE? Yep, the FTSE’s off a whole 15 points!!!

Update:
Equity rally has taken FTSE to unchanged on the day.
EURGBP also rallied, re-taking the £0.90 handle and poking its nose above the 21-hour moving average. The long game could still be on, but I’m leaving it for tomorrow. Here’s hoping for a rip-roaring Friday.

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