Straddle, Spread, Breakout - The Greenrush Capital Journal

Discussion in 'Journals' started by Drew Klein, Feb 5, 2007.

  1. Stopped out of the Aussie Dollar this AM after breaking 7845...
    #11     Feb 15, 2007
  2. Hi Drew,

    Thanks for the journal! It's tough to lay it all out for everyone to see, and I'm looking forward to tracking your plays.

    I'm wondering about the AD and CD trades.

    Getting stopped out of the short AD at this point seems like getting kicked out of the trade before it started. It has just hit the top of a pretty well established down-channel. It'll either break out (in which case you want out), or head back to .7700 or maybe even .7650. I like the short trade here (or even back on 2/9), but would have put my stop above that upper channel.

    I like the +CDH7-ADH7 spread chart pattern, but worry about the individual charts. Short ADH7 looks good, but long CD is worrisome. Do you look at the individual charts when you trade the spreads, or just the spread chart?

    Anyway, I hope you don't mind the comments. :)
    #12     Feb 16, 2007
  3. Hey Fully..
    No, I appreciate the comments...and yes, it's hard to start a journal with a loser, but it is what it is. My trading record will reflect it unfortunately.
    As for the AD, my symmetrical triangle was violated with the move up above 7845 yesterday, but I retain my exposure in the short AD via the CD-AD spread.
    I tend to look only at the spread charts when I do a spread trade, because remember that the spread, though consisting of two different markets, is actually an animal all its own. I try to look at the end of day quotes, since the intraday gyrations are enough to drive a person nuts!

    While fundamentally the bet might not make any sense (with CDN rates lower than Aussie rates), the chart looks like it is basing via the inverse H&S and ready to make a move higher soon. Of course, I could be out of my mind wrong.

    If we are right, and the Aussie does end up falling to the bottom of this channel, I think the spread will work well, regardless of what the Loonie does....My bet is that if they both fall, the AD will fall faster and harder than the CD...

    Thanks for your comments...and cheers..
    #13     Feb 16, 2007
  4. Well the currency markets have us pounding our heads against the wall...our timing has been really off this month on the few trades we have done.

    Today, we got filled on a Hog/Cattle Spread. We bought the July Hogs, Sold the Oct Cattle at -16.70.

    Back to work...
    #14     Feb 20, 2007
  5. I feel your pain on the AD/CD trade. AD looks like it's about ready to roll over too, but I don't want to touch the CD.

    +SF-AD has a pretty strong seasonal bias, and that's the one I'm trading.

    What was your rationale for the Hogs/Cattle trade? I'm not well enough versed on the fundamentals to have an opinion, but the spread charts looks pretty bearish to me--there's a long downtrend right around the -15 level and a break to -20 seems reasonable. Seasonally, you're definitely on the right side of this trade though. Only 3 losing years in the last 15, 7 in the last 30? Wow.
    #15     Feb 20, 2007
  6. Hey Fully...
    The basis for the trade is seasonal and technical. I think we will see a breakout to the upside in this consolidative triangle. I think the deferred hogs will have a big upside move this summer. Of course, I could be wrong. Below is a chart...

    As for the currencies, they have not been forgiving at all. First the outright, then the's causing me grief.

    Cheers FA...
    #16     Feb 20, 2007
  7. Good move today on the +CD-AD despite AD breaking out yesterday. I got stopped out of my +SF-AD, sadly.

    Betting against the AD here doesn't seem high probability, but betting on the CD is an interesting idea. Any thoughts?
    #17     Feb 22, 2007
  8. Yeah FA,

    The hawkish comments from the RBA Governor, not to mention their rates being the highest of the 6 majors, seem to be the driving force behind the Aussie. My outright bearish view was decimated after 7845...a stop reverse may have been handy...
    I still like the way the spread chart (CD/AD) looks and I remain in the trade...The Loonie got a bid the other day after a strong retail sales number, plus the rising energy and metals prices don't hurt either...
    The Yen sure looks weak and has for a while..

    #18     Feb 22, 2007
  9. "Personally I think there's a greater risk to higher inflation," Fisher told reporters after an address to the Pacific Council on International Policy.
    But he noted that "overall I think there might be a moderation in inflation pressures."

    A what what?? How does this make any sense..?
    #19     Feb 23, 2007
  10. We sold our 480 WN7 calls at 50'4. With the gap filled in WH7 at 494, and end of the month, lack of a February break, major report at the end of March, we anticipate a correction in all the grains over the next few weeks.
    Today looks like a potential gap and crap day in all the grains. We'll have to wait and see what the close brings.
    Funds are insanely long corn now, somewhere around 2 billion bu, and if they decide at any point to start a small liquidation, it could ripple into a major event. Long-term, fundamentals remain strong for corn and beans, less so for wheat, in our opinion..
    #20     Feb 26, 2007