January Effect 2003 Message Board

STOCKTALK

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Strategies & Market Trends : January Effect 2003

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To: RockyBalboa who wrote (192)	3/7/2003 2:58:16 AM
From: Londo	Read Replies (1) of 666

Fortunately I never acted on my hunch (and thus never went short on the Euro)... don't know what to make of the currency situation. US Treasury Bonds - they took a run at the futures (June got low as 114 6/32 from a high of 115 2/32 Wednesday) - not quite my 1 8/32 that I was looking for, so I'm going to try to take a swipe at the bond futures short at 115 8/32 with a half-point stop loss. I suspect there needs to be some more long profit taking before we'll see the next leg up (or rather yield down to the 4.2-4.3% range). I don't think we will see these yields though until 3-6 months after Iraq. In the meantime, yields could rise again (most geopolitical concerns have to be priced in at this stage). My only concern is that my stop loss is set too narrowly. My other concern is that my order is going to get missed entirely. And finally, my last concern is that I'm trying to catch a falling knife. With this many odds against me, I just have to take the trade! Others must be trying to face the same thoughts as well. I'm going to cover my S&P shorts Friday as well. Something tells me that there's going to be a day that the market goes up 5%, and I at least don't want to be short in such a squeeze (and preferably would like to be long it!). The problem is I don't know which day next week this will happen! So best to cover before the weekend. Seems to be a regular pattern for me. Last note is on the crude futures - I find it difficult to believe that the obvious resistance at 40 dollars will hold - I could just imagine all of the stop buy/cover orders hovering around that price point, and I could imagine a brief period of time where oil will trade above 40 dollars, make all the news headlines, and then be ripe for a perfect short. I'm waiting for that moment. Thankfully NYMEX electronic crude futures have tight spreads.

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