Performance for Month of October

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Category : Performance Page

October Summary Performance

Detailed Performance

 

  • October as a whole saw 1910 pips to have been made and closed on a net basis. The total winning pips were 4835 and the total losing pips were 2925.
  • Winning pips per call stood almost flat as October at 72 pips while the losing pips per call went down marginally.
  • The success ratio went down to 48% and has been function of the number of calls and how quickly have we been closing trades.
  • October results need to analyzed in the context of the furious counter rally in risk assets which was called correctly by us on Oct 2. Counter trends are some of the some of the most difficult trends to make money off and therefore October results are a function of how difficult the markets have been to make money.
  • This was a month where we tested the Live trading room to communicate our trades on a live basis. It has greatly improved our ability to communicate as earlier subscribers have complained about missed trades occasionally.

You can do the math for your portfolio and no matter which way you calculate, 1910 pips on an absolute basis is among the best hedge fund results for October across asset classes. The SP500 for the month of October gave a paltry 12% compared to 1910 pips for C3X portfolio. And to take things further Performance across months have shown an ability to generate positive pips.

See you on Monday Asia session at the Live Trading session.

C3X

Performance Oct 29 Week: What a week! (Updated)

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Category : Featured, Performance Page, Think Tank

“What a week” is all we have been to say. A week that saw Merkel and Co holding hands to tell the euro skeptics that they are wrong. Only time will tell whether there was anything substantial in those EU Summit plans.

We close the week with total pips at 1939 up from 1819 last week.

A few notes:

    The week could have been even better if we could trade our biases which was for a spike to 1.42. In fact there was an unfilled EUR/USD trade lying at 1.393/50 for a target of 1.41. We could not chase the pair as the stops had to be nearer 1.388. But we took some satisfaction in chasing down EURJPY during the spike albeit only to 106.8.
    The week saw a near 250 pip spike in USDCAD which was a fake and it came back down to 0.999 levels. That was tough to trade either ways. The USDCAD alone dug into our profits by over 100 pips.
    The highlight of the week had to be AUD/USD and clearly we could not catch that either. It has now retraced the entire fall from 1.07 in Sept even with a dovish RBA hanging over it. Only QE3 could be blamed for this or rather the “death of the dollar”
    Gold broke out from 1665 and then in the same week also took out 1745. These are bullish times for Gold and we are now set to test $2000 and we will not be surprised if it happens this year
    The effort has been to continue to make the winners BIG and the losers to be small. This has resulted in trade success ratio to dip to 49.8% from an elevated 70% in August when we were trading a mere 38/40 calls a month. As a comparison, October and Sept winning trades itself are nearly 1.5 x of the overall trades in July and August.

Happy trading and see you Monday at the Live trading session.

C3X

Intermarket Insights, YEN, UST2Y, DXY, EURO

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Category : Featured, Think Tank

Key counter trends this week has challened many of the established trends of the last 3 months. We will look at key pairs and intermarket to understand on their trends.

YEN vs 2Y yield on UST

YEN relation to US treasury Yield is well established. We see the rising YEN index against the backdrop of falling US yieldS esp on shorter end of the curve. But given that the US 2y yield has broken above the 50 MA, we may finally be in the early stages of YEN Index to have topped off.

YEN Index

Yen weakness is coming on the back of rising US short term yield curve as it breaks below the 50 MA.

UST 2Y Yield

The US treasury 2y yield gives a strong feeling that short term yield may have crossed over beyond the 50 MA for good this time as FED twist operation is pulling it away. A major casualty of the 2yYield is Gold and YEN both of which drive of the US yield curve.

EURO Index

EURO is set to extend and test 50 MA and even move to the 200 MA. The sheer velocity in the Index is expected to pummel euro to key crossover levels. The macro for such a move has been well priced in for the Oct 23 eur head meeting which many believe could give EU bonds a new sigh of life. Trichet has told FT that Treaty changes could be possible.

Dollar Index Daily

On the daily charts, we see the index, still above key levels but heading to test the 50 MA at 76.15 a level corresponding with the EURUSD at 1.3950/70

Dollar Index Weekly

The weekly chart reveal far more than the daily as we see the Index wedged between the 50 and the 200 WMA. These are key level and expect the dollar to test both levels.

Performance October 15 (Updated)

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Category : Featured, Performance Page, Think Tank

The sheet is updated with total number of pips for October at 1485.

We share the October trade sheet.

Please note the following:
1. USD/CAD trade of 13 October which hit target at 1.027: Only half our position hit targets and therefore you will see that *winning* pips are only half to what should have been possible and hence the lesser profit on the trade.
2. AUD/USD trade of 11 October which was stopped at 1.004: Stops were wider by more than 5% of the portfolio therefore our lots were adjusted to reflect lower losses. We continue to caution subscribers to adjust lots as and when wide stops are in play.

Rest of the portfolio and trades should be self explanatory.

While we have been quite adamant on the October rally spanning out and it has played itself to perfection, we have not yet fully taken advantage of this fast trend. So be accustomed that we will not catch each and every trend out there even though we will speak about it. For some trends, we will watch our biases to be proven. As traders, our advice is to get rid of the itchy finger to trade or rather as we call the “UBS finger” to load trades without fully understanding. So while we have been backing the rally and we have been on record in the trading room suggesting not to short EUR against the USD, right from the levels of 1.3610, the archives of the room can be checked to verify, we have not fully caught the rally and nor do we regret it. There are times when you let the market prove your thesis. It is not important to trade every single micro trend in the market.
Happy weekend we will see you on Monday Asia session but we will be back to full potential on Tuesday as we get back to our trading rooms given we are on a vacation till Monday.

You are free to provide links to the page if you would like to recommend. Happy to answer queries.

C3X

10 October Live Trading Blog

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Category : Think Tank, Trading Room

On Facebook Now….

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Category : Think Tank

We are on Facebook now. Please click the URL to see us there. All updates will also now be published to Facebook as well.

http://www.facebook.com/pages/C3X/294271560598899

Thanks

Support

USD/CAD and AUD/USD correlation chart

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Category : Think Tank

Guest post from a subscriber:

AUDUSD / USDCAD

Although the pairs are opposed, its clear how in tandem the AUD & CAD have moved in relation to the USD.

Looking forward to Monday

Best wishes
Mike

Gold Insights from Intermarket

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Category : Think Tank

We analyze Gold charts by looking at Inter-market analysis for the month of October. This is an update from our August Gold analysis and September Gold analysis all of which had noticed the stalling Gold at 1888 before we issued our shorts to catch the trend move to 1603.

Some of our posts which had caught almost the entire risk aversion trend over August and september:
Sept 9: Dollar King comes to take the Kingdom
Sept 4: The world is slowing
Sept 1: EUR Downfall coming
Aug 28: Has Gold final Lap ended?
Sept 14: USD/CAD pointing to sharp rise

These are only part of the analysis and premium subscribers are constantly updated of new trends from the world of Inter-market analysis.

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We have kept our commentary to as little as possible as the charts are self explanatory.

Gold DAILY Charts

  • The double top on GLD charts is evident and such patterns can immediately lead to falls of more than 20% if not more. In case of Gold it corrected from 1913 to 1528 all in the space of one month obviously led by forced liquidation of EU banks which were forced to raise cash levels in Sept. CME too played it part by raising Gold margins by over 20%
  • On the daily charts Gold rests on its 100 dma at 159.18 while the 100 DMA stands at 160.3. To note the importance, Gold has never challenged the 100 dma in the last 8 months.
  • On the daily charts, there is scope for further rise but we will need to look at other intermarket analysis to understand Gold price action

Gold WEEKLY Charts

  • Gold is clearly on a rising line as it is clear of all WMAs. The vortex, Stochastic while moderated are still above levels which are not yet threatening the larger bull move initiated 18 months earlier
  • The weekly MAs are still rising and therefore indicates a period of consolidation on weekly charts.

Gold in itself has little significance, in a capital market which runs and drives on inter-market relationships. No asset can be looked at in isolation anymore and hence our focus on inter-market.

Gold wrt to SPX Daily

  • Gold vs SPX has sharply fallen below the 50 dma and hence has been under-performing SPX.The good news though is that the MAs, are still on rising slope and hence we are not entirely sure of Gold underperformance with respect to SPX.

Gold wrt to Dollar Daily

  • There is a hardly more analysed relation than the Gold Dollar charts. The ratio has now plunged below 100 MA and the support from Oscillators and Stochastic are building the bearish pressure.

GOLD DOLLAR Weekly charts

  • There is a hardly a more analysed relation than the Gold Dollar charts. The ratio has now plunged below 100 MA and the support from Oscillators and Stochastic are building the bearish pressure.
  • While the daily charts are pointing to zone of strong consolidation with a possible test of the 200dma, the weekly charts are still pointing to gains.
  • It is vital to note that the 50 dma has started to slant down which will put further pressure on Gold.

Gold and US Treasury 2 Year Yield

  • While Gold relation with dollar is important to understand, the dollar itself derives it strength from the US treasury yield curve. Therefore a comparison of Gold to the 2 year yield will provide insights which may be difficult to understand elsewhere. The chart looks anything but pretty. The Gold vs 2 yield has crashed even below the 100 dma thus reflecting the sheer amount of deleveraging in the metals space. The stochastic are at rock bottom while the vortex indicator is in negative territory. The Oscillators too are in negative zone. With such strong bearish pressure, we do not expect Gold to run away in a hurry unless price action suggests otherwise. Banks borrow short term, invest into Gold futures and then market Gold as precious haven and the ensuing rise gives them the quarterly MTM. The Twist operation which so wonderfully evident in the bonds markets and forecasted by us, has put an end to that game.

Gold and Silver ratio

  • The gold silver ratio is a metric which is quite often used by traders but in itself is not very useful. The best lesson to learn from GLD:SLV chart is that during periods when Gold:SLV rises, it is wise to stay away from Gold. The ratio has zoomed past the 50 WMA and is now challenging the 100 wma.

We do not expect Gold or Silver to outperform the US treasury as yet. The trends are now well established and October may see an extension of all Gold under-performance.

But we need to watch the stochastic on the daily price and inter-market relations to see of any updates which will be issued to our premium subscribers.

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Our Performance on C3X portfolio is here: PERFORMANCE

C3X

Canadian unemployment falls to record: Gain in employment +61k

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Category : Featured, Think Tank

Following two months of little change, employment rose by 61,000 in September, all in full time. This increase pushed the unemployment rate down 0.2 percentage points to 7.1%, the lowest rate since December 2008.
Employment

In the 12 months to September, employment has grown by 1.7% (+294,000), primarily in Ontario and Alberta. Over this period, full-time employment rose by 2.5% (+344,000), part-time work declined 1.5% (-50,000) and total actual hours worked increased 2.0%.

September’s employment increase was spread across a number of industries, with gains in educational services; professional, scientific and technical services; accommodation and food services; natural resources; and public administration. These gains were partially offset by declines in finance, insurance, real estate and leasing; manufacturing; and information, culture and recreation.

There were notable employment increases in British Columbia, Saskatchewan, New Brunswick and Prince Edward Island in September.

In September, employment increased among the self-employed and public sector employees. Compared with 12 months earlier, employment growth in the private sector (+2.2%) was faster than that of the public sector (+1.1%), while self-employment rose slightly (+0.6%).

Service sector leads employment gains

Employment in educational services rose by 38,000 in September (see Note to readers). Compared with a year earlier, employment in this industry is up 1.7% (+20,000).

The number of workers in professional, scientific and technical services rose by 36,000 in September, continuing an upward trend that began in the summer of 2009. Over the past 12 months, employment in this industry has increased by 4.1% (+53,000), one of the highest rates of growth among all industries.

In accommodation and food services, employment was up 31,000 in September. Compared with 12 months earlier, employment increased by 7.6% (+80,000), the highest growth rate among all industries.

Following two consecutive months of decline, employment in natural resources increased by 17,000 in September. This gain brings employment in this industry to the same level as 12 months earlier.

There were also employment gains in public administration (+14,000), bringing employment back to its level of September 2010.

Employment fell by 35,000 in finance, insurance, real estate and leasing. Compared with a year earlier, employment in this industry is down by 1.4% (-15,000).

Following little change in the previous three months, employment in manufacturing was down 24,000 in September. This decline leaves employment slightly above its level of September 2010 (+0.8% or +13,000).

There were also declines in information, culture and recreation (-22,000). Despite September’s decline, employment in this industry increased by 1.5% (+12,000) compared with 12 months earlier.

While employment in construction was little changed in September, it was up 4.1% (+50,000) from a year earlier, one of the highest growth rates of all industries.
Large gains in British Columbia

Employment in British Columbia rose by 32,000, all in full-time work. This was the first notable employment gain since July 2010. The unemployment rate fell by 0.8 percentage points to 6.7% in September.

In Saskatchewan, employment increased by 4,000 in September. Employment in the province is up 0.9% compared with 12 months earlier, lower than the national average of 1.7%.

Employment increased by 2,700 in New Brunswick. Despite this gain, employment in the province was 0.5% lower than 12 months earlier.

While employment in Alberta was little changed in September, over the year, employment has grown by 4.8% (+98,000), entirely in full-time work.

Employment in Quebec was unchanged in September. With fewer people searching for work, the unemployment rate fell by 0.3 percentage points to 7.3%. Compared with September 2010, employment increased by 0.6%.

Ontario employment was little changed for the second consecutive month and the unemployment rate was 7.6%. Over the past 12 months, employment increased by 2.0% (+136,000), above the national growth rate of 1.7%.

Source

Guest Post chart: SP at barrier level

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Category : Think Tank

Morning C3X team.

looked at the weekly long term chart for SP500.

Stands out how important the 200MA is a s a guide to support/resistance.

Current 200MA=1142.6 (Now clear resistance)
Current SP Level=1140.9

Clearly the market SO wants to breakdown and head rapidly to 1000, likely 985.

But we could go for weeks yet before it finally heads down, maybe on a big news event? MS? GS? BOA?

Happy & profitable trading

Mike

s2Member®