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ES_F long: Added as said in this week intentions at 1398.00. I can easily do that as I am holding from around 1.300 from last June. This is a core trade based on the US improving fundamentals while the Fed is engaged in an open ended policy. Many add-ons have been closed during the last pull back covering largely the risk premium and I am now rebuilding the position.Ignored
As mentioned in a previous post I am posting now my intentions about the SPX using the ES front month as a proxy. ES is a wild beast, working like a resonance chamber of current and near term market sentiment, amplifying and generating rumors, swinging sharply on headlines or staying put for several days. I look at it on the medium/long term only (at least 2 months), and play intraday moves just to add to a well established position.
I am rebuilding a core position taken last June and from which I closed all the add-ons after Obama election. At the time the focus shifted from the political uncertainty to the massive threat of the fiscal cliff. We had a significant pullback to 1340.00 and since then I was waiting for the price to return around 1400.00 before reloading, considering this psychological level as a support protecting from the downside. Now market is pricing in a compromise between lawmakers and should return to the previous highs around 1460.00-1470.00. That said, the market is very sensitive to anything about the cliff and can pull back sharply on any comment from politicians. I see those moments as opportunities to add into the position. I can do that because the risk premium is paid by the core at 1304.00 and I have already accumulated significant gains from the closed add-ons. Beside being covered already why am I rebuilding this position now?:
1:The improving US economy, confirmed by more and more good numbers, mainly from the unemployment front and the housing sector. This was laso confirmed by the beige book.
2:The open ended easing, targeting 7% unemployment rate decided lately by the Fed.
3:The end of uncertainty on the political ground since President Obama election.
4:The fiscal cliff meanwhile being a threat to the market is also an opportunity to add at a lower price and above all is able to push the price higher when the deal is done. This is important, because I don’t think that the market is going to fully discount the outcome ahead of the deal as it is a political matter with the usual surprises either side.
If i wasn’t already protected I would’ve tried, here at this current level, to start implementing a core position by splitting the size of it and entering on some strong positive catalysts.
Risk to the trade:
1:No fiscal cliff deal but not that important on the long run.
2:Fed less dovish though unlikely.
3:Eurozone political difficulties as now I think that the main risk to the Eurozone is becoming political rather than debt linked. Bunderstag vote on Greek bailout, Catalonia independence, Italian elections etc
http://www.elitetrader.com/vb/attach...postid=3691507
Rien ne sert de courir il faut partir à point.