My personal portfolio
A slightly in-the-money stop triggered on a hedge short position
NDX 100 (weekly & daily) hedge short covered
This was a lucky escape for me. Around 2pm GMT, the March NDX 100 contract was down and testing 3600, so I placed a slightly in-the-money stop before heading out on a brief errand. When I got back, I was surprised to see that it had suddenly surged to new highs in a few minutes. My March NDX 100 short was stopped out (bought in) at 3617 against Wednesday’s sale at 3620.4. These prices include all spread-bet dealing costs.
This short-term move has an HFT look about it, which is no surprise, but increased volatility does make leveraged trading more difficult, as I have said before. I am impressed by Wall Street’s latest rally, particularly as the negative January effect created some trend inconsistencies which I pointed out. However, the yearend overbought and overstretched conditions were corrected by mean reversions in January. Most importantly, the Fed’s monetary policy remains a considerable tailwind, albeit a little less so as QE tapering will continue. Nevertheless, short-term interest rates will remain very low for at least the lengthy medium term. That is a bullish background but corporate profits need to improve, on average, during the first half of this year, preferably by revenue increases rather than mainly from share buyback programmes. Otherwise, the US stock market will be susceptible to a more significant reaction.Back to top