The difference a few days make.
A few days ago the “dollar was over” in the minds of the majority in foreign exchange. New high in the Euro, more mortgage banking crisis news, new highs in crude oil. 2 days later, oil dropped 15 dollars and shares of Freddie Mac melt UP!
The dollar rose more on Wednesday, moving further from a record low against the Euro, due to a continued drop in oil prices and a surprise of strong earnings at Wells Fargo & Co calmed the stock market into realizing the sky may not be falling.
U.S. stocks rallied. The dollar got boosted immediately after the Federal Reserve's June meeting showed the belief that the next interest rate move would likely be an increase.
Bank of New York Mellon strategist Michael Woolfolk said that the Fed could raise rates by September.
A $4 drop in oil prices gave more fuel to the rally, offsetting an early report that showed U.S. consumer prices in June rose by the most since the aftermath of Hurricane Katrina in September 2005.
Investors poured into bank stocks, driving Wells Fargo up 32.8 percent, while shares of rivals like Citigroup, JPMorgan Chase & Co and Bank of America Corp jumped 13 percent or more.
Shares of Fannie Mae and Freddie Mac, which had lost more than 60 percent of their value since the beginning of July, were likewise propelled by the broad financial rally, jumping 30% in a day.
Federal Reserve Ben Bernanke's remarks that they are "in no danger of failing" helped people see diamonds where yesterday they saw broken glass.
____________________
The Gbp/Usd and Usd/Jpy trades are still working, but their profits have diminished substantially. We have two days until our exit.
The following are the remaining FirstStrike trades:
- Gbp/Usd: Long @ 1.9906, stop 1.9846. Trade in progress.
- Usd/Jpy: Sold @ 105.95, stop 106.55. Trade in progress.
Current equity is $729.93.
Joel Rensink
www.infiniteyield.com
PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to: newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!
1 comment:
I believe I read somewhere here that once a position goes in your favor 3x Risk that you can go to BE because it's "illogical" to take a loss at that point. So I did on both JPY and GBP. Did I misinterpret your statement?
Steve
Post a Comment