OMG... why? Why? I need to tell my portfolio to behave! Skip my JNSB is you'd like and scroll right to the chart of the matter.
Oh, I have my 28 cm Hermes Kelly Sellier in black box calf leather with palladium hardware, by the way. I didn't bring the wrong amount of cash or anything bimbo of the sort. In fact, the sales representative reinforced my purchase decision by complimenting me on how I am totally the Hermes Kelly type. Obviously, she's never read my blog.
It especially seems like a total hollow victory after evaluating my mediocre performance over the past few weeks. And to make matters worse, having it in my hands made me realise the Hermes Birkin is the one I really, really, really want. I'm already dreaming about a bespoke two-tone Hermes Birkin in blue jean togo leather with contrast stitching, canvas, and palladium hardware. It's not that I don't like my Hermes Kelly. It's perfect for business meetings, but it is a bit of a structured bag and I have a frazzled, beautiful disaster type of style. It's also a bit of an impractical bag. I keep pushing all the wrong buttons lately. Not just one - all! I'm asking myself do I know how to appreciate what I have? And I ask myself... will I finally get my hands on the Hermes Birkin that I really want?
Since this Gold-diggin' PIIGS + European Debt Crisis + Hung Parliament + Wrong-Button-Pressin' Incident, my portfolio became # 1 Drama Queen and swooned under pressure. Was it a computer glitch or human error? And for the like-minded cynics out there, was it a deliberate act of bwahaha HTEL triple-A rated evil designed to fake everyone and their word to your mothers out before the biggest rally to hit Wall Street hits? Sorry, Mommy Mom, I didn't mean you!
-11% on the standard brokerage
-24% on the Roth IRA
-952.6 pips on the forex trading account
My only saving grace was selling a partial position in BAC after analysing some options chains and realising I could potentially buy back between now and July at around the $14 or $15 level. So, I sold at $17 something, even if it wasn't at the recent top. But I am a woman with a long term rose-coloured vision, so I'm going to buy more C when I get a chance.
I'd like to now take you through how I forked over my moola to the forex market, who told me, "keep the change," with just two trades. This was a longstanding pipless marriage and I hedged myself with a USD/CHF long at precisely the wrong time at precisely the wrong level. And I was hanging on and on to a trade that I thought would be Hung Parliament defying.
Recall when the market first started really getting panicky over the European Debt Crisis. This was about the 1.52 something level on GBP/USD about the time of 11 April 2010, where I saw a beautiful contradictorian bearish divergence formation. Some news on a bailout came out that weekend and plucked everyone up to the high 1.54s on the Sunday open. I waited for a retracement and S&R'ed at 1.5443, only to realise if I had stayed in my GBP/USD short, I would have still been able to make money a day or two later.
Still, there were a minimum of 5 touches higher than my entry thereafter, but because I was looking at a Weekly Chart where we had some bullish divergence going on, I thought I'd be able to ride this up to at least last year's high of 1.70. I got really worked up with the APKS Woman Who Rode the GOL's Trend with An Account the Size of a Bike fantasies with the potential double bottom that was forming on the Weekly Chart. The bullish divergence turned the stove right on and I thought seasonality was on my side!
In hindsight, a few milestones should have signalled that the writing was on the wall and I have to admit, Happy Shiny Forex Traders, I have sinned! Even up until 27 April, the Guys of London were still touching my 1.55 erogenous zone and I thought we'd finally get some rapid consummation to the upside when they Wham Bam Thank You Ma'am'ed us with a break below the 1.54 zone, which was also very smokin', due to some Fraidy Cat Hung Parliament Excuse. The market pronounced us Ran and Strife. I know how bad that one is, OK?
So, how should I have seen the writing that was clearly and avidly on the wall?
First, FOMC resulted in a USD positive move. When is Bernanke ever USD positive? Shift in sentiment right there, but I was blinded by love.
People stopped looking at UK data because it was just so poor and started getting fraidy about the GOL's Hung Parliament. Who knew it would be so big and get so out of hand, causing me to run my bike right into the proverbial 18 foot pole? The truth is, if the market thinks it's big, it doesn't matter if it's actually big. Perception is what matters and in this case, poor UK data + Hung Parliament = trend on trend, but I was blinded by the promise of risk:reward.
Technically, the break below 1.53 should have told me to hit the golden parachute. I had that level drawn on my Weekly Chart and ignored it due to TETSOB and because 1.54 and 1.55 were still in play.
So why should I even listen to myself right now? I have no idea. All I know is that if I traded myself into this, I can trade myself out of it.
This Weekly Chart bullish divergence is still on according to me. At the end of the day, lack of money management and TETSOB in overdrive killed me. I thought the USD/CHF long would save me, but my premonition of a temporary shift in correlation between GBP/USD and USD/CHF hung my account out to dry.
Here's the chart that will hopefully unpluck my heart and my trading account.
You will notice that the MACD, RSI, and Stochastic bullish divergences are still strong and we are on our path to the beautiful formation of a double bottom. So I ask myself what is the best way to get back into this trade? And I ask myself... if this European Debt Crisis news gets further out of control, will we test the 1.35 level on GBP/USD? Because if Lehman caused a move to 1.35, then this European Debt Crisis excuse should normally cause a retest of that area - or even break below it. However, we most likely will not see 1.35 as the Greece bailout legislation process is now taking momentum.
Tomorrow's effing BOE and I got plucked out of my GBP/USD long with a flippin' fakeout that retraced a minimum of 300 pips to the upside on the market close. I helped the market with the plucking by hedging myself with a USD/CHF long, which tied up some more capital and caused the deterioriation of my bike to accelerate. I ask myself why I got hit at the market's lowest point. I ask myself why I didn't take action earlier when the market touched 1.55 or above a minimum of 5 times. When I look at it that way, I know I've got no one else to blame but myself.
I am highly disappointed in myself, frustrated that I couldn't even make it to BOE after weeks of being in this pipless marriage and I want revenge and I want it now. But it might be better for me to wait. Will BOE calm the GOL or will they keep running downhill to 1.35?
I don't know yet. All I know is that if I stop trading now, I'm done for good. If I develop some semblance of a calm, cool, and collected c'est comme ca type philosophy, it will work to my advantage. I walked into the year with a winning attitude and I'm not going to walk out a loser.
It's no secret that I favour crazy strategies, so with European currencies at such favourable levels, it's now a good time for US investors to make investments in undervalued, overlooked European financial stocks. And once this process takes hold, European currencies will have to strenghten against the USD again. It's also a good time for China to buy EUR if they are looking to diversify their USD holdings. Patriotism aside, look long and hard at US debt levels and tell me that's not scarier than a European sovereign debt default. When it comes down to it, the majority of the industrialised world is in debt, so who can you trust... Gold-diggin' Sinks?
For now...
Men of New York = still waters run deep
GOL = Fraidier Than Moi
Guys of London, we're better than this one forkin' trade! Shall we run their stops now? Oh, but you guys look so tempting at the 1.45 level...
I should like to touch that, but I will wait to see if you're naughty or nice...
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