Welcome back Meta-Traders.
All eyes were on US Fed Chairman Ben Bernanke this week waiting for Friday's speech from the economic symposium in Jackson Hole, Wyoming. Recall that last year at this time, Uncle Ben starting dropping hints about asset purchases that let to the Fed's 600 billion asset purchase plan known as QE2. With QE2 behind us, and most of the resulting stock market gains gone, what would the Fed Chairman have for us this time?
Nothing much was the answer. Ben's thinking went like this: with Obama in Martha's Vineyard, Congress out on their summer recess, and the big money out in the Hamptons, why should the Fed have to do anything? After all, interest rates are already less than zero on an inflation adjusted basis.
Bernanke acknowledged that the US Credit Rating downgrade probably hurt business and consumer confidence, but he did strike an overall optimistic tone. It was good to see the Fed chairman using the bully pulpit to jawbone the market higher without causing further erosion in the USD. In any case, he effectively kicked the can down the road to the September Fed Meeting which was expanded to 2 days to allow for extra discussion regarding what to do with the remaining tools at the Fed's disposal.
The currency market had a confused reaction, first with a sell off in EUR/USD followed by a rally. In the end, it was an inside week for EUR/USD with all the action taking place within the prior week's high and low. Looking farther back, EUR/USD hasn't had any meaningful price action since April, and that might explain the poor performance in Forex robot's lately. More on that below.
The stock market reacted positively on Friday to end what was a positive week overall, gaining in 4 out of 5 sessions. My stock sales from last week were all poorly timed, with all of them well up from the levels where I sold. On the positive side, Amazon.com (AMZN) had a sharp recovery and was enough to pull me most of the way out of a five-thousand dollar hole in my portfolio. My AMZN September 190 calls gained back about half of their value and i'll be looking to get out of those positions and scratch or better this coming week if I get the chance.
Gold had a wild week with a nasty 8% sell off on Tuesday and Wednesday followed by a key reversal on Thursday and a great buying opportunity for a day trade on Friday. I didn't make any stock or option trades this week since I was out on vacation and away from the screen most of the time. I'm watching to see if gold will re-test the old highs this coming week and may consider going short.
Forex Robots were another disaster this week and my leading account Atipaq Full Portfolio lost a stunning 13% dropping from +40.55% to +27.55%. It probably would have been worse, but my laptop rebooted itself on Tuesday and I didn't get back to restart it until late Thursday.
We had some positive action in FX-Regression and Atinalla No3. Atinalla No4 broke down to a new equity low in a disappointing development. I'm considering some tactics to take profits and filter out trading during non-trending periods in the future. I have some pretty simple rules in mind, but i'm not going to share any ideas without some 10-year backtests to prove the concept.
Overall, its been a pretty rough summer for Forex Robots after a solid first half of the year. It highlights the need for systems which take advantage of sideways and trendless markets.
That's all for now, have a great weekend.
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