Meta-Trader - Low and Inside

Welcome back Meta-Traders.

All eyes were on the Euro zone this past week as world leaders worked to contain a potential financial contagion that would be triggered by a Greek default.

In an interview with CNBC's Jim Cramer on Tuesday, US Treasury Secretary Tim Geithner assured the world in the strongest possible terms that he and other leaders would work together to avoid the failure of Europe's public institutions. And work together they did, announcing on Thursday a huge combined "US dollar liquidity providing operation" between now and year end in combination with the US Federal Reserve, Bank of England, the Swiss National Bank and the Bank of Japan.

It's great to see bankers coming together to provide confidence and stability, even if they do what central bankers always do - create money out of nothing and throw it at the problem!

In any case equity markets loved it and we had a strong week with 5 straight up days. Checking the charts though, we have just rallied back to the top of the range. Problems in Europe - and the rest of the world for that matter - are far from over and its always good to keep the weekly chart in mind when looking at the daily chart action.

As for equities it was a tale of extremes. Tech giants Netflix (NFLX) and Research in Motion (RIMM) got crushed and slammed to the downside while Amazon (AMZN) and Apple (AAPL) stepped out to new all-time highs.

Amazon was the story of the week. On Wednesday, it quietly slipped above the strike of my short call contract at $220. On Thursday it took on the prior all-time high at $227.45, but stopped short of that number. On Friday it opened a hair above the prior all-time high and rocketed higher gaining a stunning +12.25 on the day! I was long the stock, but short the $220 call, so I sat - deer in the headlights - and watched it all happen. At this point, there's not much else left to do but wait for the premium to come out of the short call.

Speaking of short calls, my OIH October 130 call expired on Friday and on Monday I will collect $450 premium in each account - not bad for 2 weeks of doing nothing! But I sat and watched the shares gyrate around the strike on Friday. With less than a minute left in trading on Friday, I watched it move in tight fashion around the strike, hoping for a close just under $130 so I get to keep the stock. The close was at 130.10 which means I will probably get called away. Not a problem at all but somewhat less than optimum.

Its a feeling I came away with the entire week. Sort of like a pitch in baseball, low and inside and not worth a swing.

On the Forex side, it was a retracement week, where the USD gave back some of its gains from the prior week.

As for EUR/USD, it made a rally attempt back up to breakdown point of 1.3970, but petered out somewhat short of that target. Teyacanani took a longside trade toward the upper part of the range, and it occurred to me at the time that I would never take that trade since it looked like a rally right up to resistance. That trade didn't work out and EUR/USD rolled back over and closed the week at just south of 1.38.

As for the robots, Atipaq Full Portfolio gave back about 5% for the week after last week's monster gain.

Megadroid Live took a 15-pip winner on Thursday in a quiet week.

My own FX-Regression had a nearly perfect week except for a losing EUR trade on Monday which sent it to the bench for the remainder of the week. This system gained about 4% for the week and is now just short of positive for the year. I'm still convinced this system is a winner, but I don't blame you if you are a skeptic. I've been working on some improvements to FX-Regression, and i'll share them when the time is right.

Finally, I entered CNBC's Million Dollar Portfolio challenge contest which starts this coming week. I'm not sure if my results will be public, but i'll keep you posted. Its a good opportunity to sharpen my trading and investing game and includes both Equities and Currency.

That's all for now, enjoy your weekend.