Trading With Wolves

The swings of the past week serve as yet another healthy reminder that all markets work on a zero sum basis. After all Martin Scorsese called it the ‘Wolves of Wall Street’ for a reason – not the bears or the bulls of Wall Street. However the underpinnings of what may serve as sensationalistic backdrops for summer blockbusters are what we as traders need to deal with in real life on a recurring basis. And it is a reality (mostly) devoid of hookers, drugs, yachts, lambs, and entertainment slush accounts. Trading should be boring because as soon as things start to get exciting significant losses become a growing possibility.

So the bulls are back with a vengeance, for now that is. I’m still not convinced that the fat lady has completed her repertoire and will remain nimble over the remainder of this month. Which means smaller position sizing, wider stops, and being extremely picky with my entries. I’m having a late start today due to various chores I had to attend to today so all I can offer today is a quick update on our running campaigns.

The ZB short campaign was stopped out at ~1.2R. That’s fine and we may actually get another chance at entry by the looks of it.

My debit call spread in the E-Mini is still rocking and if you take a peek at the VIX in comparison with last week then you know why I didn’t grab naked calls in the first place. Vega squeeze would have turned my positions from winning into a losing proposition. This bounce thus far is productive but until ES 2727 is taken out the bears still have a very good chance of taking things lower. Above 2727 we shift back into a more bullish perspective.

The CL campaign is kind of flopping all over the place but I decided to leave it in place as I very much like the formation on the daily. However it’s no guarantor of success and a stop out is still in play.

EUR/USD was a short entry yesterday and quickly proceeded lower. Unfortunately it snapped right back however and stopped me out at break/even (not 1.2R as shown on the chart – sorry). After that I was kind of observing the situation and if you are a sub then you know that my original plan was to go long on a touch of the ILS of my previous short position.

So when that price range was touched I went long with a stop near 1.234 (got to love that one). However things are unfolding quickly now and I’m advancing my trail to < 1.2463. So yeah, a flurry of activity but nothing lost on the short and a wee bit gained already on the long position. THAT’s what I meant by being nimble 🙂