- Post setting out what I am trying to achieve with Core Book positioning.
- Risk ON = Short USD/CAD (15% EAR). [Was at 20% yesterday. Limit order to buy 1.0430 was filled when US equities rallied briefly to positive territory last night. Lucky!].
- Risk OFF = Short AUD/USD (3% EAR) and Short Copper (3% EAR) . Waiting to sell S&P (3% EAR intended).
- Thus, current naked EAR = 9% in favor of Risk ON.
- Awaiting 2 further course of action : 1. Limit buy USD/CAD between 1.0330 to 1.0390 for 3% to 6% EAR. 2. Sell S&P 3% EAR around 1120. IF BOTH filled, then will only have small naked Risk exposure.
- Idea is to get close to home (ie Risk ON EAR matching Risk OFF EAR) so that Core Book is risk neutral. Then will sit and wait for superior Canada fundamentals and China tightening/slowing to manifest their impact on Core Book.
- Fortunate that long Gold is behaving like Risk OFF currently to minimize negative impact of naked 9% Risk ON. Skew towards Risk On is because I believe there is a further rally in equities (which will fail) to complete a right shoulder.
- [The long EUR/USD is a separate punt independent of everything else].
- Long term chart trends supportive of above. Crock pot approach hopefully will shield book from short term volatility.
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