Recap for Week Ending 6/29

Well, the market brought it on, and I won! Last week, my portfolio chipped away 5.63%; this week, it grew by 56.25%. I've still got my market mojo, haha. The spot forex market this week was a traders' dream. It didn't matter what commodities or currencies you traded, or whether you were long or short. As long as you were there to accommodate the changing taste of Mr. Market, you made money.

Risk aversion caused a mass unwinding of carry trades from Monday to the close of the New York session on Wednesday afternoon. The yen strengthened against ALL other currencies. In fact, all low-yielding currencies strengthened against all high-yielding. A lesser-known public watchdog had issued an official statement warning the public of a reversal of the apparently excessive weakness of the yen. Everyone took that as cue to book profit on their short JPY/crosses positions and ran for the exit.

Since I had been short CHF/JPY at an average price of 100.41, and hanging on to the position meant I had to forgo about 1-2 PIP's a day in interest payment, I didn't feel comfortable holding it for too long. So when CHF/JPY went from 100.87 to 100.16, (in less than 12 hours), I immediately realized my profit and went short JPY by going long AUD/JPY, CAD/JPY, EUR/JPY, and GBP/JPY. I shorted NZD against USD and also managed to squeeze out a modest profit. Of course, if I had hung on to CHF/JPY and taken profit @ 99.73, the profit would have been more rewarding (in terms of costs and benefits).

Anyway, during the London session Wednesday night and/or the New York session Thursday morning, something incredible happened. News, that U.K. economy isn't growing as slowly as market participants had thought, hit the wire. The global stock markets rallied. Crude oil futures spiked. Thus, the reversal of a reversal began. Risk-averse traders became risk-loving. Gold, which had gone down from 650 to 640 USD an oz., found its way back to 645 and now @ 648.35. The strength of the JPY turned into weakness and the yen-bearish momentum continues. And here we are, exactly where we left off last week. Well, almost exactly.

The only way a trader could have lost money this week was if he was USD-bullish and he had believed that the Fed would raise interest rate yesterday. The Greenback lost ground against most currencies this week, from the Aussie, to the Loonie, to the Euro, to the Cable, to the Yen, to the Turkish Lira! I myself would have lost A LOT on long USD/CAD, if it weren't for the profit booked on rebound from 1.0527 to 1.0614. Again, if I knew the pair would retrace all of its downward move completely, and then some, I would not have closed that f***ing profitable position so soon.

But like George Soros wrote in one of his books, "a high degree of success is often the precursor to a severe setback." I have to be careful.