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Daily Archives: October 15th, 2015

As this is a sensitive data for the Fed and the world, I decided to put on my straddle on three currencies as follows: –

EURUSD   –   1.1416   1.1436   -1.1456

GBPUSD   –   1.5427   1.5457   1.5497

USDJPY   –   117.90   –   118.26   –   118.56

Core CPI was slightly elevated, overall CPI was flat, jobless claims improved to 255K against forecast of 269K, and Empire state manufacturing came was weaker at -11.4 versus expectation of -7.3.

Overall, USD bias, but the market didn’t move very much.  I took out the GBPUSD order, leaving behind the EUR and JPY order.

Both the EUR and JPY orders were triggered on the Offered side.

I squared the EUR at 1.1370 and the JPY at 118.70 for a trading profit of 46bps for the EUR and a negligible 0.14 yen.

This is what I mean when the event or data is not expected to make the fx market volatile, this strategy of the straddle trade doesn’t really work well.  It needs the volatility.

Want to beat the market? Sell at 10 am, play golf

An old Wall Street maxim says the “dumb money” buys in the morning and the “smart money” buys late in the trading day. But statistics show the opposite is true.
According to Bespoke Investment group, the first half hour of the trading day is anything but “amateur hour.” In fact, it’s the best time to buy and sell.
Bespoke’s report shows that if an investor bought the S&P 500 at the previous day’s close and then sold it at 10 a.m., every single trading day since 1983, a $100 investment would be worth $949 today, making it the single best portion of the trading day.
(Bespoke counted 9:30 to 10 a.m. as a full hour so it could easily divide the day into hour-long trading periods.)
“One potential reason for the strong early performance could be related to mutual fund flows as well as foreign inflows,” said Bespoke co-founder Paul Hickey. “The 1980s and 1990s were where you had strong flows into mutual funds, and when managers got new funds they would just plow them into the market.”

This trend has held up during the current bull market. Since 1963, a $100 investment made every day before 10 a.m. netted $163 today.
After early morning trading, the next best time to buy on an intraday basis since 1983 was between 3 and 4 p.m., according to Bespoke.
So the so-called “smart money” didn’t do that badly, either.
The worst time to invest?
That’s between 10 a.m. to 11 a.m., when investors actually lost money.
Since 1983, buying at 10 a.m. and selling at 11 a.m. turned a $100 investment into $60.
And don’t even think about trading within that hour on a Monday.
Bespoke ran the numbers on days of the week and found that Monday was the worst day to trade. Buying every Friday at the close and selling every Monday at the close since 1983 turned a $100 investment into just $103.
“Black Monday in 1987 sticks out like a sore thumb for the Monday pattern,” Bespoke said in its report. The Dow Jones industrial average plummeted 508 points on that infamous Monday.
The best day of the week for the S&P 500 over the last 30 years was Tuesday.
To be sure, Bespoke cautioned that while this information is interesting, it’s not necessarily actionable.
“While it would have been nice to buy at 3 p.m. and sell at 10 a.m. every day since 1983, this kind of strategy is not practical for the large majority of investors out there,” stated the report.
But Wall Street loves historical statistics, and the data speak for themselves. As long as you wrap up your trades by 10 a.m., you’ll beat the market and still have time to get a round a golf in every day.

I was wondering the past 48 hours why there wasn’t any noise in the media about the UK Claimant Count and Unemployment Rate since BOE, Carney is focusing on raising interest rates next year and not wanting to fall behind the U.S.

I decided to put on my straddle at 4:25pm as follows: –

GBPUSD  –  1.5285   –   1.5315   –   1.5345

When the data came out it was self cancelling because the Claimant Count was slightly higher but the unemployment rate improved.

GBP hardly moved, so I took out the trade.