Weekly Review

The rising price of oil was the dominant concern for the market throughout the week starting Monday 2 March. The week began with instruments 'gapping lower' following military action in Iran and sentiment remained subdued all week.

Interestingly, 'the market' tried its best to hold up, the JPY for example didn't strengthen past the initial 'gap lower', the yen and CHF both unusually didn't dominate in the fraught environment, as opposing forces held them back (JPY: Continued government stimulus narrative, CHF: SNB comments suggesting a dislike for a strong franc). Which left the USD and CAD to benefit in what was termed the 'petrol dollar trade'.

Similarly, aside from Friday, the S&P held up remarkably well throughout the week. Perhaps Friday's drop was NFP induced but it never ceases to amaze me how strong daily support and resistance can be. Friday's S&P close at 6735 has held since 18 December, I feel the need to insert a picture here:

It was this support that kept me from placing an NFP 'risk off' trade on Friday. I'm very intrigued to see if it holds this up upcoming week, if support breaks, it could be a swift drop to 6555.

Whilst the market grapples with the implications of higher oil prices, until we get some very good news, I'll begin the week with a 'risk off bias', I don't say that very often.

In other news, really, there is no other news, everything is tied to the oil narrative. Aside from Friday's brief drop, US yields rose in an 'infation shock concern'. The poor NFP headline number and the 'split FED' are unlikely to bring US rate cuts forward anytime soon (despite what Mr Mirran thinks). I wish I could say 'long the AUD' thanks to the continued hawkish RBA narrative but the negative environment is likely to hold the AUD back.

On a personal note, I think I was right to switch to a 'risk off' bias, particularly long USD. But my mistake this week was 'chasing the move', two NZD USD short trades were both taken on what could be described as 'stretched charts'. Tuesday's trade stopped out and Thursday's trade was closed at break even before end of day.

Any 'risk off' trades I place this upcoming week will be following a pullback, preferably a 1hr chart pullback.

'hopefully', this time next week, I'll be saying everything is fine and it's back to 'risk on' trades. Only the future knows the answer.

Results:

Trade 1: NZD USD -1

Trade 2: NZD USD 0

Total = -1%

Total since start of blog = +54.6% (risking 1% per trade)