New Beginnings

So here I was on the 5.51am train out of Surrey heading towards Waterloo for my first day at "Flatcap" inter-dealer brokers. Dressed in a crisp white shirt, freshly ironed Moschino suit, silk Hermes Tie and parade ground polished Cesare Paciotti shoes. There was a sharp tinge in my mouth and I could feel tight knots forming in the pit of my stomach, I was nervous. It had been 5 months since that fateful day when all hell broke loose on our 2nd floor trading desk at Peterborough court. Certain structures were mis-priced and the accompanying I-rate hedges were invalid. Not to mention the fact that certain un-named person(s) were trading way beyond their authority. It felt like it couldn't get any worse but then it did, all those years of studying and obtaining the right qualifications while others partied and got "high" at university, just to reach the rarefied world of this hallowed bank's trading desk, shattered within a matter of hours. Never mind my 5 month sojourn had resulted in re-charged batteries and a far leaner and muscular physique thanks to the local gym. But I digress, as I walked up to reception and notice the stunning receptionist, I inform her Hxxxxx Xxxx is here, it's my first day, she gives me a warm friendly smile and tells me "Charlie" will be down in 5 mins to come get you. Having never met "Charlie" I wonder what he would be like but I didn't have long to wait. I see this squattish man hurriedly walking down the escalator heading in my direction, wearing what seem like horn rimmed Oliver Peoples spectacles. He comes upto me gives me a firm handshake, which I reciprocate and asks me to follow him, my mind automatically ticks into gear I find myself thinking to myself "Welcome to the Jungle" and wonder what I have let myself in for.

Charlie walks at a brisk pace, the kind of pace all young money hungry traders on every trading floor in the city move at. It wouldn't matter if they were making or losing money, the un-written rule is to walk at a brisk pace and look as if you are teetering on the edge of the abyss. We walk into a room where a meeting has already started and seems to be led by the man who hired me. I take a seat and it's the usual morning meeting, we discuss what happened overnight in Asia, the desk strategist throws in his two cents worth of where he see's today's European trading day going, a few people throw some ideas into the mix, which a few others roundly criticise and laugh out. The meeting slowly peters out once the leader of this wolf pack goes out to make a phone call and some of the traders start discussing last night drinking antics. One trader then starts discussing his latest sexual conquest which he quite happily informed everyone was in the back seat of his shiny new BMW M5, I notice a female broker and she seems to sneer at the graphic details of this only for the brokers in the room to pick up on this and to turn their venom and attention towards her. At the moment I feel like I am a guest an imposter in their midst as they haven't acknowledged me or my presence. I keep my ears tuned and eyes wide open trying to pick up any imperceptible clue of Hierachy. In every group of individuals there are people you can shit on and others who shit on you, it's best to identify who is who early so you don't shit on the wrong person and find a P45 heading your way. To quote the great film rounders "If you can't spot the sucker in the first half hour at the table, then you ARE the sucker"

The meeting ends and everyone slowly files out G'ing themselves up for what will no doubt be a gruelling day of wheeling dealing. As I follow "Charlie" out of the room "Adam" (the man who hired me a.k.a the Silverback gorilla, the alpha male on this trading floor ) intercepts me and tells me how great it is that I joined today and all my logons and passwords and databases should be set-up, this is a patent lie as he hasn't bothered setting me up on anything, it's upto me to chase and get this done but I politely nod and thank him giving him my standard spiel of not being able to wait to start contributing P+L wise, he nods and says "yeah you better". I get to my desk and all the nerves and sickly feelings disappear as the warm intermittent glow of my dealerboard and 4 screens shine onto me.....oh yeah I'm back in the cut-throat world of trading, the dream is still alive.

Natural Gas

http://tinyurl.com/ybgzrh2

Work

Haven't posted on here for a while for 2 reasons 1) Started a new role and don't really have the time at the moment to as busy from sunrise to sunset. 2) The name of this blog is misleading as I am no longer a day trader anymore and have nothing else to confess. I will be starting a new more relevant blog to provide a peek into the world of an IDB trading desk and the extra-curricular shenanigans that take place, so to all my readers ( including the lurkers who check my blog to leave critical remarks elsewhere) watch this space...

Cricket

What an amazing game of cricket b/ween Pakistan Vs New Zealand. Pakistan were down and out at 101/9 only for the last pair to put on 103 runs and only to fall agonisingly short ( 7 runs) of claiming an amazing victory...

Weekend

Am meeting up with my buddies this weekend for a night of debauchery in Holborn, then heading to Sketch in Mayfair to hobknob with the beautiful people and to consume of plenty of Grey Goose and Belvedere...ciao!!

Intermission

Been a while since I posted, as I have been studying for my ACA exams. Didn't realise how much work it entailed, anyway the first one is out of the way and I can go back to trading and speculating on the price of Oil and Gold again. I kept my Long Crude Oil trade initiated at 76.2 a while back and that seems to have whipsawed within a tight range, but at last count is well in the money ( approx 80.4) and at 10 pounds a point should reap a risk/reward ratio of 0.5. I regret selling out of my Long Gold position initiated at 1029 too early as I never anticipated a jump to 1090+ so soon in the cycle. Was really expecting 1100-1200 to be tested early to mid 2010.

GS going against the commodity bulls?

Good story over at Metal miner about GS cutting it's trading exposure to commodities. They seem to have done this by cutting their VAR to $27 million and reduced hiring in their commodity department. Think the most interesting thing about this recent run up in commodity prices is the failure of Copper to join in. A weakening USD has failed to re-ignite the rally in copper and many leading commentators believe Copper to be a good indicator of where the commodity prices could be in Q4 i.e stagnant or falling?! Either way My Long Crude oil trade is still paying dividends and I am targeting a exit price of $83 from an entry of $76.2

Mobile Phone troubles

Lost my mobile while on holiday over the weekend. Unfortunately didn't have insurance so now have the headache of scouring ebay for a new phone. Am seeing lots of made in china Nokia 8800 Arte and iPhone's...the chinese really are the masters of forgery !!

Planes, Trains & Automobiles

Got back from a non stop partying weekender in Europe to a dull and dismal UK. Lost my mobile phone on the last night which didn't exactly improve my mood. On landing I discovered trains from Stansted were cancelled and replaced with buses. Once I managed to reach Waterloo, I found out all trains to a certain section of Surrey were also cancelled leaving me to rely on another set of replacement bus services. I truly cannot fathom how much we overpay for public transport and what an under delivery of service we put up with in the UK. So instead of trading today I intend to look at courses to learn Mandarin and routes to emigrate to Canada/Brazil

Holiday

Right I'm off for a quick weekend break. Hope people followed my market advice y/day and made a nice bit of mint for themselves...ciao!!!!!!

Market View

GS earnings out at 12.30 London time. JPM and Intel having driven the Dow over 10k. If GS earnings are as expected or better ( some even saying as high as $6) then I fully expect another leg up in the great rally of 2009. In commodities, Oil seems to have breached it's 200 wk MA of 75.4 and is trading around 75.6. As stated the top of the trading range is the target that needs to be broken for a move up to 79/80 and with the Inventory data due today combined with GS earnings we could have the perfect storm of rising equities, Oil and a falling USD.

Launching a Hedge Fund

Great post over at Clusterstock ( The Business Insider) about how to launch a Hedge Fund

http://www.businessinsider.com/how-to-launch-a-hedge-fund-2009-10#decide-how-much-you-need-1

Black Gold

I see Crude has just penetrated the 75 dollar level, now I don't expect Oil to rise infinitely. But no one can deny the wall of money out there which has driven asset prices higher and lifted commodity prices by ~ 4%. At the moment I am bearish below 76.2 and the initial move above 75 this morning didn't trigger any stop loss buying, meaning most traders still have faith in the 200 wk MA (75.4). But if the USD continues it's sell off and the top of the trading range gets broken (76.2), well then as a rational investor is my duty to turn and join the wave up. Lets not forget GS q4 forecast of USD 85...The inventory data on thursday should provide more insight on the next few moves

Oil

It greases the wheels of capitalism and the world. So here is my opinion on those looking to trade oil. I see an important level of resistance around 75.4 bucks, which also happens to be the 200 day MA. Personally I believe this will hold and could be a good entry for quick shorts. Though beware a break of 76.2 and the 200 day MA level will be invalidated and it will be time to start playing Oil on the long side towards GS 09 year end estimate

Bargaining

Going for a quick weekend break this coming Friday with some University buddies to Latvia. As it's a quick trip and we are travelling via RYA.L we have to pay a surcharge of 20 pounds on each item of luggage ( On a side not I can see this being the new standard for all short haul flights going forward, if it isn't already). So am sharing a suitcase with a buddy of mine and the bargaining that is going into it is quite remarkable. He is only willing to carry half my luggage stitching me up for the rest, now I am having to allot different items of luggage with different friends

Profit

As stated earlier today EUR/GBP needs to break the key level of 0.9330/40, which it has duly done and is now residing around 0.937. Nice little earner, hope others jumped in to clear some nice mint.

Nassim Taleb

Well if there going to dole out Nobel prizes, at least give it to someone with actual achievements. Can't wait for the man's new book. Him and Russell Brand my ideal dinner guests

http://tinyurl.com/yf9r7dw

Trading Ideas

Not posted for a while, but had a few brainwaves and wanted to put pen to paper

1. I expect EURGBP appreciation med term with this ME oil trading story ( replacement of USD withe EUR) more and more countries using EUR as their reserve ccy and GBP suffering from the effects of QE. Next important technical level seen at 0.9330/40

2. Oil from a technical point of view is at a fascinating juncture. It has in effect been trading sideways for a while now, with the occasional break up or down, but has stayed true to the 67-75 range. Now it seems to have broken the mini downward channel it fell into on the 23rd of Sept. But the question is can it maintain and take another shot at the 74.5-75 resistance level? Well the conventional wisdom seems to be that Oil is being supported by a weak USD or the Iranian Uranium enriching issue. Though if I had to stick my head out I am looking to play this on the short side. So look for an initial break of $72, which would have to be validated by a break of around $71.

3. Am keenly watching the major indices, a good/decent earning season could see us breaking 10000 on the dow ( Crazy considering the real economy is in the toilet ). Personally I'm looking for a move till 10350 (as that represents a 50% re-tracement from the all time high of 14100) before I start loading my shorts.

Blackrock

Blackrock take on Wall St

http://www.ft.com/cms/s/0/0709a7c6-9f02-11de-8013-00144feabdc0.html

"Cohiba Day"

Late last Friday was a "Cohiba day" as coined by Fari Hamzei on his twitter page. Oil finally broke its tight range and plummeted towards 69. As soon as it hit my sell order of 71.4, and fell further I knew this was what all the bears had been waiting for all week long....What followed was definitely worth the wait as CL1 fell off the proverbial cliff