Thursday, January 12, 2012

Markets display volatility but are clueless about direction

Markets are really schizophrenic and do not have a clue as to what direction they should take. Oh, they do indeed sometimes trend in one direction with great conviction... but only for an hour or two. Not easy to trade in that type of environment. Today was a good example of these "new normal" market conditions. I did try a couple of spread trades during the morning session (long gold/short euro, natgas calendar spread and a missed long wheat/short corn) that, with the markets' schizophrenic behavior, had limited success of course. Again today, crude oil was my most consistent winner. I should have stick with it but you only know that after the facts not before. Although trading conditions were not ideal, I managed to end up in the green for the 4th consecutive day. I cannot complain. Net result +$681 trading 2 contracts (commissions included). Details below. 

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