Gary Comey / Perfil

EURCHF continues it's multi-month decline with the range continuing to tighten into what looks like the apex of a wedge formation. On the one hand there are continuing flows into Switzerland by the many billions per week and at the other hand the SNB selling Francs to weaken their currency and protect their phama industry and their whole export economy also being hurt by the plague. Any time I trade EURCHF I remember the crash of 2014 when the SNB elimated the peg of 1.20 to the Euro which it had sold vast quantities of Francs to maintain. Since then it's behaviour has become more nuanced. They don't announce and level that they are prepared to defend like some sort of military strong point but sort of fight a rear guard action. Fighting, retreating and fighting again. It appears to be a more sophisticated policy. So right now 1.05 looks like where they've been fighting recently. I don't know if they will retreat but again there is the Euro element of this equation too and Christine Legarde has said they she will carry on regardless with QE policies in spite of the German court ruling this week. The point here is not so much that QE will weaken the Euro but that no QE will mean the Euro has an existential crisis and indeed the Euro did rally on her comments. Strange times! Then there is the whole virus thing and the re-opening of economies already underway. The issue is visibility. Nobody knows what a company is worth (especially when they refuse to give forward guidance) and so money is being parked in Switzerland. So on we proceed in an ever tightening range into this wedge, arguably closer to some visibility every day. AUDNZD came within perhaps 10-15 pips of closing for a profit today but it may not let us out this week. Right now close to breakeven on that trade.

[Alpine] Cash April +5.33%. Week +0.84%. As I mentioned last week EURCHF was finishing on the highs and that boded well. Indeed the market did push higher this week though for the time being those higher prices are rejected and so officially the market is still in a process of putting in swing lower highs and lower lows. That said we did not get either a lower low or a higher high this week and so we are stuck hopefully in a bottoming process. The previous lower high was on March 26th at circa 1.0654 and it would be game on if we managed to get back above that in the coming sessions. The Western world is begining to talk about re-starting economies so we'll see what that does to safe haven assets. In the mean-time we've been trading other pairs and EURGBP provided the increase in cash this week.

[Alpine] Week: Cash + 0.89%. EURCHF having put in yet another weekly low is finishing on the highs of the week which is actually encouraging me though the market remains oversold weekly and the range is fairly tight. A higher high in next weeks candle would probably initially target circa 1.0670 and that would indeed be progress. After that is 1.0710 and the trade is profitable. EURGBP continues to make us money and I'm a little disappointed the price action was slow enough that we could not close out a second basket of that this week. That said set-backs in the price have been limited and today is something of an inside day range wise but also a higher close than yesterday. The EURO Council of Ministers Meeting didn't give us the volatility I was hoping for but EURUSD is finishing on the highs of the day and some further Euro strength next week would be useful technically in terms of our big EURCHF trade while obviously increasing the cash further in terms of our EURGBP trade.

Cash has been harder to come by this week. EURGBP's drop from weekly overbought in the high 0.94's into the high 86's took just four weeks and while not oversold the drop was fairly spectacular, puts us close to the weekly 14 period MA, and demonstrates the volatile environment we are in now. Borris Johnson lives to die another day (to quote Bond) and the pair is finding support right now in the 0.8690's in what could be the right shoulder of a head and shoulders pattern. In a sense that is all irrelevant anyway and what is more relevant is that we are 5 trades into the grid and buying after a steap decline. The action is less choppy than last week when we got quick action and profits.

EURCHF is the friend who's overstayed his welcome and just won't go fu*king home. It's now Monthly, Weekly and daily oversold and continuing to put in a series of daily swing lower highs and lower lows and is as low as it's been since 2015. Maybe it's the volatile stock market, the plague and the flight to safety or maybe it's the large red moon, it doesn't really matter I guess. When I buy something that is oversold or overbought there is always plenty of reasons and newsheadlines to prove I'm nuts.

The silverlining is this. 1. When the S&P500 bottomed in 2008 the headlines were at their worst and punters were liquidating pensions at S and P 666. When people talked about Sterling going to parity with the Euro as if it was a certainty after BREXIT, headlines were at their worst and only a fool would sell EURGBP short at 0.98.....right! I think we've past the worst headlines for COVID-19 and while the Italian economy is ruined I think we all know that too as does the ECB, solutions will have to be found even if it's E.U Federal Corona Bonds and this too shall pass. 2. The cash is going higher every month even while EURCHF refuses to ease up. This continues to provide some help with equity. The cash situation in the ALPINE account is 12% higher than on December 31st. 3. Lastly I think this has been a long view operation from the start and in that long view EURCHF is just another notable battle and will be won because of patience and position size. Every overbought bounce get sold and every oversold decline gets bought by thousands of traders yet so many of them lose money. I'm like a broken record but I think it's position size and patience. Many amateurs get bored. Boredom destroys millions of dollars.


Sorry for the long post. To quote Daniel Day Lewis in the movie Lincoln "once I start I get too lazy to stop".

The $1m chip is waiting. I’m almost one third of the way.

Week: Cash +1.56%. Yet we still remain in this EURCHF DD. Pain in the ........Nevertheless the cash continues to grow while we let this pair play out. On April 13th I will 3 months into the EURCHF trade. In that period the cash is up 11.94% and recall the overnight interest on EURCHF is not onerous. One DD reminds me of previous ones. The NZDJPY DD of 2017 when I gave up after 3 months and took a loss only to see within a few weeks it would have been a profitable trade. The USDZAR DD of 2018 which was a little scary given the overnight interest and I seriously considered hedging but decided that was not the strategy. I think the brass tax of this is that it all comes down to the strategy. Does it work? I feel it does and this weeks cash proves it. We are at 4.4% in the middle of the month! Volatility has been our friend in CADJPY and then EURGBP as it should in grid strategy.

Every time I accumulate another $10K in trading capital I take a poker chip from the box and put it on top of the stack. Added my 29th this morning. I think in 2015 I hardly had one chip.

The trading action has been quick in the last 24 hours as the price of oil rose and pulled up the Loonie with it. EURCHF declines are now quite prolonged however the overnight SWAPS are easily affordable. One or two pips will pay for them so it's not like the prolonged DD I had in 2018 in USDZAR where the overnight SWAPS were very expensive causing me to later alter the trading plan to exclude Exotic pairs in future. I think there is still too much fog in relation to global economies and that is why the Franc remains well bid.

I’m definitely happy to be almost at 3% so early in the month.

[ALPINE] Week: Cash +2.11%. Recent oversold conditions have been somewhat rectified allowing me to take some profit in CADJPY as the price of oil somewhat recovered and the fear factor somewhat eased as governments and central banks again print their way out of trouble like they did in 2008/9/10.

The DD is reduced but volatile and sensitive to the pandemic fears. The next shoe to drop could be Italian debt but I guess that's always been a problem. EURCHF is a barometer of fear and stress and while the Franc remains strong the SWAPS in this are not too burdensome for our weekly oversold EURCHF position. What I am thinking here is that the volatility around equity markets and by extension currency markets may give us opportunities. The last time I thought that I bought CADJPY and OPEC collapsed over the weekend weakening the Canadian Dollar so influenced by the price of oil. OPEC is unlikely to collapse again this weekend having already done so and I am long CADJPY again. Indeed if Saudi and Russia come to a truce over a weekend we could benefit from a gap UP. However I am not depending on that but rather just the volatility which in theory at least is good for a grid strategy.

As you know we closed CADJPY in profit yesterday. Guys, given the Zombie apocalypse etc I am happy if people need to make a 15% withdrawal of equity (assuming you are not leveraging me). I had a look around this morning and I don't see another obvious trade but either way I cannot guarantee to be back at cash by month end. As always it's in the lap of the market Gods.

As I said before in December I won't be making withdrawals but these are strange times indeed.

A small withdrawal will buy Disney + for the kids which is easier than home schooling them.

Closed CADJPY in profit. Not that pleased with it but less positions is safer. Especially when it dawns on the Euro traders that Italy is broke.

Anyway it's more money, more equity etc. The Franc is a little weaker given the rally in the equity markets. Hopefully we've seen the bottom there. If you'd just bought the S&P 500 and month ago you would be down 30% so when we get out of this we will be ahead of the world.

Decent rally in CADJPY put me close to disposing of those trades today with a little profit which will reduce risk and leave us just with EURCHF. Alas as we come into the close that market has come off a bit. Hopefully we get to close CADJPY next week but patience is paying off. Equity markets are still trying to form a bottom and things remain volatile and driven by the Virus news which if you are Italian is a human catastrophe by now. New York and California are shutting down and what we really need is some news that lets us see through this to the other side. At that point markets stabilise and the Franc move away from it's oversold levels like CADJPY has. All said a better second half to the week with the DD reducing and we even got close to making money.......God forbid!

QUESTION: Hi Gary, thank you for your efforts. I have a question about stop loss—as there is no hard stop, how much will you risk? Do we have maximum? I’m sending this message as my friends are asking about the possible worst outcome. Good day.15:09


ANSWER: The worst case outcome is that developments over a weekend cause us to lose all our money in a major gap in the markets on a Sunday night. Trading is risky. I am finding it difficult to make predictions about what will happen next and so is everyone else with half a brain but I don't believe the U.S will surrender their energy independence so that's the oil question and relates to CADJPY. My reading of the media is that the U.S administration are holding sensitive talks with Saudi Arabia which no doubt is aimed at raising oil prices.

My second reading of the situation relates directly to the S&P500 which has dropped 25% in four weeks. That puts us at Planet Of The Apes by July and I just don't believe that will happen. Right now I am not inclined to close EURCHF or CADJPY because the betting right now is on the end of the world as it was back in 2008 when people we liquidating their pensions is a blind panic. I think it's time to stay calm. Bad luck has been with the CADJPY trade otherwise the DD is well within soft stop loss levels. Even with the CADJPY it's almost touching those levels but not quite. I am inclined to await further developments, I am inclined to follow my instincts and not panic when all about me are.

Right now the S&P500 appears to be attempting to put in a base around current levels with the 2018 low at 2333. That has not been breached....yet. It would not be unsurprising to see it breached in another awful trading day followed by a massive rally with some fundamental development as the excuse. I am not saying it will happen this way but that would be typical. I feel if I close now with still huge equity it will be close to the worst that it got.

Looks like we could end up closing the week not to far from where we began. To be frank the last few months have not gone according to plan. First we had the GBPCHF DD in November and now we seem to have stumbled into the collapse of the equity markets so the usual plan of buy on oversold has been tested with prolonged flight to safety assets such as the Franc. I thought we could skim a little from CADJPY and earn overnight interest while we waited on EURCHF and stumbled into the collapse of OPEC and CAD is hugely affected by the price of Crude Oil. On the same night as the collapse of OPEC North Korea launched a missile strengthening the Yen further. WOW a perfect storm. Today we find that anyone who has ever bet on the end of the world...or me, was wrong...again. Markets are moving away from extreme levels at least as I write this and governments are starting make hard decisions. With one death the Irish government has closed all schools. The Italian government has closed.....well Italy!

I can point to two things. 1. We are alive, and that's saying something given we've had incredible drops in equity markets even before yesterday's biggest drop in the Dow Jones Industrial Average since the 1987 Wall Street crash (I was 12 years old). 2. A recovery in our position puts us head and shoulders above above the S&P500 which has destroyed trillions of dollars in global wealth.

Although it is far from over what we all need to learn from moments like this is what our risk profile is. Are we "High Risk" guys or are we just "High Return" guys because lets face it everyone is high return. Trading Forex is risky to begin with even in the "low risk" account. My bank manager thinks the sharp ratio in the low risk account is incredibly risky though she is comparing it to buying German government bonds. I for one am prepared to risk it because the returns over time have not been achievable anywhere else in my life. As surely as trading conditions have been difficult they will improve again and I for one will still be there.

Not much room left for opening new positions. We need to see a meaningful change in market sentiment before we can do that.

[Alpine] Week: cash +0.35%. Pesky markets insist on panicking over this virus but I guess it did get ahead of itself. With the VIX at 49 it felt a bit like capitulation so I held my nose and bought deeply oversold EURCHF again. Having not blown up like many traders we have the equity so it felt time to be a little brave. Friday’s can be brutal as investors don’t like holding positions into the weekend.

I’m not saying that it’s all sunshine from here but perhaps there will be a few solid plans next week from the U.S administration and the E.U. It appears that the virus is finally stable in China. Perhaps in the summer we will look back at the panic as yet another panic we overcame. I have good hope that we will get out of our CADJPY positions even while we wait for EURCHF. As I write the final positions in both pairs are showing a profit.

S&P500. This is what the 2008 financial crisis felt like too.

[Alpine] February Cash +1.14%: This represents the worst month since January 2018 and we end it in a DD. Risk correlated assets are having a volatile time but are mostly increased in price. What saves us as always is position size. Individual days are largely random and depending on news flow about the Corona virus. Lets face it this will be a pandemic if it is not already one. Our particular interest is in how it affects financial markets and on that score I feel governments will try to backstop the selling before the stock market itself becomes a systemic risk. A March rate cut by the FED is already fully priced in before they even open their mouths. The S&P 500 sliced through the 200 day M.A and stopped at the next support level being the October 2019 low. In fairness markets had gotten way ahead of themselves so I guess if it was not the Corona virus it would have been something else. I am not a doctor but I know a little about markets and this too shall pass. I don't know what the excuse will be for the retracement, the FED, the White House or some other news flow but all of a sudden prices will look rediculous and the market will retrace because guess what? The markets have gotten a way ahead of themselves on the downside too. I'm glad not to be one of the traders who blew up this week. If I get hit by a bus tomorrow my last two words are "position size".

S&P500 now getting close to significant multi-year support. If the market begins to stablise here perhaps we will see less need to hold Swiss Franc's. The dollar appears to be seen as a safe haven too and so a rally of the Euro against it will also help our EURCHF trade.

As I said before I buy when over sold and sell when over bought so I deliberately get myself into these situations. When a currency is oversold or overbought there is usually an attached headline to tell you why and the headline makes me seem nuts to be doing what I do. :-) The trick as always is position size.

BREXIT being a perfect example.

[Alpine] Week: 0.51%. Trading is a funny business and since GBPCHF late last year it's been tougher to make money. This too will pass. This morning's French and German PMI data showed that the Eurozone while definitely not humming along, the state of affairs was not as bad as forecasts suggested. Aside from a brief rally nothing happened until the U.S session kicked off and the Euro found a bid against a few currencies, AUD, JPY, & CAD and it's move against the Greenback allowed us out of our single EURUSD position there. Still a game of two halves because the safe haven CHF did not relent even while the safe haven Yen has been busy dropping several hundred pips against the Euro in the last few days. Frustrated? Annoyed? Impatient? That's understandable but if trading was easy.........

[Alpine] DD 18%. Pacific and California DD's circa 8% and 3% respectively. There's a gap in EUR/USD down to circa 1.0780 however the market is only 15-20 pips away from that support right now. This EURUSD decline is pulling on EURCHF. If 1.0780 holds on EURUSD perhaps......just perhaps we are close to the bottom in EURCHF in spite of the elliot wave analysis doing the rounds.

I have an admittedly small private account where I am now doubling my exposure and buying EURUSD too. Not for the faint hearted. That said I can do a lesser version with the Blackwave accounts with combined $275K.

Therefore given the extended nature of the EURUSD move and despite the correlation I am going to place one EURUSD BUY ORDER and NO MORE.

[Alpine] Week + 0.34%. Obviously the predominant issue is the prolonged position in EURCHF though off the lows today but still deeply oversold. Until the DD improves the focus is capital protection so I’m not likely to open a new pair.