European Closing Thoughts 17/07/12

Let's have a look at the market:

• Eur/$ future is trading at 1.2229$ -0.46%
• DJ Eurostoxx50 Sept Fut is trading at 2250 -0.09%
• Dax Sept Fut is trading at 0.01% higher to 6576.5
• Gold Futures is tumbling -0.91% to 1577$
• Crude is declining 0.42% to 88.050$

Market evidences suggest that “QE” trades put in place yesterday have been closed after the release of Bernanke's speech.

The Federal Reserve Chairman said “The US Economy has continued to recover, but economic activity appears to have decelerated somewhat during the first half of this year,” and repeated: the Fed is “prepared to take further action as appropriate to promote a stronger economic recovery,” adding that  recent economic data have had a “generally disappointing tone”.

At this point the ball has been thrown to Mr.Draghi :

“The possibility that the situation in Europe will worsen further remains a significant risk to the outlook,” Bernanke said.

On the Macro side just before the Bernanke speech, the Core CPI (MoM) came  in at 0.2% in line with expectations and with the previous reading. The Industrial Production (MoM) reading beat expectations: it was 0.4% versus 0.3% expected and previous reading negative 0.2%.

On the earnings side it's worth a mention Goldman Sachs which added 0.8 percent to $98.48 after earlier rising as much as 2.9 percent. “The fifth-biggest U.S. bank by assets reported an 11 percent drop in earnings that beat analysts' estimates on trading even as first-half revenue fell to the lowest since 2005. State Street Corp., the third-largest custody bank, bought Goldman's hedge-fund administration unit for $550 million. State Street shares lost 4.9 percent.” Bloomberg reports.

Let's put this day behind us, we will now review our trades.

As per our Game Plan we were short DJ Eurostoxx50 Sept future and scared, around low 60s, we were about to be whipsawed on the US Opening, we were able to trade the down-leg.

We made few errors today, a losing trade can be a good trade, a money making trade can be a bad trade too.

Due to the price action we had in the afternoon we closed the trade to early without following the price action but on emotions: few times earlier on, we tried to hold the trade just to see it higher minutes later,the result was that we lost ourselves letting emotions dominate our mind.

The ability to control emotions is everything in trading.

Have a pleasant evening.

Originally posted at www.77sigmatrading.com