Ciara here with the weekly roundup (w/e 21 November 09).

Here’s your trading news for this week;

We currently have 2 open positions (1 was closed yesterday) showing, at close of business on Friday, +70 points (representing  +£210).  These figures include the realised profits on the rollover of 78points and +£234. They will be included in the year to date profits only when the positions are completely closed.

We closed 1 trade this week with an overall result of -£280 profit.

That brings our year to date result on closed trades to +£8,529 (+56.8%).

OK, now on to;

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Al’s Trade Report for the week
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The invisible hand?

It would be fair to say that markets have had a little outside assistance this year… but do the ends justify the means? Maybe; if the alternative is the end of the financial system as we know it.

Still, the effects of doing ‘whatever is necessary’ to support the system will have far reaching consequences and some are already here if you are in the unfortunate position of relying on savings for an income.

The way around this is to take the view that these historic conditions create unprecedented trading opportunities, trading on both the long and short side of the market.

2009 has been a bit of a one sided trade – US Dollar down, everything else up, especially those commodity currencies, the Australian dollar in particular.

The current set up is looking more and more likely for a potentially short term sell off in this ‘risk trade,’ and this won’t be confirmed until there is a decisive rally in the US Dollar.

Studying some charts this week of gold denominated in different currencies reveals that the metal is still trading 10% or so off its 2008 highs in Sterling and way off its highs in the Australian dollar – the shorter term picture here hints that these particular currencies could be in trouble versus gold and a smart trade would be to exchange your holdings of these currencies for gold – given that US$ gold is the ‘leading horse.’

The uniqueness of gold is that it operates to protect from both deflation and inflation – it is effectively real money – a store of wealth.

So, yes there could be and probably will be a near term dip in the price – in US$ terms – but the bigger picture suggests most financial institutions (pension funds and the like) and individuals are still ‘underweight’ on gold as a percentage of their portfolios – so the inflow will continue over the coming years.

I am currently preparing a detailed report on gold – that looks below the surface of the obvious issues and offers a vision of the high level strategy that’ll be needed to benefit from this unique opportunity the financial crises offers us.
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