Weekly Review And OpenBook Roundup

In this week’s review, we turn first to Wall Street, which had been consistently climbing higher on various U.S. economic data points that confirmed that the economy is slowly but steadily being resurrected.

Yesterday, Federal Reserve Chairman Ben Bernanke remarked in a speech that the economy is on a rebound, but he is loath to change any policy that might hinder the recovery, suggesting the endurance of the ultra low rate policy. Despite the uptrend yesterday, the outcome at Wall Street’s close was mixed, with the SPX500 and the DJ30 falling, while the NASDAQ edged higher.

Wall Street will take its cue from the euro zone bourses which are all markedly lower as of this writing, on unexpectedly disappointing news from the manufacturing sector. Trader xjurokx has been profitably shorting the SPX500 and the DJ30 over the past few days, and has an open short showing a 12.64% profit as of this writing.

In the euro zone, it was a week absent of any Greek drama which resulted in steady gains in the European equity markets. That ended today with Markit Economic’s release of March PMI data for Germany, France and the broader euro zone, which all showed a surprising contraction below the 50.0 threshold.

The head economist for Markit said that the data suggests that the euro zone has fallen back into a recession. Besides the DAX, CAC-40 and the FTSE taking a hard tumble, the EUR/USD pair also fell, dropping to 1.3139 at one point before recovering slightly.

The PMI data for China was likewise disappointing, with the HSBC Flash PMI data falling from 49.6 to 48.1. The Chinese government has been attempting to avoid a hard landing, but the continued signs of a slowdown are now likely to at least compel Beijing to speed up their easing efforts.

Unless and until that is done, the Australian dollar will be under pressure. Australia and New Zealand both are major trading partners with Asia, and China in particular, and rely heavily on their growth to generate their own. OpenBook trader zebulon296 closed two positions with Aussie crosses earlier; the AUD/USD pair returned 16.50% while the EUR/AUD pair recorded a gain of 12.45%.

Last but not least, Japan reported a surprising trade surplus in the late hours of yesterday, which floored analysts who expected yet another deficit. While good news for the Japanese government which has been trying to restore the country and economy to some semblance of normalcy following last year’s earthquake, it remains to be seen how it might impact the Bank of Japan’s monetary decisions.

Last month, the BoJ embarked on a major and heretofore successful effort to suppress the appreciating Yen which has been hindering the recovery. Today’s news gave the Yen a boost, but most analysts expect it will be a short-lived one. Earlier, OpenBook guru piethein closed out a short EUR/JPY pair with a 79.06% return, but just managed to snag a USD/JPY short position with a 2.43% profit as it was heading the other way; one other open short in the USD/JPY is already showing a 21.76% profit.

In terms of profits generated, the past six months have been more than impressive for OpenBook guru Malsolo, who has recorded a profit of more than 1125%. While it has leveled out somewhat through the monthly and weekly recording periods, it is nonetheless understandable why this Spanish guru has a rapidly growing fan club of 1639 followers and 551 copiers. This guru has a very diverse portfolio, with 95.7% devoted to currencies trading and 4.3% to commodities.

Remarkably, of the 13 currency pairs that this guru trades, only one pair – the EUR/CHF – has not returned a profit. Within his portfolio, the three smallest allocations – which happen to be in the JPY crosses – have provided the largest returns; a 1.3% allocation in the GBP/JPY has returned 8.8%, 0.4% allocation given to AUD/JPY has returned 5.8%, and 0.5% allocation in the CHF/JPY pair has provided a 5.7% profit.

Conversely, the largest allocation at 22% is to the USD/CAD pair and that has provided only a 1.9% profit, comparatively. In terms of risk, 86.5% of his trades are considered low risk, which is usually tantamount to lower profits; that then is testament to this guru’s trading skills.

One newcomer to OpenBook who caught our eye this week is trader Sultis from the Czech Republic. With a little less than a month of OpenBook trading under his belt, this trader already has 54 followers and 18 copiers and a solid recorded profit of 139% for the month. Of the 78 trades executed, all of which were in the EUR/USD pair, 98.7% of them generated a profit.

It would appear that this trader closely analyzes a position, and then opens it and several more nearly identical trades right behind it. While that strategy could backfire spectacularly, the fact that this trader’s average trade hold time is only about an hour, suggest this trader identifies an opportunity, and seizes it quickly.