Volatility has been the name of the game all year, longer than all year. Trading has been a real hard taks lately and I don’t think that’s going to change soon. In June, the volatility caused a swoon born on FOMC outlook and Brexit expectations. Needless to say the FOMC turned a bit dovish, scared of the Brexit, and they may not have been out of line in doing so. The Brexit did not quite turn out the way people thought, the polls showed stay leading up to the actual vote only to have the actual outcome turn out to be leave. The market reaction to the event was just as sketchy, it sold off hard only to reverse on a dime and rally to what have become new all time highs. The current month will likely see some more volatility, earnings season is at hand and the expectations are not good.
Total Cost Of Trading = $11,000
Total Return = $11,100
Net Return On Investment = 0.9%
June wasn’t my worst month ever and it sure wasn’t my best. I made a total of 20 tips, 5 tips times 4 weeks, and 2 bonus trades for a total of 22 trades. The bonus trades were 3 day trades made on the SPX and gold leading into and coming out of the Brexit vote. Both of those were winners. Of the 22 trades, 12 were winners for a win rate of 54.5%, just barely enough to produce a profit for the month. Total cost of trading was $11,000, total return was $11,100. I didn’t make much profit but I did protect my capital which is the number rule of the game. I can always come back to trade again if I have by wad, if I get wiped out its back to work to save up again.
What Happened In June
First off, the market went on vacation and volumes were very light. After that we had an important FOMC meeting, surprisingly week NFP data, a vacuum of earnings news and the Brexit. The Brexit was the dominant factor, especially later in the month. When fears were high the market would fall, when fear was relieved the market would rally and both driven by polls. The polls that turned out to be wrong in the end when they said Britain favored remain. Needless to say there was quite a bit of churn in the market, driven by knee jerk reaction to unreliable news.
Week One June 6th, 2016
This was the week before FOMC week and the week we got the really bad NFP numbers. This sent the market reeling, spinning sideways into a month spent bouncing between support and resistance. I only won 2 of my 5 trades this week, the SPX and the EUR/USD.
Week Two June 13th, 2016
This was the FOMC week. They were largely expected to do nothing and they did, except for unleashing some overly dovish comments. It was also the week we got BOJ, ECB, BOE and SNB. Basically a vegetable soup hodge podge of banks and varying degrees of concern. Again, I only won 2 of 5 trades, not a great streak, but at least I was able to make up for it later in the month.
Week Three June 20th, 2016
This was the week before the Brexit vote, that is, the vote was on Thursday with results out early Friday morning. Needless to say the results were not as expected and the market went a little nuts. The good news is that I won 4 out of my 5 trades this week, along with one extra trade, helping to make up for the previous two weeks.
Week Four June 27th, 2016
This was post Brexit week and I think we all know what happened then. The market sank hard for two days, hit bottom and then began a crazy rally that has taken the market up to new all time highs. This week I was once again able to win only 2 of my 5 trades, plus one extra trade made on gold after the election results.