The market is talking out of all sides of its many mouths:

• USD/JPY is rallying and most currencies strengthened against the dollar, except the pound, suggesting a return to the risk trade.
• But……the pound sank..suggesting risk aversion
• But…the stock markets are up, suggesting an increase in risk appetite
• But……. the bond  market is teetering as long bond yields are soaring, an indication that bond traders are skeptical about the future outlook
• But…..gold and silver prices are hitting resistance and falling back, suggesting either technical exhaustion or some return of risk appetite
• But….gold and silver prices are still high, especially for the season, which suggests widespread uncertainty about the economy
• But….jobless claims are down, which is good news for the economy

What does your earnest blogging-trader do on a day like this? She sits on the sidelines and spends the day printing charts of the indices. She also reviews her most recent trading sins and repents. Here’s her mea culpa.

I repent that I entered a trade with panic rather than reason.

I repent that I entered it on a Friday morning before a long weekend (last week) when the markets were thin and volatility greater than normal.  I also didn’t calculate the spread and bought higher than I should have.

I repent that I forgot about position size and just dumped whatever I could into it

I repent that when the trade moved in my favor, I didn’t sell the whole position but left half in

I repent that I didn’t do the fundamental analysis but did a multicultural trade – picking 12 currencies that sounded good to me.

I came out alright, but it was pure fluke.

Your blogging-trader did not lose money. She made a bit. Enough to pay some pressing bills. She should be thankful, but being a trader, she knows that making money on a bad trade, is not the way to go.

Update: Non-farm payrolls came in at negative 345k after an expected negative 525k – signaling that the recession could have bottomed. This should feed the risk trade, which means my multi-currency trade (Koruna, Nordic currencies, and Singapore dollar) should end up alright (I’m a bit in the red now).  The time frame is one more week or two)