GalleonFX - 03/03/08 February recap and very encouraging results from new strategies

The month on the whole was somewhat difficult. For the first three weeks the currency markets were volatile and erratic. It was hard for the strategies to find a grip and profit on short lived moves up and down. But by the end of February the markets had become decidedly bearish against the Dollar. We initially profited from this anti-dollar move with many longs on the major dollar paired currencies (EURUSD, GBPUSD, AUDUSD, NZDUSD), and then after many of these reached their predefined profit targets, we profited from shorts on the major Yen paired currencies (GBPJPY, AUDJPY, CADJPY).

In the meantime, the global financial markets (led by DJ and S&P) had continued their decline towards the lows of January, but this did not see the decline of all the currencies across the board, as it had in January, nor did it put us in a problematic predicament as it had in January. In fact, what is interesting is that all our newly implemented “US Index Leading Indicator Strategies” – that is, strategies that generate buy and sell signals upon breakout or reversal pivot points of the Dow Jones or S&P and then transfer these signals to subtlety correlated currencies – performed the best when they sensed the pivot fall of the US markets and placed appropriate positions on major currency pairs to take advantage of this fall. As we indicated from the 02/06/08 update, we managed to create our strongest strategies to date out of the seeming market wreckage of January, seeing subtle and interwoven relationships between currencies and world markets, gold and oil which we had not seen before. When the US financial indexes pivoted on the downside and gold and oil pivoted on the upside, our strategies jumped in with full force, triggering longs on all the major dollar paired currencies in order to take advantage of the fall of the US Dollar – which at this time was falling with the stock market, something it does not always do, though it does usually fall with the rise of gold and oil.

We are confident that that we are now in a stronger and securer position in terms of strategies and leverage than we were in January and we should see more steady and consistent returns moving forward.