Tuesday, March 20, 2007

Aussie Dollar Trading Above 80 US Cents

It hasn't been above 80 cents in a long while. My Aussie Dollar model gave a sell signal yesterday. It's good I'm not trading forex anymore as I would have shorted the AUD and probably gone long the Yen, which would have made things twice as bad! This model is a previous generation model that is not as precise at all as my NDX trading model. One day maybe I will apply this new model to forex. But in the meantime I've decided to take a slow and steady approach to foreign currency management. Over time I plan to move my portfolio towards 50:50 Australian and US Dollars by accumulating savings in the US and transferring dividends and distributions from Aus to the US. After reaching the 50:50 level I would do regular quarterly, or whatever, rebalancing. Currently I am approximately 67% in AUD, 26% USD, and 7% other (global mutual funds that are unhedged or hedged into other currencies).

BTW I just shorted 2 NQ contracts @ 1781.75. The model is still not giving a very clearcut signal, so this is a hunch based on a bunch of stuff. I'll see in the morning whether I should add to it. Maybe this evening already I'll decide to get out of it if there is a very strong rally in Asia.

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