Trading journal 17Mar2013

• Interested in seeing how the Cyprus event impacts on the financial markets
• My current view is that it's not a disaster, market will retreat to a point and then rebound to the previous level; Nothing really changed, if the market respond too much to this event, that implies that previous high is a bubble. Unless the bank run occurs, market will be back to the previous level within half a month or even shorter.
• Wolfgang's view is pretty much all negative, it makes sense that, even this bailout doesn't change anything fundamentally whatsoever,  the confidence shift is a real thing to worry about. Mr. Draghi and Central bankers will definitely lose their credibility and in game theory terms, creditors are rational to have a bank run because the ECB had already started it.
• What would I do if I'm trading: flat on everything until I see the sentiment.
• Ramsey reading:
• Fundamentals as a trading indicator: when QE is finished, dollar will rally; correlation between equity and commodity and when commodity breaks out this connection, that's the market to sell
• Fundamentals as  a contrarian indicator: when fundamentals look bad for bonds and everyone holds that opinion, yet bond rallies, then there must be a potential bull market for it
• So if my macro assessment is right, the euro/equity rebound and fall in bonds would be a profitable trade, by using his method 
• On short term trading:
• No matter how bad a market looks, it will rebound after it touches a crazy low, but the problem is that will not alway lead to a profitable trade due to bid-offer spread and uncertainty over the floor.