eToro: Weekly Review And OpenBook Roundup

Greek worries took a backseat to Spain’s, which dominated financial headlines this week. The crux of the matter, simply put, is that Spain is beyond redemption -- at current levels, the EFSF could not support a bailout of the size and scope that Spain would require. Can it be saved is but one issue. Does it even want to be saved yet another. Some analysts say that Spain’s dire situation is an obvious cry for help, despite the rhetoric of the Prime Ministry that outside assistance is unneeded.

In the interim, it's been rumored that the government is soliciting the ECB to activate its bond-purchase program to keep the yields on Spanish debt from topping 7%, but the ECB is reluctant to undertake what would likely be a massively scaled undertaking. The government argues that it has made all the necessary reforms necessary to reduce its deficit and that what it needs is time for them. to that end, Spain's politicians believe that they should be “rewarded” for their efforts, not “punished” with higher interest rates.

Consumer Confidence
In the U.S., now that the hoopla of the Facebook IPO has died down, investors had only “regular” news to be concerned with. Last Friday’s report that the Reuters/Michigan consumer sentiment index had edged higher to 79.3 was trumped by the Conference Board’s consumer confidence reading yesterday, which showed an unexpected drop to 64.9 from a downwardly revised 68.7. Lior Alkalay, the senior analyst at eToro, believes that that loss of consumer confidence could stem from a fundamental weakness in the labor sector, as the recent drop in oil prices should have been enough to give consumer confidence a lift.

Markets will focus on labor-sector data as the government releases its official nonfarms payroll report tomorrow. A recent poll of economists indicates that new, private sector jobs could rise to 154,000 following last month’s unexpectedly dismal outcome of 115,000. However, Mr. Alkalay believes that the labor sector’s weakness will become apparent with only about 20,000 to 25,000 new jobs created. Today’s ADP report of 133,000 new jobs fell short of expectations of 148,000, lending credence to his analysis.

The Gurus
Wall Street has been relatively detached from euro zone woes this week and is set to open higher. On the NSDQ100 -- where sentiment remains generally bullish for the tech-heavy index, which includes the likes of Apple and Facebook -- OpenBook trader ndorosolo scored a 14% gain on a closed long position, though he missed on a short DJ30 trade earlier. Italian trader Diavolo80 has had mixed success recently with the NSDQ100, but in the aggregate, a 42.8% allocation has given this trader the highest percentage gain of 2.3% in his portfolio.

For our OpenBook review, we took a look at Spanish trader shikimico who is #1 on the three-month ranking board with a win ratio of 94.8%, profit-days ratio of 60% and gains of 42.3%. The trader already has 150 followers and 27 copiers to his credit. While the trader copies from several of OpenBook’s gurus, the majority of the trades are self-originated. Over the past three months, the trader has allocated 98.9% of his portfolio to currencies trading, with the remainder going to gold (0.6% for a 5.4% gain), silver (0.1% for a 2.5% gain) and the SPX500 (0.3% for a 3.1% gain). The trader’s most profitable pairs have been the USD/CHF (7.9% allocation) and the EUR/GBP (5.6% allocation), which have returned 10.5% and 10.4%, respectively. The trader’s highest allocation at 29.2% has been to the volatile EUR/USD -- his own currency -- which has provided the trader with a 6.4% gain. The trader holds a very diverse portfolio, with profitable positions in the AUD/JPY, EUR/CAD, USD/JPY, USD/CAD, AUD/USD, EUR/JPY, GBP/USD and the EUR/CHF. Only the EUR/AUD and NZD/USD’s allocations failed to profit. Of 759 trades executed over the quarter, 94.7% resulted in a profit. As expected, the trader has a P&L page full of green; for the week he earned a 9.9% profit, for the month, 31.8% and for the quarter 42.3%, with green out through the year. It’s not often that a trader with a portfolio as diversified as this is able to maintain credible profits, so this trader will be a good one to consider for those looking for a guru that trades a wide range of instruments.

OpenBook trader nkhawaja80 from United Arab Emirates is also on the three-month ranking board in position #6 with a win ratio of 87.7%, profit-days ratio of 55% and a gain of 269.7% over the period; the trader’s one-week and one-month profits are also a healthy 63% and 176.8%, respectively. This trader also has a range of instruments traded, consisting primarily of higher risk currencies, with a 70.8% allocation given to the EUR/USD pair for a 16.9% gain. A 7.7% allocation in the AUD/USD is the highest gainer in this trader’s portfolio with 37.4%, but a smaller 2.7% allocation to the USD/CAD pair has earned 25.8%. The trader also has a small 1.8% allocation to oil, which returned 6.8%. Traders who are looking for a guru who takes an interest in commodity-linked currencies could consider this trader.