Turning worms...on thin ice

With the banks absolutely in the doldrums (RBS heading for a price under £1 a share and HBOS bombing by 30p so far today) Flash is still stuck to his long equity position, despite the unpleasantness. There are some positive signs (he hopes..). Yesterday's long position in Intel looks like exactly the right call; Ford is bearing up well; BA's losses have been stemmed by the breakdown in oil; we all knew that inflation was going to be high but perhaps it is the case that the inflationary pressure has peaked, hence the tumbling commodity market as people come out of their long positions - momentum that could rapidly accelerate if there is a break to the upside in equities (although the oil companies and the miners which are such a mainstay of the indices could also be adding to downward pressure as people sell them off).

The one highlight - and a trade that has actually worked brilliantly - has been to short the euroyen cross - which has finally begun to break down significantly. As the euro weakens generally Flash thinks this momentum will accelerate. The yen has strengthened significantly and thus in spite of yesterday's gyrations Flash is sticking to his net long dollar, short euro view. He's currently in the money with a short EUR/USD. Plus his short gold position is beginning to look rather more prescient, but he remains anxious about spikes in oil and the supposed psychological security of gold - but there ain't much psychological security in buying in right at the top, especially if all the other metal and commodity indicators are heading for the downside. So he might just add to his short gold position as events unfold today.

Some regrets - not sticking with the short HBOS, short Dexia view - and generally not keeping enough short positions in place, particularly on the indices. Plain stupidity and impatience as caused him to totally cock up what could have been massive short wins- which would hedge the considerable pain that being long is causing right now.

However it's because of the learning from these past regrets that Flash remains long in a selected bunch of equities, although for now he's on the sidelines as far as trading any of the indices are concerned. On the other hand, this may well be clutching at rather too many straws because his screen is still a sea of red - wriggling downward worms on the thin ice of not really enough margin. But he's still in the game. So - as of 1pm - he is long Ford, Intel, BA, BT, Scottish and Southern Energy, ASOS, Workspace Group, D1 Oils, Lonhro, Firstgroup, Avis, Northern Foods, and his old companions Stanelco and Axeon Holdings. All underwater, but some considerably more than others.He also hasn't yet flogged off his remaining equities - Man Group, IG Holdings, and Tribal - from which he got a very welcome and unexpected dividend this morning. And if - when? - there is a rally he will be very pleased indeed. For the moment, Atkins and Game Group have drowned. As ever he admits to the greedy charge of trading far too many positions at once - but the amounts are small and the margins are as big as he can afford.