Does anyone has a Oct. 98 Yen Intraday chart, which the market tanked 1500 pips in 2 days? I am thinking there might be something like this coming pretty soon, so i want to check the past history for warning signal. Thanks!
Carry trade baby! Is getting crowded. The way hedge funds are borrowing nowadays and selling premiums and everything else is no different than driving the Nasdaq up to 5000. Once it bust, who knows how far the yen and the franc will go if trillions of dollars are trying to cover their position. To me, this is what Taleb has been talking about - Black Swan!
I traded through it. I remember the day(s). We were on longer-term trendline support with many looking to sell a break of the trendline (I think it was around 132 after having come off a high of around 148 a few weeks before). Tiger sold $15 Billion between 12 midnight and 5 am EST on a break of the trendline with reckless abandon. Almost as if they wanted the worst fills. Was a straight line down. I was long and was woken up around 5 am down multiple big figures. I hit the first bid. It was a good sale. The next day was another straight line down. Maybe another 8-10 figures. That was about it. Never recovered and drifted lower for a number of months after that. All of this is from memory almost 10 years ago so it may be fuzzy...
Nice story NTB, thanks for sharing. I don't have an intraday chart from that period but just to put things into perspective I have attached a weekly chart from that period just to show the sort of things that Dollar Yen is capable of doing. What I noticed was a H+S pattern at that time with the head in August '98 (doji star at the peak), shoulder one in June of that year and shoulder 2 in late September building up steam for a few weeks before it rolled over like it did (the high/low in that week was from 135.95 to 111.58 - 2437 pips).
Here is a monthly JPY chart over the decade - you can see that the dollar went up hard (from a low of 79.75 in 1995) and has been trading in a wedge ever since that fall in '98. Seems like 100 is a very strong support level that the MOF will pull out all the stops to prevent dollar yen from trading below this level at this stage. The trendline going back to '98 by the way was tested and rejected only a couple of months back.
Dont get me wrong. The reason for this theard was only asking for an intraday chart. This wasnt a theard about discussing the future of the Yen. The guy asked why i wanted the chart, so i tell him why. Maybe i might as well start the theard under resources.
Besides, there is already another theard discussing it. http://www.elitetrader.com/vb/showthread.php?s=&threadid=81793&highlight=carry+trade Maybe it wont happen at all since it is already on ET.