wow... buy usdjpy, buy spx (or nasdaq), etc..

Discussion in 'Trading' started by scriabinop23, Jul 26, 2007.

  1. that was a 'correction' move to support on the spx if I've seen it. bounce of 1465. thats close enough to 1460 for my taste.

    wouldn't be surprised if we were back to 1550 in 2 weeks.

    and never thought i would say this... the carry trade against the jpy is looking good right now.

    buying some usd against jpy at 118.40... hopefully japanese retail concur.
  2. jsmooth


    Yea i've had that 119.00 usd/jpy level marked on my chart for the past few weeks....50% fib level from this past rally (March to June)....Even if this carry trade is over, i'm thinking we'll test about 122 again (we'll form a nice H&S) then drop drop back dowm to 114.

    As for the equity market, i think we'll test the 14,000 level again (or make a lower high a few 100 points below that) before this "bearish market" is confirmed and continues down even more.

    but then again, we could just continue dropping another 1,000 points, so who knows....thats the reason why we have stops and the discipline to use them.
  3. and just as easily, we could make new highs after this - very quickly.

    as far as the jpy, who knows... if japanese government does nothing to defend their currency, it might just go to 130. who the hell knows. 130 is just as easy as 110. look at historic jpy levels, and its clear japan is fine with a weak currency.

    i just haven't seen that currency adhere to any chart patterns with a meaningful frequency to let TA on it seem worthwhile. Just as likely as your suggested H&S, we could be in a holding pattern between 118.5 -> 124 before a break higher to 130... who the hell knows.
  4. let me add..

    I am buying Taiwan with all hands and fists here. I recommend you do the same. STW is the futures symbol on IB.

  5. jsmooth


    as for the yen carry....hedge funds have been loading up on that trade for years....most of which have average position costs below 110....and it seems that every time we get some weakness or retracement, all they do is put on more and/or add to the position....the people getting killed on that carry trade are those late to the party. And over these past 6-12 months retoric out of japan doesnt seem any different...seems like its going to take more than a few hundred pips to end this trade thats been a huge earner for the hedge funds this past decade.

    Today also felt A LOT like Feb 27, 2007 (the last 400 point drop)...too much panic/fear on the street in a high volitlity market that pretty much been going one way without any retracement.
  6. the BOJ isn't going to be raising rates anytime soon, so the carry trade differential will persist.

    they have been known to defend the rate at 115.00 in the past. If anything they might devalue their currency even more now. To add more global liquidity.