| Author |
Message |
     ingot54
Member
Username: ingot54
Post Number: 1710
Registered: 05-2004
Rating: N/A
Votes: 0
|
| | Tuesday, February 27, 2007 - 10:02 pm: | 
|
Lafee
Is this an assessment based TA, or possible news, or your own personal method?
I had thought that the lack of response to the raising of rates by BOJ was underwhelming to say the least.
As posted earlier, perhaps the action is a hang-fire - everyone is waiting for the others to be the first to blink, and it will be on for young and old!
On the other hand, looking at the run-up the pairs have had, maybe it is just the cyclical move to the other end of the range now?
Ingot - who is wondering what moves the earth!
Keep Smiling - Don't look back
Trading style: Chartist Artist _ Breakouts and Shakeouts.
|
ingot54
Member
Username: ingot54
Post Number: 1711
Registered: 05-2004
Rating: N/A
Votes: 0
|
| | Tuesday, February 27, 2007 - 10:28 pm: |
|
This came to me care of one of the members of the forum who may prefer to remain anonymous, but I also get it through the Eureka Report from Alan Kohler (this particular item amy or may not appear there, but frequently Dr Shane Oliver contributes to the Report):
Interest rates are likely to increase very slowly
While the recovery in the Japanese economy looks durable, the process of raising interest rates towards more “normal” levels of 2 to 3% will be very slow:
Leading indicators suggest that growth is likely to be relatively soggy over the next six months or so.
This is consistent with relatively soft machinery orders in recent months and ongoing evidence that it is taking a while for consumer spending to pick-up steam.
Inflation excluding food and energy remains negative at -0.3% for the year to December.
Despite the improvement in the labour market, wages growth remains so weak that unit labour costs are still falling.
Finally, it will be hard to raise interest rates too rapidly when fiscal policy is being tightened. So we think that, while the trend is up in Japanese interest rates, the process is likely to be very slow, and that by year end they will still be no higher than 1%
The Yen “carry trade”
So what does the continuing Japanese economic recovery mean for the Yen carry trade?
Many have argued the Yen carry trade has been a key driver of the fall in the Yen and global investment markets in recent years and that it will be unwound as Japanese interest rates rise causing significant disruption.
Even the recent G7 meeting voiced its concerns in a veiled reference when it noted that “Japan’s recovery is on track and is expected to continue. We are confident that the implications of these developments will be recognised by market participants and will be incorporated in their assessments of risks”.
However, while the carry trade is likely to have been significant, its importance may be overstated. There are several reasons not to be too concerned:
The carry trade is very difficult to measure. While there is a correlation between the recent fall in the Yen and the widening global interest rate differential against Japan, examination of Japan’s capital flows provides a murkier picture.
In fact much of the recent capital flows out of Japan have been from Japanese investors diversifying abroad. This is likely to prove more durable and is very different to leveraged hot money outflows that normally characterise carry trades.
A reversal of the carry trade is a frequently talked about risk suggesting many investors are prepared for it to end and that exposure to it may be less than thought.
The process of raising Japanese interest rates, which are now just 0.5%, is likely to remain very slow and they will be well below those in other countries for some time to come.
For example, even if Japanese interest rates rise to 1% and Australian rates fall to 5.75% by year end, the differential will still be 4.75%. So it will take a long while to justify the unwinding of carry trades.
Finally, it should be remembered that back in 2004 the big concern was the end of US$ carry trades once the Fed started to raise interest rates from 1%.
Here we are several years later with US rates up at 5.25% and yet global investment markets have been hardly affected (apart from the occasional correction along the way).
There is no doubt that increases in Japanese interest rates will create periodic uncertainty, but it is hard to see a major threat to global investment markets from an unwinding of carry trade positions for the next year at least.
Concluding comments
The Japanese economy and share market have entered a durable recovery. However, it is hard to get overly excited about Japanese shares as they remain relatively unattractive strategically.
The ongoing Japanese recovery and gradually rising interest rates are unlikely to pose a major threat to the Yen carry trade, and hence global investment markets for the next year at least.
Dr Shane Oliver
Head of Investment Strategy and Chief Economist
AMP Capital Investors
Keep Smiling - Don't look back
Trading style: Chartist Artist _ Breakouts and Shakeouts.
|
lafee
Member
Username: lafee
Post Number: 318
Registered: 04-2003
Rating: N/A
Votes: 0
|
| | Wednesday, February 28, 2007 - 11:36 am: |
|
USDJPY is getting close to my shorting zone - around 118.90.
The JPY is def. the currency in play. I have potential shorts on nearly every jpy cross. looks like a long week in front of the screen for me.
Cheers
Lafee
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
|
lafee
Member
Username: lafee
Post Number: 319
Registered: 04-2003
Rating: N/A
Votes: 0
|
| | Wednesday, February 28, 2007 - 05:39 pm: |
|
taken short on the USDJPY @ 188.67 target approx 118.00
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
|
wadda
Member
Username: wadda
Post Number: 428
Registered: 10-2002
Rating: N/A
Votes: 0
|
| | Wednesday, February 28, 2007 - 08:11 pm: |
|
Lafee,
Back on Jan 24th you asked a show of hands on who trades currencies...at that time I'd only done one trade and lost a dime, so to speak. Since then I have been moving a bit more to FOREX trading as an option at times when the markets does what it did today.
So, if you're interested I'm long EURGBP from 0.6597 a couple of weeks ago and went long EURUSD yesterday at 1.3240.
I also looked at shorting USDCHF yesterday at 1.22ish.
Cheers,
wadda
"Buy low, sell high is a cliche, not a blueprint for action. It blinds investors to the professionals' approach of buying high and selling higher." Stan Weinstein
|
lafee
Member
Username: lafee
Post Number: 322
Registered: 04-2003
Rating: N/A
Votes: 0
|
| | Wednesday, February 28, 2007 - 08:12 pm: |
|
Ignot,
My method is based on the principle that large momentum is often followed by large volatility. If you focus on the leaders in momentum (ie the JPY in this case), you can be confident that the market will thrash around violently before it will reverse. Therefore, scalping, in the direction of the move at the first substantial rally 9in this case) is a high probability trade. ie. it will most likely test the low if it is going to reverse. If it is going to continue you will be profitable none the less.
Cheers
lafee
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
|
ingot54
Member
Username: ingot54
Post Number: 1713
Registered: 05-2004
Rating: N/A
Votes: 0
|
| | Wednesday, February 28, 2007 - 08:21 pm: |
|
Thank you Lafee.
Looks like the yen put pressure on the carry-trade hedgies, but needed a catalyst to spin out the markets.
It was indeed a hang-fire, and I would be looking to short everything against the yen in the short term.
Long term (8 months) we may even get the yen up to 110 or even 100.
Shane Oliver may have been a bit hasty in saying the disruptive effect of a rising yen was overstated! I wonder what he is saying tonight?
Keep Smiling - Don't look back
Trading style: Chartist Artist _ Breakouts and Shakeouts.
|
lafee
Member
Username: lafee
Post Number: 323
Registered: 04-2003
Rating: N/A
Votes: 0
|
| | Wednesday, February 28, 2007 - 08:38 pm: |
|
Wadda
The EUR seems to be the strongest major atm. I am currently long EURNZD @ 1.8815 with a present target of 1.8914.
We are going to see a large amount of volatility in the equities and the forex over the next few weeks. A short term focus, I feel, will be most profitable. Keep your ears away from the media and follow the NOW.
If gold closes down for the week I will start buying stocks from next week.
Cheers
Lafee
(Message edited by lafee on February 28, 2007)
(Message edited by lafee on February 28, 2007)
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
|
lafee
Member
Username: lafee
Post Number: 325
Registered: 04-2003
Rating: N/A
Votes: 0
|
| | Wednesday, February 28, 2007 - 09:23 pm: |
|
Current Targets:
USDJPY to exit short @ 118.13
EURNZD to exit long @ 1.8895
Cheers Lafee
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
|
wadda
Member
Username: wadda
Post Number: 429
Registered: 10-2002
Rating: N/A
Votes: 0
|
| | Wednesday, February 28, 2007 - 09:33 pm: |
|
Thanks Lafee...my scans showed the EUR to be the most prominent ATM, which you've confirmed. I'm new to playing the FOREX so appreciate your inputs and couldn't agree with you more re avoid listening to the media!
wadda
"Buy low, sell high is a cliche, not a blueprint for action. It blinds investors to the professionals' approach of buying high and selling higher." Stan Weinstein
|
lafee
Member
Username: lafee
Post Number: 327
Registered: 04-2003
Rating: N/A
Votes: 0
|
| | Wednesday, February 28, 2007 - 10:41 pm: |
|
I think it is worth noting that the media needs to give reason for the everything that occurs in the markets. It cannot say that it does not know why the market did what it did. That would do nothing but diminish the reputation of there so called experts. They tend to cling to whatever news has been released thst day - and assume causation.
It suits their purpose but maybe not yours.
Cheers Lafee
(Message edited by lafee on February 28, 2007)
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
|
lafee
Member
Username: lafee
Post Number: 328
Registered: 04-2003
Rating: N/A
Votes: 0
|
| | Wednesday, February 28, 2007 - 11:00 pm: |
|
closed out EURNZD @ 1.8886
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
|
lafee
Member
Username: lafee
Post Number: 329
Registered: 04-2003
Rating: N/A
Votes: 0
|
| | Wednesday, February 28, 2007 - 11:54 pm: |
|
closed out USDJPY @ 118.185. Time to go to bed.
Cheers
Lafee
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
|
|
