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FX Intervention Fright Night?

Tyler Durden's picture




 

Whoooosh... or just another DXY flash crash? If this was indeed a BoJ intervention, it is the worst money spent by a central bank in the history of Keynesianism, with a half life of less than 30 minutes. Elsewhere, gold is predictably nearing its all time highs.

 

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Sun, 10/31/2010 - 20:51 | 689618 pachanguero
pachanguero's picture

I just saw that!  Wow that busted through 77 like a hot knife through butter.

76.14 Is where the dam brakes and that IS coming soon!

 

Mon, 11/01/2010 - 00:59 | 689965 Minion
Minion's picture

It's almost like the flash crashes are designed to blow out sell stops of leveraged price chasers.  Terrorize the small traders, shake the weak hands out of the market, then CORNER IT!!

Sun, 10/31/2010 - 20:50 | 689625 pachanguero
pachanguero's picture

BOJ intervention bitches!!!

Mon, 11/01/2010 - 01:08 | 689974 Minion
Minion's picture

Birkenstock Ben will not accept this childish show of rebellion.  Suing Toyota for defects is only the beginning........

Sun, 10/31/2010 - 20:51 | 689627 NOTW777
NOTW777's picture

silver @ new hi s;

Sun, 10/31/2010 - 20:55 | 689628 bob_dabolina
bob_dabolina's picture

Elsewhere, gold is predictably nearing its all time highs.

 

Gold is going down... unless my monitor is upside down.

?

The Iran news was a gift and a harbinger to sell HARD

Sun, 10/31/2010 - 22:30 | 689819 Missing_Link
Missing_Link's picture

/facepalm

Gold is down 2 points right now  ...  after going up around 16 on Friday.

2 points of movement doesn't even qualify as "going down."  That's just normal low-level Brownian motion.

Sun, 10/31/2010 - 23:34 | 689898 doolittlegeorge
doolittlegeorge's picture

up almost 50 bucks from the low last week, too.  i did predict "gold up 50" on SA.  but that was on monday.  i'm giving myself a "ruling in the sand trap allowing for a free drop" to say "yes, i was right because the referee said i was."

Sun, 10/31/2010 - 23:46 | 689915 bob_dabolina
bob_dabolina's picture

Wow..

You predicted something. You are like...Nostradamus or something right?

Like... you are part of the uhm, Illuminati or something?

You really have got the pulse on gold.

How bout 18 months from right now?

Mon, 11/01/2010 - 01:07 | 689971 geminiRX
geminiRX's picture

Silver is on a rocket ride....

Mon, 11/01/2010 - 00:38 | 689946 RockyRacoon
RockyRacoon's picture

You remind me of the guy at the race track waving around that winning ticket.

Ankle deep in losers.

Sun, 10/31/2010 - 20:51 | 689629 Cojones
Cojones's picture

BoJ is scared sushiless of the USDJPY dropping below 79.60. Below that it's unknown territory and it will kill Japanese exports. Lemme rephrase: Take Japanese exports off life support.

Mon, 11/01/2010 - 03:54 | 690027 EscapeKey
EscapeKey's picture

And for that reason alone, there might be further currency intervention coming along the line. And for this reason, there will be people trying to make this exact thing happen.

There's a reason market interventions rarely work out.

Sun, 10/31/2010 - 20:53 | 689634 pachanguero
pachanguero's picture

Gold is always behind DXY.  

Sun, 10/31/2010 - 20:55 | 689642 manhattanjoe
manhattanjoe's picture

DJ says the MoF denies intervention. I suppose they would have claimed responsibility if it had actually worked.

Sun, 10/31/2010 - 20:56 | 689645 Cleanclog
Cleanclog's picture

Big jump Dollar Swissie too.  More like a big burp, and now the distrubed air is gone.

Sun, 10/31/2010 - 20:56 | 689646 bugs_
bugs_'s picture

I'm going to party like its 1894.

Mon, 11/01/2010 - 03:57 | 690028 EscapeKey
EscapeKey's picture

Soon, we'll party like it's 1929.

Sun, 10/31/2010 - 20:58 | 689653 Yits and the Yimrum
Yits and the Yimrum's picture

its pretty obvious Fed's Owners have turned the Fed into an Enron entity; and they when they exited the building and they left the the floor polishers and night watchman (gietner, bernanke etal)  holding down the fort

 

it was like when Argentina went down; you knew that GS and JPM were loading the brinks trucks with bullion and bearer bonds and documents nights before the crash; getting out of Dodge south American style

Sun, 10/31/2010 - 21:03 | 689664 ratava
ratava's picture

nah just another stophunt. retail chumps you are not welcome in this market, leave the smart people with even smarter robots to cannibalize each other.

Sun, 10/31/2010 - 21:04 | 689672 Cojones
Cojones's picture

LOL, true. I got stopped out on my EURUSD trade just yet. 1.3940 just didn't cut it.

 

Sun, 10/31/2010 - 21:06 | 689674 jelyfish
jelyfish's picture

agreed

Sun, 10/31/2010 - 21:16 | 689693 bob_dabolina
bob_dabolina's picture

Or the Franz Ferdinand moment for the upcoming war of currencies.

...the shot that started it all.

Sun, 10/31/2010 - 22:00 | 689773 iota
iota's picture

I'll go with that. Sure as fuck hit mine.

Sun, 10/31/2010 - 23:36 | 689899 doolittlegeorge
doolittlegeorge's picture

Sun Tzu says "good generals destroy with canon but great one's destroy with a feather."

Mon, 11/01/2010 - 06:27 | 690078 iota
iota's picture

Arrrrsooo'

:D

Sun, 10/31/2010 - 21:16 | 689692 pachanguero
pachanguero's picture

bye bye DXY!!!

Sun, 10/31/2010 - 21:18 | 689696 bob_dabolina
bob_dabolina's picture

wrong

Sun, 10/31/2010 - 21:17 | 689695 Downtoolong
Downtoolong's picture

The more I see this kind of stuff, the sooner I'm pulling all my money out of the financial markets and investing it in a lobster farm, even if it's in Kansas.

 

 

Sun, 10/31/2010 - 21:28 | 689715 stormsailor
stormsailor's picture

we had another flash on 10/15 after 1600 hrs.   very rare to see these types of anomolies in the f/x markets.

Sun, 10/31/2010 - 21:41 | 689738 NOTW777
NOTW777's picture

just heard someone on tv bragging recently that fx markets were safe and flash crashes did not happen

Sun, 10/31/2010 - 21:33 | 689725 saulysw
saulysw's picture

Didn't someone in BoJ say recently that FX intervention works best when it's a surprise? Yet another theory going down in flames. Of course, they will probably argue that it didn't work because it wasn't big enough.

Sun, 10/31/2010 - 22:14 | 689803 hognutz
hognutz's picture

haHa!  Where's Krugman? 

Sun, 10/31/2010 - 21:35 | 689728 flacon
flacon's picture

Just buy gold and silver and be done with it. 

Mon, 11/01/2010 - 00:40 | 689948 RockyRacoon
RockyRacoon's picture

Just buy gold and silver and be done with it.

Check, and double check.  Diversifying tomorrow in some more lead.

Mon, 11/01/2010 - 02:48 | 690001 DoChenRollingBearing
DoChenRollingBearing's picture

+++++

Anyone who has a reason to think about the future could do worse than not taking Rocky's advice 100%...

Au, Ag, Pt as well as Pb (and lead delivery systems) is always fashionable advice from us who hide behind rocks...

Sun, 10/31/2010 - 21:37 | 689729 Orly
Orly's picture

Please can we put things into perspective?  Someone sold a whole lot of yen at the open of the Tokyo stock exchange.  Maybe they were front-running the Japanese and Chinese data and they sold a position that required liquidation of a load of yen.  Not a boatload of yen, as would be expected had the Bank of Japan actually intervened.

The spike in the chart above was on another M1 chart- but it is indeed real because the retracement is several candles in duration.  Eighty pips is not a giant move and, in fact, the spike didn't close most of the gaps on the open, though the rumble was felt in all major pairs.

The question is, what was that rumble about?

Sun, 10/31/2010 - 21:52 | 689761 Shameful
Shameful's picture

On that thought, how wild do you expect this week to be?  The election should prove ot be interesting and then the main event from the FOMC.

Sun, 10/31/2010 - 21:56 | 689768 Orly
Orly's picture

Off the chain.

Sun, 10/31/2010 - 23:15 | 689867 Orly
Orly's picture

If I were to lose my mind and trade this news, I would bet that the extreme levels in the Euro and the Ozzie Dollar are in for some kind of correction.

The AUDUSD pair still has a gap to fill at 0.9265.  I'll meet you there and we can have tea.

:D

Mon, 11/01/2010 - 00:42 | 689949 RockyRacoon
RockyRacoon's picture

You guys keep the racket down.  I just lost count on my silver eagles.

Gotta start over again....  one, two, three...

Mon, 11/01/2010 - 00:45 | 689953 Orly
Orly's picture

Wass'yer werd, Rock?

Say, is that a new ZeroHedge symbol I'm seeing in the explorer bar?  On the homepage only...

Mon, 11/01/2010 - 09:29 | 690240 RockyRacoon
RockyRacoon's picture

All that FX talk is distracting.   I only deal in REAL money.

Sun, 10/31/2010 - 21:43 | 689742 NOTW777
NOTW777's picture

passing out candy to kids and thinking the scariest thing for these kids is the government and corrupt leadership;

this crap has to stop

Sun, 10/31/2010 - 22:19 | 689808 Saxxon
Saxxon's picture

Exactly what I'm doing but I think there are things even worse coming up.

Sun, 10/31/2010 - 22:51 | 689845 Cleanclog
Cleanclog's picture

The trick or treaters are so sweet and adorable at our house tonight.  All polite, thank yous, introducing themselves and explaining their costumes.  

They deserve so much better than the future looming.  When will we start to really push back on the TPTB? It is our responsibility!!!

 

Mon, 11/01/2010 - 00:44 | 689952 RockyRacoon
RockyRacoon's picture

Well, ya know, those old horror stories about people giving kids poisoned candy and other fatal items embedded in fruit have stopped.  Those were not the good old days.

Sun, 10/31/2010 - 22:05 | 689783 TheGreatPonzi
TheGreatPonzi's picture

Since the complaint against JPM and HSBC, have you noticed that silver never goes down?

Sun, 10/31/2010 - 22:09 | 689793 eigenvalue
eigenvalue's picture

What about Oct 19 and Oct 21? Massive raids. Nearly scared me to incontinence. :(

Mon, 11/01/2010 - 04:49 | 690046 ratava
ratava's picture

pre-g20 shank, happens every time.

Sun, 10/31/2010 - 22:13 | 689801 hognutz
hognutz's picture

Everyone knows we are toast...

Sun, 10/31/2010 - 22:18 | 689806 Saxxon
Saxxon's picture

Just another Bot running stops.  Caveat Emptor.  In cash w/ popcorn for another 72 hours or so...

Mon, 11/01/2010 - 01:31 | 689983 Minion
Minion's picture

Large traders have started going to cash but made one last ramp on equity futures:

http://finviz.com/futures_charts.ashx?t=DX

http://finviz.com/futures_charts.ashx?t=YM

They've also been ringing the cash register on gold and silver futures:

http://finviz.com/futures_charts.ashx?t=GC

http://finviz.com/futures_charts.ashx?t=SI

 

Sun, 10/31/2010 - 22:48 | 689840 Itsalie
Itsalie's picture

Algos and HFT are causing flash crash in FX market? I very much doubt it - FX is $4tr a day market, much bigger than the focus here which is the equities market. Well over 50% FX still traded OTC. But I agree the Fed has a plan and they are good at communicating it to the big banks (who control the OTC market). Makes sense?

Sun, 10/31/2010 - 22:51 | 689844 CheapKUNGFU
CheapKUNGFU's picture

All your interventions are belong to us... make your time...

My bet is China, hedging something somewhere...

Just sayin

Sun, 10/31/2010 - 23:11 | 689863 putbuyer
putbuyer's picture

Already in stone. The day is here. It starts on 11/3. If you do not own farm land of have an escape route, the containment camps are for you. Get off the grid asap!

Sun, 10/31/2010 - 23:29 | 689890 stormsailor
stormsailor's picture

do you have a source for this?  or is this just a wild guess

Mon, 11/01/2010 - 00:06 | 689930 Cdad
Cdad's picture

He has nothing.  Clearly, team misinformation is saturating the board.  Why?  The FX manipulation is key to an entire market reversal.  So forget what is going on, and never mind your charts.  Tonight, the gig is the establisment of expectations....fasle expectations.

As for that, the dollar is WAY overdue for a correction.  The fact that the Euro is where it is laughable.

 

Mon, 11/01/2010 - 05:46 | 690062 Jeff Lebowski
Jeff Lebowski's picture

November 8-11, 2010 - The web bot warns of a big tipping point, possibly a stock market crash or financial meltdown of some sorts.[15]
•Major catastrophe in 2012 - The Web Bot has gained most of its notoriety for contributing to the 2012 phenomenon by predicting that a cataclysm will devastate the planet in the year 2012, possibly a reversing of Earth's magnetic poles or a small series of nuclear attacks leading up to a major attack during the year. The prediction does not necessarily call for a complete end of the world.[16][17][18][19]
The following come from the Web Bot Project Blogspot report on a radio interview with High and Ure:

•No warfare between Israel and Iran, at least not until November 2010.
•Six very large earthquakes are yet to come during the rest of 2010.
•A major tipping point will occur between November 8 – 11, 2010, followed by a 2-3 month release period. This tipping point appears to be US-centric, and could be a dramatic world-changing event like 9-11 that will have rippling after-effects. The collapse of the dollar might occur in November.
•From July 11, 2010 onward, civil unrest will take place, possibly driven by food prices skyrocketing, and the devaluation of the dollar.[15] No such incident has occurred following that date

Sun, 10/31/2010 - 23:12 | 689864 trav7777
trav7777's picture

the inexorable pull of gross trade imbalance is going to drag those reserves out of the closet; there's nothing that can stop this forever.

Sun, 10/31/2010 - 23:38 | 689902 doolittlegeorge
doolittlegeorge's picture

ooooo.  now THIS is Halloween scary indeed.

Sun, 10/31/2010 - 23:39 | 689904 Caviar Emptor
Caviar Emptor's picture

A flash crash here, a flash crash there....markets are getting rocky! 

The more they try these spook tactics the more they risk spooking people out of the trades they want to favor. 

Shots across the bow are being fired in the currency wars. Things are intensifying. 

Mon, 11/01/2010 - 07:32 | 690097 Miss Expectations
Miss Expectations's picture

"flash crash here, a flash crash there....markets are getting rocky! "

Old MacDonald had a farm

e i e i o

And on his farm he had an Algo

e i e i o

And a flash crash here, a flash crash there, here a crash, there a crash everywhere a crash crash...

Old MacDonald had a farm

e i e i o

Mon, 11/01/2010 - 00:02 | 689928 firstdivision
firstdivision's picture

SPX futures are on fire tonight.  Looks like some people are taking on some risky leverage for Wed.

Mon, 11/01/2010 - 00:40 | 689947 snowball777
snowball777's picture

Kinda like Tyler's Varnish server. <rimshot>

Mon, 11/01/2010 - 00:22 | 689935 Coldfire
Coldfire's picture

DX futures are so illiquid, you can practically push the price just by thinking about moving your stops. It's a clown market.

Mon, 11/01/2010 - 01:07 | 689972 HarryWanger
HarryWanger's picture

China numbers blew past expectations. This is what our market focuses on now. Last week was just the lull before what I believe will be a huge rally on Fed announcement. 

Mon, 11/01/2010 - 01:33 | 689986 Minion
Minion's picture

Most people agree......

Mon, 11/01/2010 - 02:26 | 689995 fuu
fuu's picture

Silver sitting at $25 and gold loitering at 1364. Not a bad way to start hell week.

Mon, 11/01/2010 - 02:42 | 689999 estrader
estrader's picture

made an easy 40k on that.  love those odd hour Yen interventions.

Mon, 11/01/2010 - 04:31 | 690040 labrat
labrat's picture

Failed BOJ intervention?  Maybe not:

Conventional wisdom is that the BOJ comes along, sells a truckload of yen, goes away, and sooner or later the price bobs right back up again.  Conventional wisdom says the BOJ is basically dumb money, helpless against speculative predators.

But, what if the BOJ has turned predator, deciding to TRADE the currency down over time instead of blindly trying to push it down in fits and starts?  Deception and ambush instead of mass confrontation?

Maybe the real story is that the BOJ loaded up on a long USDJPY position over the last few days and then at 8PM EST (relatively low liquidity) dumped a big chunk to clean the order books in an instant, pushing spot up to a large pool of stops in the 81+ area, then offset their entire position in the pool.  If they finally got help from someone who knew what they were doing, they could have HARVESTED A VERY LARGE POOL OF STOPS in that area.  Maybe what they did was a huge success and now they're sitting on a ton of cash just from that one play.  They could use similar tactics again and again.

And, over time use the proceeds to finance a steady downward push on the yen.

BOJ turned predator?

Mon, 11/01/2010 - 04:48 | 690045 steveo
steveo's picture

Chart analysis of every FX pair versus the dollar on 3 time frames.

My hand notes, and rational basis for choices are in the attached pictures.

I looked at all the major forex pairs compared to the USD.

Results were startling. For all 24 Pairs

Short Term Medium Long (over 2 years)

Bullish 17 13 10

for USD

Bearish 0 7 7

Neutral, or 7 4 6
No Data

Then I looked at my off the cuff, Major trading partners, and I included CHF Swiss Franc.

Short Term Medium Long (over 2 years)

Bullish 7 7 5
for USD

Bearish 0 0 2

http://oahutrading.blogspot.com/

Mon, 11/01/2010 - 06:24 | 690075 iota
iota's picture

reply+login=new comment apparently.

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