This page has been archived and commenting is disabled.
Meet My New Rich Uncle
I have a new rich uncle. His name is Uncle Yen, and he is writing me a big fat check almost every day, enabling me to live my luxurious, in your face lifestyle. Not only have I covered the Citation’s fuel bills for the year, I managed to pay for the annual and two engine rebuilds as well. Since my initial call to dump the yen on March 5 (click here for the call at http://www.madhedgefundtrader.com/March_5__2010.html ), the Japanese currency has fallen from ¥88.5 to ¥95.5.
So what’s the big deal, you may ask? It is the way that the yen has shrunk that has been so immensely profitable. It is doing so in a choppy, volatile fashion that has become a day trader’s paradise. Take last Wednesday, for example. Bernanke’s testimony suggesting that interest rates aren’t going up any time soon sent the June futures flying from 106.88 to 107.76. Sell! Then, a few hours later China announced a white hot Q1 GDP of 11.9%. Dive! Dive! I covered at 106.98. Kaching!
I normally don’t engage in this kind of self abuse, and only day trade to keep from getting bored. But, when the guy walking ahead of me keeps dumping hundred dollar bills on the sidewalk, I’m going to pick them up. I have probably taken ¥15 yen out of a ¥5 move.
This is going on in the face of one of the largest short positions in the futures in history, which appeared practically overnight when the yen broke key support at ¥90. For a list of fundamental reasons why you would not pick up the yen, even if you’ve just had six strong drinks and she were the last girl at an out-of-town bar five minutes before closing time, please click here at http://www.madhedgefundtrader.com/April_1__2010.html ).
My friend Dennis Gartman of The Gartman Letter has pointed out an additional headache for the yen (see chart below). Some of the more trading oriented central banks are going to start paring back reserve yen holdings. The only way this is not going to work is if we get another gut churning sell off in the stock market which sends the big hedge funds back into risk reduction mode, forcing them to cover enormous yen shorts in a hurry.
If you have missed the move so far, use the yen strength today triggered by Goldman Sachs’s (GS) fraud accusations to scale into opening positions. And for good measure, buy the leveraged short yen ETF (YCS). Come to think of it, the Citation could also use a new set of tires too.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on the “Today’s Radio Show” menu tab on the left on my home page.
- advertisements -
You got a really useful blog I have been here reading for about an hour. I am a newbie and your success is very much an inspiration for me House Cleaning Red Bank
I have to admit that I have never heard about this information I have noticed many new facts for me. Thanks a lot for sharing this useful and attractive information and I will be waiting for other interesting posts from you in the nearest future.keep it up. car insurance
I find it impossible to Trade this Market.
USDJPY daily and weekly charts are now bullish.
MARKET UPDATES:
http://www.zerohedge.com/forum/latest-market-outlook-0
I guarantee you that once I short the Yen, going all in, the BOJ will raise rates to 2%.
Get yourself positioned accoldingry.
Haha, this article has one star.
Be careful. There seem to be lots of newbies to the market reading this site. I don't trade much forex, but we have been introduced.
If you're tempted to short anything, buying a put or better yet a put spread is safer than a futures position. Stops only attract sharks, squid, and other low life and the executions on the stop may leave you feeling executed. Stops will also greatly reduce your percentage of winning trades. Think about it. You're betting against volatility, in corrupt and volatile markets.
Options require less margin. In the futures arena, margin is a good proxie for risk. Read everything you can find on actual trading as opposed to academic crap. Ask lots of questions, rinse, and repeat. Start with only one contract. There will be plenty of time to get rich after you know what the hell you are doing. The sort of hype in this article always makes me want to puke.
Derivatives are incredibly complex and fast moving markets. They are also a lot of fun, but you will only last if you have patience and discipline. Put ye olde professor's first law of options trading on your mirror, your dog, or wherever you will have to look at it everyday.
ANYTHING YOU DON'T UNDERSTAND ABOUT DERIVATIVE TRADING WILL BITE YOU IN THE ASS! Count on it, and welcome to the great game.
the great game of 85% of traders lose shirts
how ever you slice it .
the loud nose of trading and superficial hammering at the goings on in the financial market . .
hacking leaves , hacking little branches ,
cut the dang root out . then a healing can begin
Just bought some short turbo's myself.
COME ON!! DADDY NEEDS SOME NEW WHEELS!! :)
+10 POINTS. AHAAHAHAHHAA...."WHERE'S...JOHNNY!?"