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Aussie Pairs

  • #1,601
  • Dec 8, 2007 2:33pm Dec 8, 2007 2:33pm
Quoting DutchTrader
I think the Carry is going to take a bath this upcoming week.
Well I can't argue with your highly detailed & in-depth analysis you provided to come to that conclusion..


I'm surprised by how little attention was paid (among the TA/chartist circles) in the past two weeks to UJ successfully testing its 13-year trendline, it's not everyday such a level enters the equation. A huge buy-signal with a terrific R/R ratio. So far it's returned 270 pips. Friday also formed the breakout of a reverse H&S pattern on the daily chart. UJ (and by extension, the entire carry trade) hasn't looked looked this healthy in months.

That combined with the Bush/Paulson mortgage rescue and the historical statistical implications for the mid-December - early January period, I can't see odds favoring the bearish play in the next few weeks.
  • #1,602
  • Dec 8, 2007 2:36pm Dec 8, 2007 2:36pm
Quoting Trader KGB
Well I can't argue with your highly detailed & in-depth analysis you provided to come to that conclusion..


I'm surprised by how little attention was paid (among the TA/chartist circles) in the past two weeks to UJ successfully testing its 13-year trendline, it's not everyday such a level enters the equation. A huge buy-signal with a terrific R/R ratio. So far it's returned 270 pips. Friday also formed the breakout of a reverse H&S pattern on the daily chart. UJ (and by extension, the entire carry trade) hasn't looked looked this healthy in months.

That combined with the Bush/Paulson mortgage rescue and the historical statistical implications for the mid-December - early January period, I can't see odds favoring the bearish play in the next few weeks.


I just thought I'd do a drive by post. My reasoning for the carry taking a break is fundamental. I don't believe the fed will rescue the market with a .50 bp cut, as NFP came in strong, regardless of which chef prepared that dish. So with the .25 already priced in and a Dow clearly not out of the woods yet I THINK/BELIEVE/DESIRE, some bearish possibilities in the carry.
Patience + Humility + Study = Success
  • #1,603
  • Dec 8, 2007 2:58pm Dec 8, 2007 2:58pm
Quoting DutchTrader


I just thought I'd do a drive by post. My reasoning for the carry taking a break is fundamental. I don't believe the fed will rescue the market with a .50 bp cut, as NFP came in strong, regardless of which chef prepared that dish. So with the .25 already priced in and a Dow clearly not out of the woods yet I THINK/BELIEVE/DESIRE, some bearish possibilities in the carry.
The market priced in only a 25bp move after the NFP, odds of 50bp dropped to only 24%. UJ rallied.

I've mentioned this before, I think we may see a decoupling of UJ from the other crosses if the dollar continues to rally. We've already seen it outperform GBP/JPY, UJ is up 4.1% since 11/26 vs GJ at 2.2%.
  • #1,604
  • Dec 8, 2007 2:59pm Dec 8, 2007 2:59pm
Quoting Trader KGB
The market priced in only a 25bp move after the NFP, odds of 50bp dropped to only 24%. UJ rallied.

I've mentioned this before, I think we may see a decoupling of UJ from the other crosses if the dollar continues to rally. We've already seen it outperform GBP/JPY, UJ is up 4.1% since 11/26 vs GJ at 2.2%.
I think I said that as well, and I agree.
Patience + Humility + Study = Success
  • #1,605
  • Dec 8, 2007 3:04pm Dec 8, 2007 3:04pm
Quoting DutchTrader
I think I said that as well
Sorry, didn't mean to take all the credit. Should have said "as we both discussed before".
  • #1,606
  • Dec 8, 2007 4:05pm Dec 8, 2007 4:05pm
Quoting Trader KGB
Sorry, didn't mean to take all the credit. Should have said "as we both discussed before".

I really enjoy your sense of humour, but on a serious note. I can see the other carry pairs taking a dip as the UJ prospers. If you notice the GJ, and UJ correlation isn't as hard and fast as it used to be. Imvho the UJ is less correlated to the equities then the others.
Patience + Humility + Study = Success
  • #1,607
  • Dec 11, 2007 1:34am Dec 11, 2007 1:34am
Does anyone know where to watch/listen to the Sydney Institute's sessions? I'd be curious to know what specifically Stevens said today to make the cable jump 50 pips, as well as other pairs (though a bit less).
  • #1,608
  • Dec 11, 2007 5:50am Dec 11, 2007 5:50am
[RBA'S STEVENS] is on the wires and largely talking inflation. The CB governor says that credit strains will likely lead to higher market borrowing costs. Stevens adds that if so this could contain inflation, even without a rate rise. Stevens admitted he was still concerned about inflation, however, given price data and apparent strength of demand.
Patience + Humility + Study = Success
  • #1,609
  • Dec 11, 2007 1:29pm Dec 11, 2007 1:29pm
Quoting DutchTrader
I think the Carry is going to take a bath this upcoming week.
Did you short 400:1 before the statement and make a killing?
  • #1,610
  • Dec 11, 2007 2:28pm Dec 11, 2007 2:28pm
Is it a short bath or quick bath?

I closed my long from friday and reentered on this dip.

fact remains AUDUSD has room to go up...need it sooner than later now.
  • #1,611
  • Dec 11, 2007 2:31pm Dec 11, 2007 2:31pm
Quoting Trader KGB
Did you short 400:1 before the statement and make a killing?
Short AJ and NJ right now, and it's a merely assault, not felony murder
Patience + Humility + Study = Success
  • #1,612
  • Dec 11, 2007 3:10pm Dec 11, 2007 3:10pm
Headed to 83.00 on NJ
Patience + Humility + Study = Success
  • #1,613
  • Dec 12, 2007 7:50am Dec 12, 2007 7:50am
Hoping I can sit back and let it ride from here. Nice gradual climb. Nothing fancy.....9390
  • #1,614
  • Dec 12, 2007 10:23am Dec 12, 2007 10:23am
Dutch,

Hope you're doing ok, this market is just crazy..
  • #1,615
  • Dec 12, 2007 10:28am Dec 12, 2007 10:28am
Quoting Trader KGB
Dutch,

Hope you're doing ok, this market is just crazy..
I'm, SHOCKINGLY ENOUGH, positive and now long NU from 7790. How are you doing?
Patience + Humility + Study = Success
  • #1,616
  • Dec 12, 2007 11:42am Dec 12, 2007 11:42am
Quoting DutchTrader
I'm, SHOCKINGLY ENOUGH, positive and now long NU from 7790. How are you doing?
I'm flat, was hoping to pick up CAD/JPY at 108 even again (and AU around 8684), but I couldn't make heads or tails of last night's Asian rally (especially in the loonie, which rarely moves so much during those hours). I have a STRONG feeling the smart money was tipped about this central bank coordination (it would've been been very hard to keep secret with 5 central banks involved). There was no other news to explain it. Bloomberg was trying to pin the yen's weakness on year-end bonuses, some $2.3B to be invested off-shore. Give me a %$# break, $2.3B is a hardly a sneeze in the FX markets. The Nikkei snapped back 200 points, S&P futures shot up +10 and the Aussie and kiwi pared half their losses, all on no news, something was amiss..

This central bank coordination was obviously in the works yesterday (the US Fed didn't work overnight, or suddenly plan it all by 8am this morning). They should have announced it yesterday along with the rate decision. I can't imagine how much the in-the-know banks must have made, +3.7% on NJ speaks volumes of heavy handed short covering.

I'm glad you were able to make it out relatively unscathed. I had a feeling it was a blow off bottom, and now a blow off top, so I'm more inclined to fade these moves at first. CAD/JPY is off some 120 pips in the past hour, I guess I'm a little late for fading that..
  • #1,617
  • Dec 12, 2007 11:53am Dec 12, 2007 11:53am
Quoting Trader KGB
I'm flat, was hoping to pick up CAD/JPY at 108 even again (and AU around 8684), but I couldn't make heads or tails of last night's Asian rally (especially in the loonie, which rarely moves so much during those hours). I have a STRONG feeling the smart money was tipped about this central bank coordination (it would've been been very hard to keep secret with 5 central banks involved). There was no other news to explain it. Bloomberg was trying to pin the yen's weakness on year-end bonuses, some $2.3B to be invested off-shore. Give me a %$# break, $2.3B is a hardly a sneeze in the FX markets. The Nikkei snapped back 200 points, S&P futures shot up +10 and the Aussie and kiwi pared half their losses, all on no news, something was amiss..

This central bank coordination was obviously in the works yesterday (the US Fed didn't work overnight, or suddenly plan it all by 8am this morning). They should have announced it yesterday along with the rate decision. I can't imagine how much the in-the-know banks must have made, +3.7% on NJ speaks volumes of heavy handed short covering.

I'm glad you were able to make it out relatively unscathed. I had a feeling it was a blow off bottom, and now a blow off top, so I'm more inclined to fade these moves at first. CAD/JPY is off some 120 pips in the past hour, I guess I'm a little late for fading that..

Hell yeah someone was tipped, and goddamn it its time someone tips me off. I still don't think we're out of the woods yet. Aud having a hardtime with 8900
Patience + Humility + Study = Success
  • #1,618
  • Dec 12, 2007 12:04pm Dec 12, 2007 12:04pm
Quoting DutchTrader
positive and now long NU from 7790
I read that quickly and thought you said 7900! 7790, you must've reversed that long pretty quickly, good trade.
  • #1,619
  • Dec 12, 2007 12:16pm Dec 12, 2007 12:16pm
Quoting Trader KGB
I read that quickly and thought you said 7900! 7790, you must've reversed that long pretty quickly, good trade.
Yeah I was short, then long, i felt like i was on an amusement ride. Not sure what is going on might hang here and scale down because this market does't look like they trust the CBs
Patience + Humility + Study = Success
  • #1,620
  • Dec 12, 2007 12:38pm Dec 12, 2007 12:38pm
Quoting DutchTrader
Yeah I was short, then long, i felt like i was on an amusement ride. Not sure what is going on might hang here and scale down because this market does't look like they trust the CBs
You can't trust them. There must be a whole pack of bond traders who got killed today.

Before going to bed last night, I thought to myself how I could never hold a leveraged short carry trade in this environment with 100% conviction, for fear that the Fed might come out and do something completely unexpected. Sure enough, it happened today!

Imagine if this plan hadn't been leaked in the Asian/Euro sessions, if they kept a tighter lid & just dumped the headline at 9am, what a frenzy that would've been, watching the crosses gap higher 300-500 pips in a matter of seconds.. The Fed did something similar back in 99/00 with an unexpected, inter-meeting 50bp move during the trading day, all hell broke loose..
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