USD/JPY Discussion

Again you are correct in your observation and if it turns out that way, there is your edge. The way I trade it from a Strategy Point is to decide how much capital I want to put on this Trade Plan based on my or your observations keeping other factors in mind.

So if your Trading Capital is $25,000 US Dollars and keeping to my rule of not using more than 20% of your capital or $5000 or 5 positions in this case.

Then my strategy would be to short one position now at 103.833 and then wait. If it goes up further and no new news a second position at 103.98 would be OK. Then wait. A Stop would be put at 104.10 and the second one at 104.30

If it goes against you the maximum loss is the place where you put your stops and you only risk a small part of your capital. If it goes your way LOWER your Stop to lock in at least 10 PIPS in Profits. Any Questions or comments ? On 2 positions your loss would be about $600 US or 2.4% of your capital on a worst case scenario. Then of course you can re enter at a much better short point if New Data has not caused the Trend to reverse.

If you are really confident and it does not break 104.00 you could add a 3RD position but because of NEW news you need to be more careful then usual. Watch if Dow Futures get better or worse as the morning approaches 9:30 AM EST and the open. Also this AM, Housing Data at 9:00 AM (Schiller)


Bruce

Soros: Worst is Yet To Come in Global Credit Meltdown

By EDMUND CONWAY, The Daily Telegraph
May 21, 2008
One of the world's most powerful financial traders warned yesterday that the world is enduring its "worst financial crisis" since the Great Depression and that Britain is heading for a recession.

In comments that will heighten families' fears about their finances, George Soros said the worst of the credit crisis could be yet to come, with the world economy enduring a series of major aftershocks.
The billionaire investor also predicted that Britain is facing a lengthy housing slump, with homeowners seeing property values plunge.
Mr. Soros said, "Financial institutions have been severely damaged and we are currently in a situation that will probably, I think almost inevitably, result in a recession, certainly in the United States and most likely in England also."
The warning, delivered on BBC Radio 4's "Today" show, is significant because Mr. Soros, a successful hedge fund manager, made an estimated $2 billion in 1992 by betting that Britain would be forced to withdraw from the Exchange Rate Mechanism.
Mr. Soros said that while the "acute phase" of the crisis in financial markets has now passed, the more painful economic repercussions are yet to hit.
He said: "You are going to have a few years of very different conditions than the ones you've been used to over the last 25 years. We've had a pretty serious crunch but the acute phase is behind us and now we've yet to feel the effects. In the case of the U.K. we've had a housing bubble that in terms of price increases has been greater than in the United States.
"That's also now going to be corrected — it is taking longer than in the States because you haven't had over-building like in America." House prices have tumbled sharply since the start of the year, with the government now acknowledging that prices are likely to fall by a tenth or perhaps more this year alone.
The falls have led to fears that many families will face negative equity, where their mortgage becomes more expensive than the value of their home.
In a further blow, the Bank of England last week indicated that in order to keep runaway inflation under control it may not be able to cut interest rates again this year.
The credit crisis has left many families facing a serious mortgage "shock" this year, as they renew their fixed rate deals and are forced on to significantly more expensive plans. Many households with poor credit records are struggling to secure a new deal at all, instead being forced on to an expensive standard variable rate.
Mr. Soros said this meant the prospects for the economy were even gloomier.
He claims in his forthcoming book that the financial crisis is the worst since the Great Depression in the 1930s, as it follows a major debt boom that has lasted a quarter of a century.

http://www.actionforex.com/action-in...2008052747201/


Bruce

update on the chart channel down.. good short entry at 104

http://www.actionforex.com/action-in...2008052647103/


Bruce

P.S. Where are our charts ? Ours are better :-)

Thanks Most Appreciated. Good Teamwork... Good Timing Also.


Bruce

Hi, new here and trying to learn.

What is the importance of that option at 104 at 10 am, and what consequence does it have?

thanks

US home prices – Today’s March US S&P/Case-Schiller composite-20 home price index is expected to fall to –14.0% y/y from –12.7% y/y in February. The expected report of –14.0% y/y would be a new record low, although the history of the series only goes back to 2001. Most observers are forecasting a decline in US home prices by at least 20% before the situation starts to stabilize. US home prices are being pushed lower by a huge inventory of unsold homes that are already on the market, the dumping of foreclosed homes onto the market by banks, and weak demand by potential home buyers.
US consumer confidence – Today’s May US consumer confidence report is expected to show a –2.2 point decline to 60.1, adding to the –3.6 point decline to 62.3 seen in April. The April level of 62.3 was a 15-year low. Expectations for a decline in today’s US consumer confidence report are based on the already-reported US consumer confidence index from the University of Michigan that US consumer confidence in early-May fell by –3.1 points to 59.5. US consumer confidence continues to suffer from soaring gasoline and food prices, falling home prices, and concern about the weakening US labor market.
US new home sales – Today’s April US new home sales report is expected to show a slight increase of +0.1% to 527,000, stabilizing after the –8.5% plunge seen in March to 526,000. The March level of 526,000 was a new 17-year low. Last Friday’s March existing home sales report showed a –1.0% decline to 4.89 mln, indicating continued weak home sales in March. US homebuilders are desperately trying to sell their inventories of unsold new homes by slashing prices and offering numerous promotions, but potential homebuyers are staying away due to concerns about the economy and the continued tightness in mortgage availability.

Bruce

Every Day In Forex at 10:00 AM EST there are Option Expiry Amounts on all the currencies. So in the case of USD/JPY one side either bought or sold an option to say in this example SELL One Billion Dollars at the preset price of 104.00

If the option price is hit then the Seller either makes money on selling the Option and getting a PREMIUM if it does not reach 104.00 by 10:00 AM today or if it does reach this level if the BUYER wants to exercise his OPTION then the SELLER needs to sell it at 104.00

These options are more or less known and reported and the Big Ones can affect the market as large speculators and others try to reach or defend the option mark of 104.00

Perhaps this was not the best explanation so if someone more versed in this subject cares to add or correct anything please feel free to do so.


Bruce

12:27 USD/JPY: Carry Back On - Wayward Sons Celebrate New York, May 27th. NY traders have walked back into a carry trade world, but with one caveat, can US equities hold up. At first blush equity traders are a bit negative, however they are willing to become infused with the enthusiasm of their Asian colleagues. There is definitely an Air of "show me the money" about all the markets. London dealers note the proximity of heavy 104.00 expiries this morning that will run off just as US consumer confidence and new home sales data are due to be released. The focus is definitely equities, overbought 103.95/104.15; oversold 102.95/103.15; the 24-hr M/A at 103.55 is encouraging a buy dip attitude from short term momentum traders. Spot last at 103.85/88. [email protected]

I am new here and learning basics. Watching threads carefully. Trying to figure when pairs go up and down. Since last two weeks, pairs go oppositely to my guess. when I close, it goes up, when I buy - it goes down, when I sell, it moves up. Learning to catch up with the trend.

be careful because it is breaking channel to he upside so it is cancelling my previous plan... will have a better entry then... will wait for news in 1 hour.

Folks

I will explain to all of you including and especially emda what has happened since 8:30 AM in this USD/JPY pair.

The first spike up was due to a RUMOR put out by someone with a AGENDA that the Case Schiller Home Index was WAY better than Consensus. Guess What ? The Rumor turned out to be false. However once it broke 104.00 other factors came in.

Now here is the actual news... Copy And Paste...More Comments To Follow my Copy And Paste.

Dollar firms up a bit even as home prices fall more than expected

1 minute ago
http://broadcast.ino.com/srv/www/del...078&n=ac95a3e5(RTTNews) - The S&P/Case-Shiller report showed Tuesday morning that home prices in 20 U.S. metropolitan areas slid 14.4% in March from a year earlier. Home values decline more than expected, with analysts having predicted a drop of 14.2%.

Still, the dollar was steady versus other majors on the news. The buck rose to 1.5730 versus the euro, 1.9760 versus the sterling, and 104.11 versus the yen.

At 10 am ET, data is expected to reveal that new home sales in April slowed to an annual pace of 520,000 from 526,000.

For comments and feedback: contact [email protected]

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved




When the NEWS came out WE had a SPIKE back below 104.00 briefly however the damage was done as the PERCEPTION changed and the Dow Futures are UP 21 at the moment. Bottom Line...

The NEWS was AWFUL but the FALSE RUMOR put out on PURPOSE took the attention off the data itself. Got rid of weak hands and confused FX traders.

It was ALL NOISE. Now the Dow opens UP and as yet Consumer Confidence and New Home Sales are not out. The NEWS was BAD PERIOD...

So after the Excitement goes away and REALITY SETS in we resume going down however now WE need to deal with NEW Technical Calls that short term exacerbate the situation.

So we are back to waiting for the 10:00 AM data and that is WHY 95% of FX traders LOSE because the Technicals CANNOT predict the EVENTS that I just described. I hope that your understanding the nature of this market, the games played, the special rules and traits and how being aware of it will let you become a winner.

Bruce

Now The FED has Made Their MOVE and Gold is Down and Oil is Down And DOw Futures are UP More and NOTHING HAS REALLY changed BUT for the Worst. PLEASE PLEASE go back and READ my earlier posts this morning. I called it and also gave you the Strategy how to play it.

Please post your thoughts, comments and any questions that you may have.

Bruce

thanks Bruce

dow going up as expected... to match UJ
UJ broke channel up.. now it ahs to retest is as support and continue going up.. all if news is good.

for me.. if dow doesn't break 12520 to the upside... UJ will have to go down because dow is still ranging in the last consolidation zone

Dow broke a 3 month uptrend last week to the downside, it might go back up and test the lower channel as resistance, but that's about it IMVHO

emda, where are you seeing divergence?

Only an educated guess BUT the FED knows the numbers due out in 21 minutes and if BAD it could really send the Dow down so what better time to JUMP START the US Dollar Index and send Oil and Gold down to mute the effects of BAD numbers for a little while until REALITY sets in again. All the DATA was BAD and FUNDAMENTALLY nothing has changed but a chance to get in at better levels to short USD/JPY.

Then We Get To A Trading Plan and Risk Management and having the REAL KNOWLEDGE of what is going on to know the difference and have confidence in your FX skills rather than just watch it go up and down and have the technicals at times confuse you if you do not understand the fundamentals that keep changing things including the OBVIOUS MANIPULATION by the POWERS THAT BE Who Ever They are !!!

Bruce

ahhhh yes!
that's something I always suspected...
thanks

The 1st picture was posted by me on May 21, 2008.

The 2nd picture is as at today.

So, will USDJPY comes down eventually.

I welcome comments and inputs here and also in my new thread at:

http://www.forexfactory.com/showthread.php?t=88492

The Place of the Winners

So house sales are better than expected, and consumer confidence is down... where to now?

North? South? or East? >>



Ron.