USD/JPY Discussion

01:45 USD/JPY: Up Another Leg Following Tokyo Fix, Demand Solid Tokyo, June 9. USD/JPY is up another leg following the Tokyo fix on solid demand out of Tokyo. Japanese importers were good buyers from around the 104.80 level. Earlier, following the push down to the 104.40 level, a semi-governmental Japanese entity also showing buying interest though to what degree they could buy is questionable. After trading up above 105.00, the pair has seen another leg higher with demand not receding following the Tokyo fix. USD/JPY has traded up to as high as 105.24/26 level seen currently. Resistance topside is still eyed ahead of 105.50, a level on the hourlies. [email protected]

I closed my long postions in 105.36, and I want sell now.

I believe 105.35 / 55 resistance level

Good Luck to Us in this Week

Thanks for the news Bruce

What I am about to post here through the following Link:

http://www.financialsense.com/editor...2008/0606.html

While attention has been focussed on the relatively tiny US „sub-prime“ home mortgage default crisis as the center of the current financial and credit crisis impacting the Anglo-Saxon banking world, a far larger problem is now coming into focus. Sub-prime or high-risk Collateralized Mortgage Obligations, CMOs as they are called, are only the tip of a colossal iceberg of dodgy credits which are beginning to go sour. The next crisis is already beginning in the $62 TRILLION market for Credit Default Swaps. You never heard of them? It’s time to take a look, then.
The next phase of the unravelling crisis in the US-centered “revolution in finance” is emerging in the market for arcane instruments known as Credit Default Swaps or CDS. Wall Street bankers always have to have a short name for these things.
As I pointed out in detail in my earlier exclusive series, the Financial Tsunami, Parts I-V, the Credit Default Swap was invented a few years ago by a young Cambridge University mathematics graduate, Blythe Masters, hired by J.P. Morgan Chase Bank in New York. The then-fresh university graduate convinced her bosses at Morgan Chase to develop a revolutionary new risk product, the CDS as it soon became known.
A Credit Default Swap is a credit derivative or agreement between two counterparties, in which one makes periodic payments to the other and gets promise of a payoff if a third party defaults. The first party gets credit protection, a kind of insurance, and is called the "buyer." The second party gives credit protection and is called the "seller". The third party, the one that might go bankrupt or default, is known as the "reference entity." CDS’s became staggeringly popular as credit risks exploded during the last seven years in the United States. Banks argued that with CDS they could spread risk around the globe.
Credit default swaps resemble an insurance policy, as they can be used by debt owners to hedge, or insure against a default on a debt. However, because there is no requirement to actually hold any asset or suffer a loss, credit default swaps can also be used for speculative purposes.
Warren Buffett once described derivatives bought speculatively as "financial weapons of mass destruction." In his Berkshire Hathaway annual report to shareholders he said "Unless derivatives contracts are collateralized or guaranteed, their ultimate value depends on the creditworthiness of the counterparties. In the meantime, though, before a contract is settled, the counterparties record profits and losses -often huge in amount- in their current earnings statements without so much as a penny changing hands. The range of derivatives contracts is limited only by the imagination of man (or sometimes, so it seems, madmen)." A typical CDO is for five years term.

Will GIVE ALL that read it an EDGE if you take the time to read and understand it as I do.

We all know about Sub Prime ... Now comes CDS ...

Bottom Line ! No Party out there including the FED knows how bad it will get. The FOOLS under Greenspan caused it...PERIOD Why ? No regulation !

The Bankers went WILD !!!

Now it is time to find out how wild. The next Quarter ending June 30, 2008 will begin to show how BAD it will be.

I am only one of the Messengers ! I did not cause the MESS and neither did you. Now as FX traders come get your turn at the feeding bowl !

Feed off the Banks Losses and the DEPRECIATING US Dollar !!!

All Comments and Feedback are more than Welcome !!!


Bruce

Amended: Japanese market falls on Wall Street plunge, stronger yen

16 minutes ago
http://broadcast.ino.com/srv/www/del...755&n=a7d79994(RTTNews) - Amended: In the third paragraph, 'loser 104-yen zone' changed as 'lower 105-yen zone'.

Tokyo stocks were trading sharply lower Monday, tracking Wall Street's plunge on Friday and the yen's appreciation against the U.S. dollar. At 8:45 p.m. ET, the benchmark Nikkei 225 index was down 336.23 points or 2.32% at 14,153.21. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was losing 29.71 points to 1,398.40.

The U.S. stocks fell on Friday on increased fears about a recession following a jump in the May U.S. jobless rate and a new record closing high for oil at $138.54 a barrel.

In early Tokyo deals, the dollar was trading in the lower 105-yen zone, down from the lower 106-yen levels late Friday in Tokyo.

The economic data released today hardly impacted market sentiment. Data released by the Bank of Japan showed that overall bank lending increased 1.5% in May from a year ago, marking 28th consecutive month of increase. Meanwhile, M2 money supply grew 2.0% and M3 rose 0.7% in May. Additionally, preliminary data on leading economic index is scheduled for release later in the day.

Stocks lost ground across the board. Securities, iron and steel and banks were the major losers. However, mining stocks were in positive territory on the back of higher commodity prices.

Among brokerages, Nomura Holdings plunged 4.66%, Daiwa Securities Group fell 3.63% and Shinko Securities dropped 3.78%. JFE Holdings plummeted 4.75% and Nippon Steel tumbled 3.51%.

In the Banking space, Mitsubishi UFJ Financial lost 3.64%, Mizuho Financial declined 3.29% and Sumitomo Mitsui Financial gave away 3.42%.

However, commodity-related stocks were higher on the back of a surge in crude oil prices. Oil and gas miner Inpex Holdings jumped 3.85%, Marubeni Corp added 0.85% and Mitsui & Co edged up 0.20%.

01:54 EUR/JPY: Pop Up Above 166 Again, Takes Out Friday High Tokyo, June 9. Surprising strength in USD/JPY and a steady Nikkei following an early plunge has helped EUR/JPY break back up above 166.00. It has traded up to as high as the 166.32/37 seen currently, effectively taking out the 166.17 high seen Friday and up to levels not seen since December 27-28. The area to break topside looks to be 166.45-70, a double top from back then, 166.48 the high on the 28th and 166.67 the high on the 27th. Large stops are likely on a break above 166.70. Some lighter stops already look to have been tripped on the move above Friday"s high. A clear break above 166.70 targets the triple high in the mid-167 area seen on October 11, 15 and November 7 of last year. [email protected]

Warren Forex, is this a good time to short or long?

You seem to make much informative comments here, I'm hoping you can tell me whether to long or short at this moment ...

No New News ! Watch if EUR/JPY reverses below 166.00 and Know RESISTANCE for USD/JPY is 105.40 and 105.50 so if you try to short watch near there. Put your STOP about 10 PIPS above 105.60

A Entry at 105.35 limits your loss to 25 PIPS. I would wait for the Europe Open or watch if it has trouble breaking 105.40 and Short if you do at the Top of the 5Minute Chart using the Bollinger Band and Looking at MACD, SAR and RSI. Try to make your own decisions. If you are not convinced one way or another just be patient until you are more than 50% sure of your Trade Plan. I hope that helps you and others who read this post.

Good Night...Off for some Sleep for a few hours !!!


Bruce

Buy UJ 104.5 (Since S1 is 104.44, I had buy order at 104.5)
Close 105.35 (Since DP is at 105.39, I had TP at 105.35)
2 lots for total of +170pips

This is a great article, thanks for posting Bruce.

This next paragraph though is perhaps the most indicative:

"An estimated $1,2 trillion could be at risk of the nominal $62 trillion in CDOs outstanding, making it far larger than the sub-prime market. No regulation
A chain reaction of failures in the CDS market could trigger the next global financial crisis. The market is entirely unregulated, and there are no public records showing whether sellers have the assets to pay out if a bond defaults. This so-called counterparty risk is a ticking time bomb. The US Federal Reserve under the ultra-permissive chairman, Alan Greenspan and the US Government’s financial regulators allowed the CDS market to develop entirely without any supervision. Greenspan repeatedly testified to skeptical Congressmen that banks are better risk regulators than government bureaucrats.
The Fed bailout of Bear Stearns on March 17 was motivated, in part, by a desire to keep the unknown risks of that bank’s Credit Default Swaps from setting off a global chain reaction that might have brought the financial system down. The Fed's fear was that because they didn't adequately monitor counterparty risk in credit-default swaps, they had no idea what might happen. Thank Alan Greenspan for that."

When I hear "completely ungregulated" and "ticking time bomb" my first guess would be the Great Depression - and that is scary. If/when these do start trickling out (before they starting pouring out) we traders better short the dollar and ride the wave.

Good pipping,

Mark

http://www.bloomberg.com/apps/news?p...refer=currency

The High on my FXCM platform is now 105.589 just below the 105.60 Number.

The US Dollar Index is weaker and Gold is UP over $900 US BUT EUR/JPY has come from 164.951 to a HIGH of 167.046 and now is at 105.47 as EUR/JPY Carry is over whelming the US Dollar weakness.


Bruce

That is why USD/JPY tested 105.90

It now trades at 105.58 Bid and DJ Futures up 32 while Gold is Up and Oil down a little near $137

Bad News out of Lehman that the Market could take as good but probably not ? Who knows for sure ?

Stay Tuned...


Bruce

Pending Homes Sales in about 15 minutes... Are we expecting bad news?


Hmm

The dollar seems to be on a continual uptrend ... shorts don't look good at all ....

I hope it will revisit the 105's again, otherwise I'm screwed ...

the truth is out there...
we little traders... are like the little mouse trying to figure out what is happening in the world...

http://media.knuttz.net/funny/080605/knuttz_ueba_23.jpg

i slept very much :s

I am off for a few hours. Here is my views just posted on the other thread mentioned above.

Good Trading !!!

Copy and Paste:

10:38am
Warren Forex http://www.forexfactory.com/images/s...ser_online.gif
Warrenforex
Member Since Sep 2006
Posts: 636


http://www.forexfactory.com/images/icons/icon14.gif I Will Be Off For Awhile !!!
Here is the way I see it for the next few hours.

Watch what EUR/JPY does. Now at 166.69 Bid... Keep your Eye on Gold and see if it holds firm. Oil now holding around $136 The Dow is stronger BUT it did go down 394 on Friday.

As long as USD/JPY does not breach 106.40, 106.50 and 106.60 I see it more likely to go down. We could get a late day rally in Dow but ?

Also Two Central Bank speakers around NOON !!!

Trichet and Geitner FED President... Watch to see if any market reaction to their words.

Nasdaq Down so gains not all over. Lehman not good news. Pending Home Sales better but still BAD !!!

Gold still over $900 and Dow UP under 100

Use your head, be patient and trade without emotion as much as that is possible.


Good Trading To All !!!


Bruce

One More View !!!

SPOTTECHNICAL SIGNIFICANCERECOMMENDATIONPOSITION107.15(M)2% MA Env Top Flat On A Failure SHORT at 106.06
open09/06/08time14:59target104.60stop106.55106.75(M)Feb 22 Daily Range Low Flat On A Failure 106.40(M)Jun 5 Trend High Buy Stop/Reverse 106.25(M)1% MA Env Top Sell A Failure 106.2114:40 GMT MON 09 JUN 105.40(M)Hrly S/R Jun 9 Cover On A Bounce 104.60(M)Up TL Basis Tuesday Take Profit 104.45(M)TL 95.75/102.75, Hrly Low Sell Sustained Break 103.90(M)Daily Low May 28, Jun 3 Buy Bounce/Sell Break
Short taken after prices barely breached the long-term downtrend line, now at 106.15, and then failed exactly at the 1% MA env is at 106.22. Buy opp missed overnight when prices fell to the daily uptrend line support at 104.45 and began a rapid rebound. That Trendline"s Tues position is our short trade"s target. Stop/Reverse is at 106.55. (RD) 14:03 GMT

http://www.forexfactory.com/images/misc/progress.gif

I'm really tired of people who THINK they know what they are talking about..... I make 100 pips a day using the charts and indicators of my choice..... Those who are technical are the losers and not the true trader who knows the winning hand of the charts....

The Dove

I'm tired of people that says they make 100 pips a day....
lol

Hey Dove - long time no see - why not pop back in again and show us some of your ideas.......