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发表于 2008-5-16 18:17
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Terri is taking some much deserved vacation time in a far warmer climate than New York's.
There seems to be a notable confluence of technicals at 230 to suggest it will hold as resistance. You have the 50% fib of the 8/17 to 11/1 upswing (which initially held up as support in the October swing low), a range high, a top in volatility suggested through the bollinger bands and of course 230 is a psychological number.
All that being said though, I'm not going to try to short this. Today's candle is nearly 500 points. That kind of momentum should not be faded unless you see clear signs that the market is cooling and a turn is possible for the linger yen bulls. If anyone were to trade this to the short side, they'll have to play with wide stops, expect high volatility and therefore false breaks to the upside.
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Hello weekapaugh,
Those sites' suggestions that the Japanese yen is correlated to the stock market is correct. This relationship holds not because they are interchangable; but because both are considered assets that are closely tied to what market participants would call risky assets. Stocks are considered a relatively risky assets and traders and portfolio managers will generally put their money into equities when they think market-wide volatility will remain low and things are generally improving. At the same time, investment in the carry trade (selling a low yielding currency and buying high one) is dependent on the same conditions that are optimal for long-side stock investment because the interest you receive is threatened by capital losses (so a drop in GBPJPY could quickly wipe out the interest you recieved on the carry).
Over the past two days, the risk outlook for the markets has degraded and improved. Yesterday, the Fed only cut a quarter point where a hefty section of the market was hoping for a half point reduction to better help the sticky credit markets and revive confidence in stocks. So, the disappointment sent risky assets declining. Then, this morning, the Fed followed up on its quarter point rate cut with an announcement that the Fed would be injecting liquidity into the market in a new way (the ECB, BoE, BoC, BoJ and SNB announced the same). This is expected to help calm credit market fears and revive lending, so risk acceptance is once again on the rise.
Does that help?
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Well I'm back from my brief vacation (with a bit of a sunburn, standard for any trip down south for me), and I've been busy checking out everything that happened since then. My main conclusion: I'm still long-term bearish GBPJPY (big surprise, right?), though I wouldn't be surprised to see the pair range trade for a while first. I sort of wish that the Fed would stop putting on the show-and-dance and just let equities correct like they are meant to do, rather than delaying it.
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