Comments on: Yen:Euro cross as a measure of risk appetite http://sovereignspeculator.com/2009/08/02/yeneuro-cross-as-a-measure-of-risk-appetite/ Thoughts on the markets and the decline of the west Sun, 28 Nov 2010 20:00:06 +0000 http://wordpress.org/?v=2.6 By: Mike http://sovereignspeculator.com/2009/08/02/yeneuro-cross-as-a-measure-of-risk-appetite/#comment-4867 Mike Mon, 03 Aug 2009 10:50:05 +0000 http://sovereignspeculator.com/?p=2566#comment-4867 Yeah, it's ugly out there today. Look at copper and silver, too. But I agree, we've gone too far too fast. I am glad to see this final plunge in the dollar -- sentiment is so bad right now that it can't go much lower, so when it turns that will likely be a major bottom. This really is a great set-up for a currency trade. And bonds are still holding up above last weeks lows, not confirming the dollar. Yeah, it’s ugly out there today. Look at copper and silver, too. But I agree, we’ve gone too far too fast. I am glad to see this final plunge in the dollar — sentiment is so bad right now that it can’t go much lower, so when it turns that will likely be a major bottom. This really is a great set-up for a currency trade.

And bonds are still holding up above last weeks lows, not confirming the dollar.

]]> By: jason bourne http://sovereignspeculator.com/2009/08/02/yeneuro-cross-as-a-measure-of-risk-appetite/#comment-4866 jason bourne Mon, 03 Aug 2009 09:59:49 +0000 http://sovereignspeculator.com/?p=2566#comment-4866 Thanks for the Yen article, Mike. It's a compliment :) Well, today (Aug 3, 2009) the dollar is getting raped all over by all those risk currencies. Many of them set multi-month highs, except for the euro (or not yet). I guess SPX 1000 is breached tonight. Bears are capitulating, but it seems more (perhaps significant) capitulation is still to go. A big capitulation today: http://www.telegraph.co.uk/finance/markets/5963702/Commodity-prices-set-to-rise-further-Roubini-says.html But if we remember the H&S fakeout ending in mid-July, stocks have been flying non-stop -- sprinting. The analogy would be that of sprinting vs. marathon. The "sprint" may have caused the top in SPX to be lower & sooner than it could potentially achieve if it were to correct deeply first. Nevertheless, today's opening will likely be one of the worst nightmares for the bears (I'm hurting, too -- although I'm all cash, the dollar stinks for now) Thanks for the Yen article, Mike. It’s a compliment :)

Well, today (Aug 3, 2009) the dollar is getting raped all over by all those risk currencies. Many of them set multi-month highs, except for the euro (or not yet). I guess SPX 1000 is breached tonight. Bears are capitulating, but it seems more (perhaps significant) capitulation is still to go.

A big capitulation today:
http://www.telegraph.co.uk/finance/markets/5963702/Commodity-prices-set-to-rise-further-Roubini-says.html

But if we remember the H&S fakeout ending in mid-July, stocks have been flying non-stop — sprinting. The analogy would be that of sprinting vs. marathon. The “sprint” may have caused the top in SPX to be lower & sooner than it could potentially achieve if it were to correct deeply first.

Nevertheless, today’s opening will likely be one of the worst nightmares for the bears (I’m hurting, too — although I’m all cash, the dollar stinks for now)

]]> By: Mike http://sovereignspeculator.com/2009/08/02/yeneuro-cross-as-a-measure-of-risk-appetite/#comment-4865 Mike Mon, 03 Aug 2009 09:32:42 +0000 http://sovereignspeculator.com/?p=2566#comment-4865 Bjorn asked about my concern over counterparty risk with my options strategy this time around. I will just play it by ear. If all goes according to plan, I'll sell into major declines a bit at a time, and not try to hang onto everything until the end. Also, as things get rough, I may phase out of options and use futures more. I do derive some measure of comfort from the circuit breakers at the exchanges and the OCC itself. Also, if we have the kind of grinding decline that we had after April 1930, there won't be waterfall conditions again, though of course that is what wave 3 of 3 is supposed to be. EWI is calling for a new high in the VIX, after all. Bjorn asked about my concern over counterparty risk with my options strategy this time around.

I will just play it by ear. If all goes according to plan, I’ll sell into major declines a bit at a time, and not try to hang onto everything until the end. Also, as things get rough, I may phase out of options and use futures more.

I do derive some measure of comfort from the circuit breakers at the exchanges and the OCC itself. Also, if we have the kind of grinding decline that we had after April 1930, there won’t be waterfall conditions again, though of course that is what wave 3 of 3 is supposed to be. EWI is calling for a new high in the VIX, after all.

]]> By: Aki_Izayoi http://sovereignspeculator.com/2009/08/02/yeneuro-cross-as-a-measure-of-risk-appetite/#comment-4860 Aki_Izayoi Mon, 03 Aug 2009 04:11:58 +0000 http://sovereignspeculator.com/?p=2566#comment-4860 Wow, the EURJPY FX cross is also the <a href="//en.wikipedia.org/wiki/Enantiomer" rel="nofollow">enantiomer</a> of the S&P 500. Wow, the EURJPY FX cross is also the enantiomer of the S&P 500.

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