A bounce tonight?

[ducati916]

Ducati,

Im sure you go over this time and time again, but can you give a very brief summary of "carry trade" or a link to a previous explanation?

Thanx

The Bank of Japan has had their discount rate @ 0.00% for a number of years, it then rose to 0.025% last year sometime [or year before] and rose to 0.05% in the last 3 weeks.

Therefore you can borrow Yen @ 0.00% interest and invest it somewhere else for an arbitrage return.

Hence currencies like the NZ$ went through the roof due to NZ higher interest rates.

Commodities futures would normally trade in backwardation, thus you could roll the contracts for a positive yield. Hence massive speculation into commodity markets forcing them into manic bulls. So much so, they went contango.

The more aggressive would place the funds in equity markets, China, India, ASX, anywhere that had a bullmarket.

So to borrow Yen, in essence you *sell Yen short*
Now that Yen is rising, the spread is closing on other currencies, thus the profit is reducing.

To keep the Yen *undervalued* constant selling and reinvestment was required..that's finished, and in addition the traders in existing positions are exiting, and buying Yen to close their *short position*

No selling, and huge buying, unwinding some 10yrs worth of positions.
Those that went into the futures markets before they went contango, pulled out prior, thus the falling commodity prices.

Now we are seeing the equity portion fall out of bed.
The next will be Junk bonds, then Treasuries.

The Treasury market will be balanced by the *Flight to Safety* so probably won't be as brutal, unless the Fed starts to ease.

If they ease, then you'll see more unwinding out of Treasuries as well.

That's more or less the basic gist.
jog on
d998

 

[Sean K]

Broke through...

Hmmm this is a panic move...

Mag

I agree. I've even thought about selling my long positions the past few minutes, but I went through them all in detail to remember why I was holding them, and the reasons are all still there. Nothing has changed except market psychology. Amazing beast the market. The heard is stampeeding to the cliffs edge. The front runners seem to be jumping off...

 

[Magdoran]

Must say I am suprised that all of those who are proficient in GANN and ELLIOT who are here haven't given any commentary on how the analysis is panning out.

From what I understand there should be both time and price points now clearly definable within the analysis codes.

Anyone like to run us through the analysis and price and time points?

I understand that the analysis is dynamic and if X doesnt happen then it will mean Y is more likely.

No problem thats the nature of the beast.

Wave
Bronte (You teach it)
Moggie(So do you I believe).
Anyone.

Happy to have a go myself but I'm no expert---understanding yes expert---nah.

Sorry Daffy,


The problem is it is difficult to explain the intricacies of a system in short hand, certainly on the fly like this when I’m trying to trade, discussing strategies, and responding to a range of questions from different quarters – hence the quality of my work won’t be great. I literally have Gigs of snap shots of charts and projections with written commentary… I’m not going to post that up, ASF would be full of my ravings (even more than usual! Hahaha!).

The key dates I’ve made clear all along, with the proviso that the current pattern supports the probability that the cycle into the high is the same as the one on the way down. Now this is not a given. If it changes to what was a minor cycle, the dates and inflexions all change. This effects the price targets too… Hence I really need to see what the first counter tend out of this drive down does.

But Key dates currently are: 14 March, 01 April, 13 April, 31 May, and 18 July could be the completion of the move (could extend into 23 August or beyond however). But this is way too premature without the requisite confirmation, especially from the first counter trend (assuming this is a bear campaign).

Anyway, it’s almost professional hour… things to do!


Mag

 

[nizar]

I agree. I've even thought about selling my long positions the past few minutes, but I went through them all in detail to remember why I was holding them, and the reasons are all still there. Nothing has changed except market psychology. Amazing beast the market. The heard is stampeeding to the cliffs edge. The front runners seem to be jumping off...

Yep heard mentality has kicked in.
You know what they say: Bulls make money, bears make money, and sheep get slaughtered.

Mag i hope you made good money from this move down as you seem to be enjoying yourself. For me, at least i didnt lose (anymore)

 

[nizar]

Anyway, it’s almost professional hour… things to do!

Haha good call

 

[Kauri]

We are not orphans..

 

[MichaelD]

If I were a punter, I'd punt on a blow-off bottom tomorrow on the open by the way the day looks to be closing - looks like dropping through intraday support big time for the close (as at 3pm).

Fear might start turning into despair tomorrow.

 

[It's Snake Pliskin]

You know what they say: Bulls make money, bears make money, and sheep get slaughtered.

Nizar that sounds like my Elder CD.

 

[nizar]

Nizar that sounds like my Elder CD.

LOL yeh top book that was.

 

[Techbuy]

Watching the days trading a lot of the shares have leveled from the low of the day.

It's only a small movement but some have even gone up, just a little $.001 but the downwards spiral from this morning seems to have eased as we head towards the close.
Tomorrow?? where is my crystal ball?
What the afterhours traders will do.. Dump? consolidate? (buy more? MMM unlikely!!)

 

[Kauri]

Is this going to become valid support or is it the professionals doing a bit of intraday short covering??

 

[nizar]

Is this going to become valid support or is it the professionals doing a bit of intraday short covering??

I think the latter.
After 5700 broke it was an easy call to short. Easy money. 40pts.

 

[Magdoran]

Haha good call

Sheesh, exhausted now. What a mad day…

 

[professor_frink]

Nikkei is getting close to 16700, down over 500 today.
Dow futures are down over 100 already

Don't think tonight is going to be pretty at all.

 

[The Mint Man]

If the yen keeps going up there will be some investors "bouncing" off footpaths!

Also known as a 'dead investor bounce'

Anyway,
I know alot of people that are waiting for.... shall I say (for need of a better word) 'magic numbers' to be reached before they pile their money back into the market. A few I have spoke to are saying around a 10% correction then games on... well, almost there fellas!
these people know who they are

cheers

 

[justjohn]

Also known as a 'dead investor bounce'

Anyway,
I know alot of people that are waiting for.... shall I say (for need of a better word) 'magic numbers' to be reached before they pile their money back into the market. A few I have spoke to are saying around a 10% correction then games on... well, almost there fellas!
these people know who they are

cheers

These cashed-up bottom pickers must be drooling after today and at tomorrows prospects, ah Mint :

 

[Techbuy]

This was at 11:30 this morning:
as well as a lot more green in the price ranges.

 

[PhoenixXx]

So does this mean correction has finished?

 

[Sean K]

So does this mean correction has finished?

6% could be just a correction, but 8% would confirm it. The past 'corrections' have lasted 3 to 6 weeks before steadying and/or heading higher, so we might have a couple more to go. This could be one of the dead cats....

 

[Kauri]

We dropped I think the best part of 2% yesterday anticipating more O/S carnage, overnight the S+P 500 only went down about 1%, so maybe we are just re-aligning with them? If so, todays/tonights action in other major markets may dictate whether we have a genuine short-term bounce or whatever???