hedgeman

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    • Thu Oct 23rd 08:48 AM | Rating: 0 0
      Commented on:
      Three Possible Explanations for the Dollar's Strength
      DX is a real surprise at this levels. We are adding to our shorts instead of stopping it since short EURJPY and USDJPY positions are performing nicely.
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    • Mon Oct 6th 13:30 PM | Rating: 0 0
      Commented on:
      Stocks Plunge, Dollar Surges
      US dollar touched highs for this retaracement today. Sell USD for 65 target in DX.

      Disclosure: Short USDJPY and EURJPY. Short DX.
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    • Sat Oct 4th 05:28 AM | Rating: 0 0
      Commented on:
      Bailout Bill Passes; What Happens Now?
      100% agree. Probably equity markets will rise after some serious pounding early next week again fooling many that the politicians "rescued" the world. Reality is DEFLATION after a period of stagflation. Check comments from Mr. Trichet... ECB is so behind (off) the curve that it is basically unimaginable. Europe will get a much worse hit then US, Japan will probably come out as a winner (of course only on relative basis). Those guys learned to survive in such environment and their economic structures are far better equiped to weather this storm.

      As to the US baby boomers coming to retirement, they will probably see their 401k's severely depleted...

      Nationalisation of homes in foreclosure and another check to average Joe (with a defined spending rules: pay mortgage and debt and of course spend some otherwise Chinese and other Asian nations will refuse to buy the newly issued US gov. debt) would in our opinion be a much better solution.

      For a guage of what the real economy globally is doing Baltic index (BDI) is still appropriate measure and it is showing severe slowdown (not just lower oil prices).

      The bailout bill is enough for GS and MS to stay afloat and if we drop the charade this is what the intention of Mr. Paulson was in the first place. Be sure GS and MS (if they survive) will reload equity positions from retired people who will sell their 401k holdings near bottom and this will mark the bottom of the cycle. This is the plan however the eternal question whether it is really different this time still hangs over us.

      It is different and as risk models showed in Aug07 once every 200 million years events can happen. So what we should really think about is how to avoid the global capitalism avoid transition into chinese style capitalism in order to survive. This is not a once in a 100 years event, it is an event unseen so far.

      People feel this is a cold, others say pneumonia, few of them say 87 crash was heart stroke and this is cancer. When average Joe realises this is cancer and looses the trust in fiat money, the system will have to change. Let's just hope PEOPLE put the pressure on politicians and really PRESSURE them (PUBLIC PROTESTS) so they will for once listen and not just think about their personal position.

      Chinese style of capitalism if not that bad for the Chinese actually at this point in their development cycle. However it would be disastrous in the western world and should be avoided at all cost.
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    • Sun Sep 21st 03:31 AM | Rating: 0 0
      Commented on:
      Time To Hedge Dollar Exposure
      USDJPY target 90 by year end. Added to shorts above 107.00, the train is about to leave the station.
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    • Mon Sep 15th 15:28 PM | Rating: 0 0
      Commented on:
      Dollar Shows Resilience As Safe-Haven Currency
      Just buy JPY ag EUR and USD. USDJPY manipulation is key to USD correction. It is still just a correction within a bear trend with a target of 65.xx for DX...

      Disclosure: Short EURJPY and USDJPY.
      View article »
    • Fri Sep 12th 11:14 AM | Rating: 0 0
      Commented on:
      Whither the Dollar? Currency Trends and ETFs
      Is the dollar just bouncing off its summertime lows, or is this rebound the beginning of a new upward trend?

      USD is in correction mode (DX 81.xx target). Still surprisingly fast advance, no corrections, official names can be "felt" in the market action. Don't let behind the doors deals between US and Asia (China) fool you into thinking USD is now fundamentally bid. It is still fundamentally weak however since the latest carnage USD shorts will be more carefull and the rate of descent will be slower. Our target remains DX 65.xx zone, however it is hard to estimate the interval (well it is always hard, harder this time since govie USD bulls do not follow the same investing rules as other players) Best guess at moment 2q 2009....
      We still remain JPY bulls (ag. EUR and USD).

      Disclosure: short EURJPY and USDJPY
      View article »
    • Tue Sep 2nd 08:03 AM | Rating: 0 0
      Commented on:
      The Dollar Can Continue To Rally, Despite the Weak Economy
      USDJPY has to rally above 113.00 and close the month of September above 113.00 for the USD rally to have more legs (not a likely scenario at present in our view). The dynamics of the upmove of DX is astonishing indeed and probably has further to go. DX has room to 81ish through EUR and GBP fire sales. There should be an interim correction to 75.50 - 76.00 levels first if 81 should be seen.

      Meanwhile JPY is quietly setting the stage for a rally and JPY will be the winning currency in the 12-18 month frame.

      Disclosure: short EURJPY and USDJPY.
      View article »
    • Fri Aug 15th 09:11 AM | Rating: 0 0
      Commented on:
      The Euro's Long Run Is Finally Over
      It is not over yet.


      EURJPY 162.00, watch for daily close bellow. We should see a fast drop to 150 if that happens. In current conditions it is my belief that USDJPY will take more heat and this should stop (reverse) the rising USD. Long EURJPY positions (used as proxy long commodities) are relatively large and part of EURUSD selling was unwinding the EUR part of these position. The rise of USD happened much faster then anticapted and USDJPY is expensive longer term above 110.00. Providing defense of 162.00 is succesfull I do not exclude a rally to 115.00 but there the fun is defenitely over.

      As for the EURUSD... it will take 2-3 quarters and final spike to 1.69 in 2009 (65.xx in USD index) before it will finally be over. Important levels (short term 1.4630), longer term 1.36-1.42 area will serve as accumulation area. Since momentum is extremely strong picking a bottom before we see a higher weekly close is not advisable.
      View article »
    • Sat Aug 9th 06:28 AM | Rating: 0 0
      Commented on:
      Forex Wrapup: Dollar Benefits As Traders Focus on Weak Economies Elsewhere
      We have to diferentiate between "focus" and forced liquidation of positions due to eroding capital. Next to move? Should be EURJPY.

      EURJPY is standing on critical support levels, bellow 162.00 it will start to brake USDJPY advance and should provide a temporary relief for the USD bears. Since EURJPY was a long commodity proxy for the past few years it should revisit sub 150 in the first round. Since EURJPY is in a distribution phase for weeks now this commodity corelation seems to be broken however it will return. The move will most probably be very fast after 162 gives way on daily closing basis. This very popular carry trade is the last to brake and since capital is severely depleted by fast moves on other fronts the liquidity will be very poor and will exacerbate the move. If USDJPY brakes above 110.80 on daily closing basis the downmove of EURJPY could stall (for a short while only). Levels to watch are 165.10, 164.45 and 162.00-50 area (here defense is expected).

      Long commodity, short equity, short USD and carry trades strategies unwounding on an overcrowded illiquid summer market. Fundamentals have limited impact at present.
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    • Mon Aug 4th 15:49 PM | Rating: 0 0
      Commented on:
      The U.S. Dollar: A New Accord
      JPY will be the star in 12-18 month time frame. Especially against the EUR. If the new Plaza accord is in place the "official" boys will sell EURJPY in order to strengthen USD. JPY is in the heart of the credit bubble and officials know it. Japanese economy should be able to withstand USDJPY bellow 90 and EURJPY should revisit 140 (an important level in the ECU era)... FWIW
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    • Mon Aug 4th 15:44 PM | Rating: 0 0
      Commented on:
      The U.S. Dollar: A New Accord
      The dollar should experience a midterm correction upwards of some 5%. Real economy should stop the advance and provide a good shorting opportunity (adding to positions) for the big hedge funds. My guess is EURUSD 1.69 and USDX around 65 in first half of 2009.

      There were times when interest rate differentials weren't the most important factor in the FX world. History will repeat itself. I feel the fixation with interest rate differentials between major currencies is a direct consequence of the lax credit practices. And we all know this story is already unfolding.

      The case for 5% up for the USD measured against a basket of other US trading partners (6 month time frame) is due to the lagg in slowdown in economic activitity between US and other economic blocks.

      View article »
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