10.4 A Complete System

[kwanann]

AUS and NZD were played HEAVY as buys selling YEN. Checkout the straight lines on the NZDJPY Chart. That ain't natural movement. So they are getting KILLED while the YEN trade retraces. Remember your CSS chart showing NZD as the strongest pair... We aren't the only ones looking at such things.

In addition we have AUD tied heavily to Gold. Which is also getting destroyed.

Plus AUD had medium bad news earlier which is an excuse to pummel it further.

We have a TON of weak longs in JPY pairs. Everyone was thinking FREE MONEY and needs to be reminded that nothing is for free. Charts like this with straight lines and parabolic moves ALWAYS correct. Macro view is still likely correct... just have to shake the tree a little and collect.

Two bits. But really there was only one trade last couple weeks it has all been Yen. It still is. They just added Gold to the mix.

Mike

Agreed, gold is still crashing. Yen pairs are also down across the board, nothing new on this, just check out the 2 weeks before yen crazy rise and you will see history repeating itself. I got stuck there then. Don't plan to get stuck again. Best buys would be when yen crosses the 240ma

Sometimes, when things looks wierd, it's best to sit back and see what happens rather than jumping in. Not trading is better than sustaining high dd or heavy losses

[nanningbob]

I appreciate the comments but people are selling gold and buying the JPY. Explain that to me. That makes absolutely no sense what so ever. Yes I can understand a correction but this is no correction. aud nzd going down makes some sense but bottom dropping out like this?? China numbers werent that bad 7.7 growth instead of 8.0 is not that bad. I have no idea what is going on here. The good news I guess will be when do we get to play JPY weakness again?

[Chris]

Mike,
were you able to catch these moves back down? If so what system were you using to do so? Cause I don't see any 10.4 trade that work that way?

[Chris]

The good news I guess will be when do we get to play JPY weakness again?

Your answer is once I get stopped out of all my JPY trades.
which may be soon enough.

[Chris]

It is amazing how some little 0.01 trades can add up.

[Chris]

JPY buys have not stopped since the market opened. There seems to be no support to be found.

[mjws00]

It isn't an AUD news trade. Doesn't matter what the talking heads say. This is a classic short/long squeeze and the big boys are getting paid and positioning. The leveraged guys are getting crushed. The dumb money is getting transferred.

They'll put in a bottom in a while and we will resume regular trading. You either have to define the trend in a shorter term version and trade the correction. Or stand aside and re-enter when it turns. Putting in anything bigger than a scalp on a bounce, against this momentum is scary.

There are a bunch of correlations that have changed and broken, gold/risk, s&p/usd, usdchf/eurusd... probably a million I don't watch. That behaves a lot like divergence often providing a heads up that change is afoot.

Only thing I wish I knew how to do better was get in these moves after they are rolling. 10.4 does this nicely. It is really easy to stand aside and watch beautifully predictable large waves pass you by.

I'll be trading Asia as well if they keep putting these kinds of moves on. WOW.

Mike

[Chris]

Trading what? Do you buy or sell, at this point I have some stops in place, but I think I need to sit aside and let this crazy thing decide where it wants to go. Sure wish I had that crystal ball indicator.
http://www.youtube.com/watch?v=O3ZOKDmorj0

[mjws00]

Mike,
were you able to catch these moves back down? If so what system were you using to do so? Cause I don't see any 10.4 trade that work that way?

I don't follow 10.4 strictly. I like parts of it but the 4H (240) is not sensitive enough for me. I don't know how to deal with 300+ swings. So I take pieces of them and let half ride to try and catch the runners. I trade supply and demand, naked, and like RSI2.

I bought on the way up sold on the way down. Don't normally trade Asia, and had work so missed this latest move. I'm boring to watch as I don't do 90 trades a week.

10.4 didn't get hurt by this. Only thing we've seen is that fundamentals, even macro, can have a twist or two. It should be a 1% std stop out if and only if it tags the 240. The rest is just greed.

Mike

[kwanann]

I appreciate the comments but people are selling gold and buying the JPY. Explain that to me. That makes absolutely no sense what so ever. Yes I can understand a correction but this is no correction. aud nzd going down makes some sense but bottom dropping out like this?? China numbers werent that bad 7.7 growth instead of 8.0 is not that bad. I have no idea what is going on here. The good news I guess will be when do we get to play JPY weakness again?

As a fundamental player, this makes sense.

As of last week, which instrument is a good hedge against inflation?
Yen.

Which instrument was a good hedge against inflation?
Gold

So if Funds are reevaluating their investments, what would be the most obvious choice to make?