Trade Alert – (FXY) April 24, 2012

As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price.

Trade Alert - (FXY)

Buy the Currency Shares Japanese Yen Trust (FXY) September, 2012 $121 Puts at $3.30 or best

Opening Trade


expiration date: September 21, 2012

Portfolio weighting: 10%

($5,000/100/$4.00) = 15 Contracts

The Bank of Japan policy committee meets this week to discuss further monetary easing in the face of the country’s inflation rate, which is below 1%, and well below the bank’s 2% target.

The beleaguered Japanese currency has had a month to digest an impressive 10% move down, and the time to resume the downtrend is fast approaching. In addition, I want to add a “RISK ON” position to balance out the hefty “RISK OFF” positions in the (FXE), (IWM), (PHM), and (BA) that I already and carrying in my model portfolio.

If equity markets suddenly recover, then the fall of the yen should accelerate. I am going out long with a September expiration because I think this trade will be good for the year. The downward sloping 50 day moving average is providing some serious upside resistance, so now is as good a time as any to get back in.

At the very least, we should revisit this year’s low in the (FXY) of $117.5. That should take the Currency Shares Japanese Yen Trust (FXY) September, 2012 $121 Puts to $5.50, up 72%. If the yen breaks ¥85 and the (FXY) pierces $117, then expect much more.

Those unable to play in the options market can buy the short yen ETF (YCS) to get a 200% short exposure.

Japan’s Deflation Continues Unabated