• Member Login
Mad Hedge Fund Trader
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Ussupport@madhedgefundtrader.com
  • Search
  • Menu

Why I?m Doubling My Yen Short

Newsletter

The summer us coming to a close this weekend, and the longer term, fundamentally driven trends that have been sunning themselves at the beach are about to reassert themselves. The sideways churning moves on low volume that started as early as March are about to come to an end. Therefore, it is time to bulk up my portfolio.

So I am taking this opportunity to double up my short position in the Japanese yen, the currency that everyone loves to hate. My existing (FXY) September, 2013 $103-$106 bear put spread is now well in the money and expires in 15 trading days. Today?s alert doubles my exposure and takes in additional premium by going one month further out to October.

I have written endlessly on the fundamental case for a weak yen for the past two years (for a link why you should sell short the yen, please click on any of the following: ?http://madhedgefundradio.com/rumblings-in-tokyo-2/, http://madhedgefundradio.com/new-boj-governor-craters-yen/,? http://madhedgefundradio.com/new-boj-governor-crushes-the-yen/).

From a technical point of view, what is unfolding here is classic chart reading 101. When you get a huge move over a short period of time, such as the 25% collapse in the yen that started in November, the consolidation and digestion period that follows can be very long. In March, I was warning it could be as long as six months, and that is exactly what we got. My friend, Mad Day Trader, Jim Parker, agrees with me. Whenever that happens, you always want to run a double position.

Japanese portfolio managers and corporations have now had half a year to realize their windfall profits on their foreign investments in dollar denominated assets. That was generating hundreds of billions of dollars of dollar selling and yen buying that was supporting the beleaguered Japanese currency, no matter how lousy the fundamentals.

That support is about to end. Whoever has not sold their yen by now is in for the duration, or at least until the next 10% drop, which may be upon us. A breakdown to new lows could take us as far as ?110 in the cash market, or $88 in the (FXY).

For those who can?t play the options markets, better to just buy outright the ETF (YCS).

In the end, this is a bet that Japan will continue to expand its monetary base at a breakneck rate. My friend, Bank of Japan governor, Haruhiko Kuroda, has nailed to the mast his intention to double his country?s money supply in two years. Now that Japan?s economy is growing at a 3.5% rate, the fastest in the industrialized world, this radical, last-ditch monetary policy has the merit in that it is working.

Therefore, it will continue, if not accelerate. In my book, it means it is time to double up.

FXY 8-29-13

YCS 8-29-13

Japanese Girl Time to Double Up

August 30, 2013/by Mad Hedge Fund Trader
Tags: (FYX), (YCS)
Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share by Mail
https://www.madhedgefundtrader.com/wp-content/uploads/2013/03/Japanese-Girl-e1414074431163.jpg 280 400 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-08-30 09:31:382013-08-30 09:31:38Why I?m Doubling My Yen Short
You might also like
That Other ?Great Reallocation? Out of the Yen
Look at That Yen!
Rumblings in Tokyo
Why the JGB Market May Be Ready to Collapse
New BOJ Governor Crushes the Yen
Is This the Chink in Japan?s Armor?

Archives

  • 2021 (590)
    • April (110)
    • March (177)
    • February (147)
    • January (156)
  • 2020 (2028)
    • December (169)
    • November (184)
    • October (168)
    • September (176)
    • August (167)
    • July (165)
    • June (178)
    • May (178)
    • April (190)
    • March (177)
    • February (144)
    • January (131)
  • 2019 (1770)
    • December (132)
    • November (128)
    • October (168)
    • September (128)
    • August (173)
    • July (138)
    • June (113)
    • May (158)
    • April (168)
    • March (169)
    • February (141)
    • January (153)
  • 2018 (1798)
    • December (150)
    • November (157)
    • October (194)
    • September (131)
    • August (150)
    • July (133)
    • June (128)
    • May (162)
    • April (185)
    • March (155)
    • February (153)
    • January (100)
  • 2017 (520)
    • December (96)
    • November (114)
    • October (52)
    • September (47)
    • August (63)
    • July (38)
    • June (52)
    • May (58)
  • 2016 (1369)
    • December (116)
    • November (107)
    • October (133)
    • September (110)
    • August (125)
    • July (98)
    • June (111)
    • May (142)
    • April (119)
    • March (112)
    • February (91)
    • January (105)
  • 2015 (1290)
    • December (98)
    • November (94)
    • October (89)
    • September (106)
    • August (105)
    • July (87)
    • June (72)
    • May (101)
    • April (134)
    • March (145)
    • February (122)
    • January (137)
  • 2014 (1490)
    • December (112)
    • November (107)
    • October (151)
    • September (120)
    • August (110)
    • July (123)
    • June (109)
    • May (117)
    • April (129)
    • March (153)
    • February (130)
    • January (129)
  • 2013 (1601)
    • December (125)
    • November (176)
    • October (172)
    • September (162)
    • August (131)
    • July (140)
    • June (114)
    • May (123)
    • April (146)
    • March (123)
    • February (87)
    • January (102)
  • 2012 (781)
    • December (23)
    • November (18)
    • October (24)
    • September (78)
    • August (90)
    • July (67)
    • June (68)
    • May (97)
    • April (88)
    • March (86)
    • February (77)
    • January (65)
  • 2011 (449)
    • December (59)
    • November (73)
    • October (23)
    • September (31)
    • August (44)
    • July (34)
    • June (14)
    • May (43)
    • April (20)
    • March (42)
    • February (29)
    • January (37)
  • 2010 (356)
    • December (32)
    • November (45)
    • October (45)
    • September (51)
    • August (58)
    • July (43)
    • May (6)
    • April (1)
    • March (35)
    • February (17)
    • January (23)
  • 2009 (252)
    • December (20)
    • November (18)
    • October (22)
    • September (20)
    • August (15)
    • July (19)
    • June (20)
    • May (20)
    • April (19)
    • March (22)
    • February (19)
    • January (38)
  • 2008 (420)
    • December (38)
    • November (36)
    • October (46)
    • September (40)
    • August (34)
    • July (38)
    • June (36)
    • May (42)
    • April (42)
    • March (28)
    • February (40)

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

Copyright © 2021. Mad Hedge Fund Trader. All Rights Reserved. support@madhedgefundtrader.com
  • Privacy Policy
  • Disclaimer
  • FAQ
Get Ready for the Next Golden Age August 30, 2013
Scroll to top

This site uses cookies. By continuing to browse the site, you are agreeing to our use of cookies.

OKLearn more

Cookie and Privacy Settings



How we use cookies

We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.

Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.

Essential Website Cookies

These cookies are strictly necessary to provide you with services available through our website and to use some of its features.

Because these cookies are strictly necessary to deliver the website, refuseing them will have impact how our site functions. You always can block or delete cookies by changing your browser settings and force blocking all cookies on this website. But this will always prompt you to accept/refuse cookies when revisiting our site.

We fully respect if you want to refuse cookies but to avoid asking you again and again kindly allow us to store a cookie for that. You are free to opt out any time or opt in for other cookies to get a better experience. If you refuse cookies we will remove all set cookies in our domain.

We provide you with a list of stored cookies on your computer in our domain so you can check what we stored. Due to security reasons we are not able to show or modify cookies from other domains. You can check these in your browser security settings.

Google Analytics Cookies

These cookies collect information that is used either in aggregate form to help us understand how our website is being used or how effective our marketing campaigns are, or to help us customize our website and application for you in order to enhance your experience.

If you do not want that we track your visist to our site you can disable tracking in your browser here:

Other external services

We also use different external services like Google Webfonts, Google Maps, and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.

Google Webfont Settings:

Google Map Settings:

Google reCaptcha Settings:

Vimeo and Youtube video embeds:

Accept settingsHide notification only