Currency Market Turmoil
March 7, 2007 by Trader Rich
This certainly has been an interesting two weeks, one in which I've never quite experienced. I can say that I'm way too inexperienced to fully understand everything that's going on. I've been focused exclusively on technical analysis over the last year whereas before I at least tried to follow the fundamentals aspect of the currency market. I was reading an article today about how Goldman Sachs is warning of "dead bodies" after the turmoil. http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/03/06/cngold06.xml
Like I said, I don't fully comprehend everything that's going on but from everything I read, the carry trade liquidation is the culprit as most of you are probably aware of.
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Econ 101 day one: There’s no such thing as a free lunch. The YEN carry trade was more like Homer running up a tab at Moe\’s. Time to pay the Tab. DOH!
Great way to look at it…. Thanks.
My opinion FWIW: Trading news is not Fundemental analysis. Fundemental analysis is based on Macro factors and priced into the market far in advance and is only useful when trying to asses the long term strength of all factors of the economy. The fundementals of an economy just aren’t changing from news report to news report that’s why you just can’t predict price movement by predicting what that news report will say.
TA is trying to descern how the heck the price is going where it’s going (where ever that is). I think it has absolutely nothing to do with fundementals.
The Yen carry hasn’t yet been compromized?! This is merely a correction & those flailing around are latecomers to the market, getting pressured to liquidate. They’re handing their tails to the bedded-in Yen shorts already step positioned from farther back.
111.50 to 113.80 will need to get hot before any of the ‘real’ money becomes stirred.