2011-04-03rd (Sun)

Just came back from a real estate investment club meeting.

Currently I have the following positions;
Long 50 contracts Copper May 2011 with ACB of 437.88
Short 100000 USDJPY with ACB of 82.458
Short 1300 contracts Nikkei 225 with ACB of 9557.38

Copper May 2011 is currently at 426.05 (2011-04-03, 18:23 pm EST)
USDJPY is currently at 84.33 (2011-04-03, 18:24 pm EST)
Nikkei 225 closed the week at 9807.06 (2011-04-03, 18:24 pm EST)

For USDJPY last Friday 04/01st, the 200-Day MA was crossed at 83.60 and I did not Stop Loss my position because Daily MACD, RSI, Stochastic were all near the peaks.  I know all three indicators can continue to peak and even a turn does not mean USDJPY will fall but instead can continue climbing as other desks pile on the Long Trade.  This is really not the time to be Short USDJPY and I am fighting my own feelings to cut the trade loose at a loss.  P/L Statements do not lie and I am a complete fool on this Trade.

Japan needs to borrow $300Billion for their reconstruction and the Ministry of Finance and the BOJ have absolutely no choice but to continue with aggressively easier monetary policies to stimulate the Japanese economy by selling bonds into the market with BOJ as buyer of last resort.  When I entered my Long USDJPY trade there was talk of massive repatriation of the Yen which theoretically should strenghten it, but instead we have seen the Yen weaken.  Apparently the amount of repatriated Yen is not enough to strengthen the currency.  So the case is strong that the Yen will continue to weaken indefinitely, and as the USD temporarily strenghten, the combined effect is for USDJPY to rise and hence I will continue to loose money on my Short USDJPY trade.

So why have a still not cut my losses?  Stupidity, and relying entirely on technicals which in a room full of CMTs almost all would be Long this pair at this point because of the 200-Day MA break.  Currently USDJPY is falling intra-day back to 84.20 (2011-04-03, 18:56 pm EST) and I need to see if it bounces off 83.60 or crosses down below.  My saving grace will be the weakening of the USD but there is weak evidence of that happening in the near future.

So why have I still not cut my losses?  The best answer I can give is because I still have the margin the ride it out, technicals, and USD to weaken.  Very weak Thesis given today's knowledge and evidence.

China's Minmetals revealed a $6.5 Billion bid for Canadian copper miner Equinox

Stay Tuned.

Jeff
(2011-04-03, 19:03 pm EST)