This chart is to show how carry trade strategy is being hurt badly this year. Price of PowerShares DB G10 Currency Harvest (DBV) has lost, roughly, around -25% (from 27-ish to 20-ish) This is likely going to be a shitty year for carry traders.
Here is the….CHART!
[photopress:DBV_carry_Trade.jpg,full,1]
by Gav 15 Comments
[photopress:aussie_monthly.gif,full,1]
We know Australian dollar is losing its ground recently. It is, in fact, the worst-performed currency in Asia Pacific for year 2008. (It reminds me, it used to be the top performer not long ago 😆 )
I had a look at monthly chart to have a view and feel how bad is the situation right now. Basically, market is wiping out all the gains since Howard government, and the years-long economy honey moon since, approximately, year 2001.
If the currency reflects the economy condition of a country, here is a “chart view” of Aussie economy.
The poor (unlucky ?) Labor party, Mr. Kevin Rudd takes over Australia at the “right time”. Soon after Labour party in charge, we have economy slow down, then collapse of Australia dollar to 5-year low. In short, he takes over Australia at the TOP, well, short term TOP and historical resistance zone. (John Howard took over at the bottom, and support zone though). This cycle should be very close to commodity cycle.
So now, the interesting part is, are we heading back to the previous bottom? or are we able to bounce from this “retracement”? I feel, this will also indicate the duration of Labor party staying in power…
Just my random rant.
OH Crap. AUDUSD falls below 0.75 for the first time in 2 years. Stock market took a tumble. All ordinaries lost around -3.3% today. What’s going on? On the paper, the reason, as expected, “people are expecting a 50bp rate cut tomorrow”. Well, probably. Anyway, it is indeed a bad day.
Here are some random thoughts..
It is a mess in the Aussie markets. Well, at least , in my point of view. People are panic, they are guessing, or even expecting Australia to be hit by the same shitty condition like America. Government is putting a rescue package in front. The past glorious years have made a lot of Aussie allocating a big portion of their wealth heavily in stocks market. Not to mentioned the crappy Superannuation. Experts on the TV are still advising the dads & mums investor to hold on their positions.
Anyway, I can’t see it clearly now. I don’t have a clear plan to work in this market condition. Uhm..so I guess, I will be better off staying aside. Am I too slow or not ‘intelligent’ enough to profit from this market condition? uhm…probably.
But, it is good to be safe, and holding cash at the moment…I guess.
by Gav 3 Comments
So, the House decided not to save the rich-men World. Dow index collapsed 777 points. Gold rallies now. But, where is Aussie dollar going? Decoupling from Gold movement? Australia is one of the largest gold exporters. Of course, this doesn’t guarantee the prosperity of australian dollar.
But, what exactly is the problem of Australia economy? OK,It stalls now. Well, some banks have some shitty involvements in America. Economic figures are not signaling disaster at the moment. There might be some shitty underneath, but, at the moment, I see this as panic selling. And I for one, do not believe in USD rally.
Technically, we are still sitting on the weekly support line. With support of the Gold. I am putting a small long position of Aussie dollar now. As usual I can be very very wrong, but I want the market to prove me wrong.
I don’t have any chart to post now. Nothing interesting. For the past weeks, or months, I have been watching NQ and YM futures with some tradings in paper mode whenever I am available or awake. It is really tricky to start your trading day around 1130pm-ish. And the cold weather in Melbourne (it is early Spring in Australia now) is not helpful at all…
Whatever….. I am still not going live for futures trading at the moment. Not at this busy moment of my life. Paper trading still goes on. Currency trading will still be the main focus.
It has been a painful journey for Aussie bulls. Weaker commodities, strong dollar ..whatever, you’ve read it on the papers. I have been following it all this time. Here are some observations. Is Dollar hitting resistance now? Are Aussie and Gold reaching support now? uhm… What do ya think?
Here are the ….CHARTS!
Dollar Index
[photopress:DXweekly.jpg,full,1]
Gold
[photopress:Goldspotweekly.jpg,full,1]
AUDUSD
[photopress:AUDUSDweekly.jpg,full,1]
Charts and data provided by Market Club
