Traders,

Please review the document in the free members area titled "UBS Perspectives - Risk Aversion Still Key"

This document will provide you with an excellent insiders analysis of what is driving the foreign exchange market, at present. The importance of studying the review is to expand your knowledge of this market and enhance your ability to pick up on specific market drivers and identifying important factors influencing price, trends and volatility.

Ref: UBS

Good Luck with your trading and be careful out there!

Chris Lori
CTA
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Tags: Risk

The fear of recession took control of the US equity markets, overshadowing China's stimulus package and the increased AIG bailout package. Dow finished Monday at 8870.54, down 0.82%. S&P closed at 919.21, down 1.27%. The financial led the bourses lower as market expects a Q4 loss from US bank. Meanwhile, General Motors share came under significant selling pressure as one of the analyst reports expects its stock price to fell to 0. Meanwhile, Asian markets are lower at time of writing, evidenced by the JPY rally. Read More...

Tags: Risk

The dollar was undermined on Friday by falling risk aversion, with the S&P500 rising by 2.9%. In this context, EURUSD has risen to a high of 1.2833 in the US session from a low of 1.2718 and has subsequently traded even higher this morning to current levels around1.2850. Meanwhile, credit markets look to be normalising further - the 3-month spread between OIS and Libor for the US dollar fell to 1.76%, from 1.83% on Thursday. Read More...

Tags: Financial Crisis

Risk appetite deteriorated again overnight despite aggressive rate cuts by a number of central banks, including the BoE, the EBC and the SNB. US stocks however traded lower, with the S&P500 down by 5%, and Asian stock markets this morning are also heading lower with Australia's S&P/ASX200 down by 4.3% so far at the time of writing. Falling yield differentials globally and deteriorating risk appetite pushed EURUSD, EURJPY and USDJPY lower. Think about, if rate spreads are contracting against EUR and JPY is maintaining a sustained rally on any hint of risk aversion and falling equity markets globally (-2 to -5% is common lately), than a short EURJPY is a well defined fundamental trend. I see further downside for this pair... Don't chase it. In fact, a deeper than expected US NFP or Retail Sales next week can offer a rally in which to sell. The challenge is the volatility on the pair make stop placement a challenge. To mitigate risk, take unleveraged position sizes like the smart professionals, not the dumb ones. Read More...

Tags: BOE

While central banks are expected to cut rates, there is little to suggest that cuts will be able to moderate the pace of global economic deterioration. That said, the Fed cut rates 50bp as expected today. The language in the accompanying statement was as expected, emphasizing downside risks to growth and citing moderating inflation. But importantly, there was nothing to discourage thoughts that the Fed could cut again, as they did not view 1% as a "lower bound". There are forcasts for further cuts down to 0.5% by the January 2009 meeting. The Fed also announced additional swap lines of $120bn, this time with four large emerging markets, bringing the number of swap lines set up in the last year to fourteen. Macro data continued to be weak, despite durable goods orders for September rising 0.8% (cons -1.1%). The August reading was revised down and the last two months together show a weak trend. The upcoming GDP release should show that the US economy contracted in Q3.
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Tags: Rate Cuts

Hello Pro Traders Club Member

AUD/JPY moves 800 pips from trade call level.

As you recall, i suggested a long trade on AUD/JPY or short JPY on other crosses. Due to the intense nature of the markets recently, i regret that i did not have time to produce a PTC video to explain the trade and its parameters. Any time a trade suggestion is made, in any capacity, there will be blind aspects of the trade to everyone with the exception of the individual who has called the trade, because we all view the market and price action differently.
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Tags: AUD, JPY

The Dow closed 203.19 points lower at 8,175.77. The S&P 500 fell 27.85 points to 848.92. Equities had spent much of the day in positive territory but plunged in the last half hour, dragged down by energy shares as oil gave up its gains. Oil closed at $63.22/barrel, down 1.45%, having risen as high as $65.77 intraday.
US September new home sales +2.7% m/m, after a 12.6% decline in August (preliminary August -11.5%).
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Tags: Financial Crisis

Hello Traders,

Start Selling JPY, particularly against high yeilders - Long > AUDJPY

We can start to build some traunches on long AUDJPY starting here at 56.12 and lower only, currently it is NYSE market open, as I write this. Place 0.25:1 gearing on your traunches to 1:1 max (four traunches) risking max 2% of equity on total traunches. Take profit on each traunch separately as price moves above using discretion and price. Today should spike down and we should see an equities rally in the next 5 trading days. Look for carry this position for several weeks to a few months. I will update in Pro Traders Club.

Good Luck with your trading and be careful out there.

Chris

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Tags: JPY

Hello Traders

Here is a Bloomberg recorded presentation made by Nouriel Roubini, Professor of Economics and International Business at athe Stern School of Business, New Yourk University. Read More...

Tags: Videos

Hello Traders,

Attached is an informative message for developing traders from a student and friend whom i've mentored the past few years.

Daniel's message shares the importance of submitting to the market (a section found in "Face the Trader Within", by Chris Lori) and withdrawing the force of your own opinions from your trading actions. It discusses the importance in believing in oneself and understanding the market to become successful.

I'm very proud of Daniel and all he's accomplished in this business and how much he has contributed to developing traders. This is why i do it.

Enjoy the article!
Chris Lori
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