Asses getting handed daily to traders.

Hi all -

It's been a while, and I can tell you from what I am hearing....it's been a rough month for a lot of you out there.

I recently was thinking of my returns this month, and how abysmal they have been. ONE PERCENT SO FAR. That's a lot of stress for so little. But then, as I was reading emails, I realized that most people are losing heavily this month. (Or so it seems.)

I believe we are definitely at a crossroads in the Forex right now. USD/JPY, as well as the other carry trade pairs are putting up that one last fight. The next few weeks could be really tough, as a lot of traders don't want to give up on that swap rate. However, I believe the writing is on the wall.

USD/JPY will be at 106, and sooner than most people think. But, this is not to say that it's going to be next Tuesday. It is going to fight like hell in the mean time. All I can really say at this moment is that you don't want to arbitrarily short the pair. Look for a nice bounce, and reversal candle. I would move out to the daily charts for this, as I think we will have a lot of noise in the mean time.

One strategy: Just stay the hell away from it for now.

There is no point in getting whipped to death in this pair. However, I will say that 109 or better yet.....110 (if we get that lucky again.) are shorts. Just be prepared to hang on to this trade for a while.

The other carry trades, and specifically Yen pairs, are going the same way. (Oh yeah......you DID know that there are other carry trade pairs out there, right? It's not all Japan. Take a look at the Franc, or Swedish Krone.)

Anyways, keep you head down, and your powder dry on these stupid things if you are not in them already. Trust me, the obvious sign will come.

I see support at 108, the bottom of a trend line on the monthly. If that's broken, look for possible BoJ intervention around 105-105.50. (As they did last time it was down here......Sony DOES NOT WANT this to go down too much farther.)

Perhaps when the BoJ makes it's presence known, I might even go long term buy on this. We will see. (As for the Bank Of Japan intervening, it's already been mentioned in passing by a governor. However, as long as it is orderly, they will leave well enough alone.) This will be interesting, and the bane of existence for a lot of traders.

Which is exactly why I am happy with my paltry 1%.