Thought I'd try and get some NON TA discussion going. What d'ya reckon?
Long AUD vs JPY
1) Breakdown in Correlations
90d and 30d Correlations between AUD/JPY and the $SPX are now below their pre "cheap money buy anything" levels that we saw this time last year, indicating a move away from the risk on / risk off market that dominated most of 2009.
{red line = AUDJPY, green line = SPX]
2) Non Commercial positioning at 2008 highs
Last time Non commercials were this long, the SPX was closing at pre-lehman levels (still another 100pts higher than where we are now), and AUD/JPY was up at over 100.
3) Positive carry and getting better
3m IBOR's currently leave a long AUD/JPY position with 3.9119% positive carry - and it's getting better.
{red line = AUDJPY, Blue area graph = 3m AUD IBOR - 3m JPY IBOR}
Plenty of fundamental reasons why you would want to be short JPY (and similarly long AUD), but none of them are my own so I've left them out.
Long AUD vs JPY
1) Breakdown in Correlations
90d and 30d Correlations between AUD/JPY and the $SPX are now below their pre "cheap money buy anything" levels that we saw this time last year, indicating a move away from the risk on / risk off market that dominated most of 2009.
{red line = AUDJPY, green line = SPX]
2) Non Commercial positioning at 2008 highs
Last time Non commercials were this long, the SPX was closing at pre-lehman levels (still another 100pts higher than where we are now), and AUD/JPY was up at over 100.
3) Positive carry and getting better
3m IBOR's currently leave a long AUD/JPY position with 3.9119% positive carry - and it's getting better.
{red line = AUDJPY, Blue area graph = 3m AUD IBOR - 3m JPY IBOR}
Plenty of fundamental reasons why you would want to be short JPY (and similarly long AUD), but none of them are my own so I've left them out.