Cancelled pending orders.

Whoo! Some stunning moves today! And equities are getting clobbered... again! There's an interesting cross-current developing. The much maligned Greenback has been doing stunningly well against the EUR and the GBP, but it's at a 20-day low against the JPY. Now, we all know that the JPY is an even bigger joke than the USD, and that it tends to be inversely correlated with US equities. This is due to the fact that since Yen are so cheap to borrow, big institutions do so and put the proceeds into equities in search of higher yields. They also put those borrowed Yen into higher yielding currencies. When those trades go badly, the marginal players start selling equities and currencies to buy Yen and pay back the loans. Hence, equities down, Yen up.
Earlier in the year, we had the USD getting slaughtered against everything, including JPY. Now the Dollar is strong against everything but the Yen. This suggests that the EU and British economies will be in even worse shape than the US, which itself won't be winning any beauty contests. If this situation persists, there are going to be some more great shorting opportunities in the JPY crosses. The GBP/JPY cross is already at a 3-year low- down about 500 pips for the week. We may even have a 'breakaway gap' on the monthly chart of that pair sitting between last week's close and this week's open. Last time that happened it was early 1993, and the pair finally bottomed in mid 1995 about 5,000 pips lower. The biggest problem with this pair right now is that you can't get paid to short it. GBP still pays a much higher yield, but clearly the markets are signaling that the rate differential is likely to shrink because the Brits will have to lower rates in the face of a recession. With Japan being a perennial basket case as far as rates go, can this pair ever have positive-carry on the short side? Markets do have a funny way of doing the seemingly impossible, so who knows? I know I wouldn't stake my whole account for or against it... that's for sure.

Current closed equity: $88.65
Current position: flat
Current exposure: 0